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The Vermont Statutes Online
Title
08
:
Banking and Insurance
Chapter
101
:
INSURANCE COMPANIES GENERALLY
Subchapter
004
:
INVESTMENTS AND LOANS
§
3461b. General limitations and diversification requirements for life and health
insurers
(a) General
three percent diversification.
(1) Except as
otherwise specified in this subchapter, a domestic life and health 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 three percent of its admitted
assets in investments of all kinds issued, assumed, accepted, insured or
guaranteed by a single person.
(2) This three
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.
(3) Asset-backed
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 three 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.
(c) Canadian
investments.
(1) An insurer
subject to this section shall not acquire, directly or indirectly through an
investment subsidiary, a Canadian investment 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 title 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 greater of:
(A) The amount
the insurer is required by Canadian law to invest in Canada or to be
denominated in Canadian currency; or
(B) 115 percent
of the amount of its reserves and other obligations under contracts on lives or
risks resident or located in Canada. (Added 1999, No. 84 (Adj. Sess.), § 3,
eff. April 19, 2000.)