40-2a28. Investment in asset-backed securities; conditions; definitions. - Kansas Statutes

40-2a28

Chapter 40.--INSURANCE Article 2a.--INVESTMENTS BY OTHER THAN LIFE INSURANCE COMPANIES

      40-2a28.   Investment in asset-backed securities; conditions; definitions.(a) Any insurance company other than life organized under any lawof this state may invest, by loans or otherwise, with the direction or approvalof a majority of its board of directors or authorized committee thereof, any ofits funds, or any part thereof, in asset-backed securities, subject to thefollowing:

      (1)   To be an admitted asset under this section, an asset-backed securitymust, at the time of acquisition, be designated "1" or "2" by the nationalassociation of insurance commissioners in its most recently publishedvaluations of securities manual or supplement thereto;

      (2)   the investment in any one issue of asset-backed securities shall notexceed 2% of the admitted assets of the investing insurance company as shown byits last annual report or a more recent quarterly financial statement filedwith the commissioner. Each issue designated as provided in paragraph (1)shall constitute a single issue regardless of any other obligations orsecurities issued by the same or any affiliated issuer; and

      (3)   the investing company's aggregate investment in asset-backedsecurities as provided in this section shall not exceed 20% of the admittedassets of such company, as shown by such company's last annual report as filedwith the commissioner of insurance or a more recent quarterly financialstatement as filed with the commissioner, on a form prescribed by the nationalassociation of insurance commissioners, within 45 days following the end of thecalendar quarter to which the interim statement pertains.

      (b)   As used in this section:

      (1)   "Asset-backed security" means any security or other instrumentrepresenting or evidencing an interest in, a loan to, a participation in a loanto, or any other right to receive payments from a business entity of any typeor form, which has as its primary business activity the acquisition and holdingof financial assets, directly or through a trustee, for the benefit of suchbusiness entity's debt or equity holders;

      (2)   "financial asset" means a single asset or a pool of assets consisting ofinterest-bearing obligations or other contractual obligations representing orconstituting the right to receive payment from the asset or pool of assets.

      History:   L. 1995, ch. 23, § 2; July 1.