40-2b29. Investment in asset-backed securities; conditions; definitions. - Kansas Statutes

40-2b29

Chapter 40.--INSURANCE Article 2b.--INVESTMENTS BY LIFE INSURANCE COMPANIES

      40-2b29.   Investment in asset-backed securities; conditions; definitions.(a) Any life insurance company organized under any law of thisstate may invest, by loans or otherwise, with the direction or approval of amajority of its board of directors or authorized committee thereof, any of itsfunds, 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 ofacquisition, be designated "1" or "2" by the national association of insurancecommissioners in its most recently published valuations of securities manual orsupplement thereto; and

      (2)   the investment in any one issue of asset-backed securities shall notexceed 2% of the admitted assets of the life insurance company as shown by itslast annual report or a more recent quarterly financial statement filed withthe 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 life insurance 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 assetsconsisting of interest-bearing obligations or other contractual obligationsrepresenting or constituting the right to receive payment from the asset orpool of assets.

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