The Vermont Statutes Online
Banking and Insurance
INSURANCE COMPANIES GENERALLY
INVESTMENTS AND LOANS
3461a. General limitations and diversification requirements for property and
casualty, financial guaranty and mortgage guaranty
(a) General five
(1) Except as
otherwise specified in this subchapter, a domestic property and casualty,
financial guaranty or mortgage guaranty insurer shall not acquire directly or
indirectly through an investment subsidiary an investment under this subchapter
if, as a result of and after giving effect to the investment, the insurer would
hold more than five percent of its admitted assets in investments of all kinds
issued, assumed, accepted, insured or guaranteed by a single person.
(2) This five
percent limitation shall not apply to the aggregate amounts insured by a single
financial guaranty insurer with the highest generic rating issued by a
nationally-recognized statistical rating organization.
securities shall not be subject to the limitations of subdivision (1) of this
subsection; however, an insurer shall not acquire an asset-backed security if,
as a result of and after giving effect to the investment, the aggregate amount
of asset-backed securities secured by or evidencing an interest in a single
asset or single pool of assets held by a trust or other business entity then
held by the insurer would exceed five percent of its admitted assets.
(b) An insurer
subject to this section shall comply with applicable regulations addressing
investments in lower and medium grade obligations.
(1) An insurer subject
to this section shall not acquire, directly or indirectly through an investment
subsidiary, any Canadian investments authorized by this subchapter, if, as a
result of and after giving effect to the investment, the aggregate amount of
these investments then held by the insurer would exceed 40 percent of its
admitted assets or if the aggregate amount of Canadian investments not acquired
under subdivision 3461c(2) of this subchapter then held by the insurer would
exceed 25 percent of its admitted assets.
(2) However, as
to an insurer that is authorized to do business in Canada or that has
outstanding insurance, annuity or reinsurance contracts on lives or risks
resident or located in Canada and denominated in Canadian currency, the
limitations of subdivision (1) of this subsection shall be increased by the
(A) The amount
the insurer is required by Canadian law to invest in Canada or to be
denominated in Canadian currency; or
(B) 125 percent
of the amount of its reserves and other obligations under contracts on risks
resident or located in Canada. (Added 1999, No. 84 (Adj. Sess.), § 2, eff.
April 19, 2000.)