Sec. 10.13.290. - Business practice standards and reserves. - Alaska Statutes

(a) A licensee shall transact its business in a safe and sound manner and shall maintain itself in a safe and sound condition.

(b) In determining whether a licensee is transacting business in a safe and sound manner, the department may not consider the risk of providing financing assistance to a business, unless the department determines that the risk is great enough to demonstrate gross mismanagement when compared with the return that can be realistically expected.

(c) Notwithstanding the other provisions of this section, the department may

(1) if the amount of the financing assistance is unduly large in relation to the total assets or the total shareholder equity of the licensee, determine that a licensee's financing assistance to a single business or group of affiliated businesses violates (a) of this section or constitutes an unsafe or unsound act;

(2) require that a licensee maintain a reserve in the amount of anticipated losses;

(3) require that a licensee have in effect a written financing assistance policy approved by the licensee's board of directors, including credit evaluation and other matters; the department may not require that a licensee adopt a financing assistance policy that contains standards that prevent the licensee from exercising needed flexibility in evaluating and structuring financing assistance to businesses on an individual basis.