§ 27-41-12 - Investments. - Rhode Island Statutes

SECTION 27-41-12

   § 27-41-12  Investments. – With the exception of investments made in accordance with § 27-41-5(a)(1)and (a)(2) and § 27-41-5(b), the investable funds of a health maintenanceorganization may be invested in the following investments and any otherinvestments that the director authorizes by regulation:

   (1) Governmental securities. Obligations of the UnitedStates. In bonds, notes, certificates, bills, or other obligations, or any partof the obligation, issued, assumed, insured, or guaranteed in whole or in partby the United States;

   (ii) Obligations of agencies and instrumentalities of theUnited States. In bonds, notes, certificates, bills, or other obligations, orany part of the obligations, issued, assumed, insured, or guaranteed in wholeor in part, directly or indirectly, by any agency or instrumentality of theUnited States, now or after this established, expressly including in thissection, without limiting the generality of the foregoing, the following:

   (I) Federal national mortgage association;

   (II) Public housing association;

   (III) Federal land banks;

   (IV) Federal home loan banks;

   (V) Federal intermediate credit banks; and

   (VI) Banks for cooperatives;

   (B) As used in this subsection, the phrase "any agency orinstrumentality of the United States" shall include any persons, agents,agencies, subagents or subagencies, divisions, banks, corporations,commissioners, commissions, administrators, administrations, bureaus, boards,or other instrumentalities established by, or under the authority of, thePresident or the Congress of the United States or any agency or instrumentalityof the President or the Congress, or to whom the authority to issue, insure, orguarantee stocks, bonds, securities, or other obligations has been delegated bythe United States or any agency or instrumentality of the United States;

   (2) State and municipal securities. The followingsecurities are permitted investments for a health maintenance organizationprovided that: (A) These securities on the date of purchase are eligible foramortization in accordance with rules and guidelines of the securitiesvaluation office of the National Association of Insurance Commissioners; (B)These securities, on the date of purchase, have a rating of at least an A asestablished by Moody's Investors Service, Inc. In the event that the Moody'sbond ratings are no longer published by Moody's Investors Service, Inc., or inthe event that the director determines that the Moody's bond ratings aspublished by Moody's Investors Service, Inc., are no longer appropriate for thedetermination of state and municipal bond investments, then an alternativemethod for the determination of permissible state and municipal bondinvestments, which is adopted by regulation promulgated by the director, may beestablished:

   (i) Obligations of the state of Rhode Island. In bonds,notes, certificates, or other obligations issued, assumed, insured, orguaranteed, as to payment of principal and interest, in whole by the state ofRhode Island;

   (ii) Obligations of other states and territories. In bonds,notes, certificates, or other obligations issued, assumed, insured, orguaranteed, as to payment of principal and interest in whole by any other stateor territory of the United States, including the territory designated as thecommonwealth of Puerto Rico;

   (iii) Obligations of political subdivisions of the state ofRhode Island. In bonds, notes, certificates, or other obligations issued,assumed or guaranteed, as to payment of principal and interest by any county,city, town, incorporated village, district, department, agency, commission,authority, or other political subdivision of the state of Rhode Island; and

   (iv) Obligations of political subdivisions of other states.In bonds, notes, certificates, or other obligations issued, assumed, orguaranteed, as to payment of principal and interest by any county, city, town,incorporated village, district, department, agency, commission, authority, orother political subdivision of any other state of the United States;

   (3) Deposits in banks and trust companies. Thosedeposits must be in insured financial institutions that are members of thefederal reserve system or eligible to act as reserve agents as defined in§ 19-3-12;

   (4) Commercial paper. In commercial paper purchased inthe open market maturing in twelve (12) months or less of an individual, firm,or corporation whose business is principally in the United States, provided:

   (i) That the paper carries one of the top three (3) ratingsof a recognized credit agency satisfactory to the director of businessregulation;

   (ii) That the paper ninety (90) days prior to maturity wouldqualify as eligible for rediscount with a federal reserve bank; and

   (iii) That a recent statement of assets, liabilities, andoperations duly certified by a certified public accountant showing asatisfactory credit position is on file with the health maintenanceorganization; and

   (5) Other bonds. Bonds, except those of a parent,provided that:

   (i) Those bonds on the date of purchase are eligible foramortization in accordance with rules and guidelines of the securitiesvaluation office of the National Association of Insurance Commissioners; and

   (ii) Those bonds on the date of purchase have a rating of atleast an A, as established by Moody's Investors Service, Inc.