40-2b04. Investments in foreign jurisdictions and currencies; definitions.
40-2b04
40-2b04. Investments in foreign jurisdictions and currencies;definitions.(a) As used in this section:
(1) "Business entity" means a sole proprietorship, corporation, limitedliability company, association, partnership, joint-stock company, jointventure, mutual fund, trust, joint tenancy or other similar form of businessorganization, whether organized for-profit or not-for-profit.
(2) "Domestic jurisdiction" means the United States, Canada, and a state orpolitical subdivision of the United States or Canada.
(3) "Foreign currency" means a currency other than that of the United Statesor Canada.
(4) "Foreign investment" means an investment in a foreign jurisdiction orin an asset domiciled in a foreign jurisdiction. An investment shall not bedeemed to be foreign if the issuing business entity, qualified primary creditsource or qualified guarantor is a domestic jurisdiction or a business entitydomiciled in a domestic jurisdiction, unless:
(A) The issuing business entity is a shell business entity; and
(B) the investment is not assumed, accepted, guaranteed or insured orotherwise backed by a domestic jurisdiction or a business entity, that is not ashell business entity, domiciled in a domestic jurisdiction.
(5) "Foreign jurisdiction" means a jurisdiction outside of the United Statesor Canada.
(6) "Qualified guarantor" means a guarantor against which an insurer has adirect claim for full and timely payment evidenced by a contractual right forwhich an enforcement action can be brought in a domestic jurisdiction.
(7) "Qualified primary credit source" means the credit source to which aninsurerlooks for payment as to an investment and against which an insurer has a directclaim for full and timely payment evidenced by a contractual right for which anenforcement action can be brought in a domestic jurisdiction.
(8) "Shell business entity" means a business entity having no economicsubstance except as a vehicle for owning interests in assets issued, owned orpreviously owned by a business entity domiciled in a foreign jurisdiction.
(9) "SVO" means the securities valuation office of the National Associationof Insurance Commissioners or any successor office established by the NationalAssociation of Insurance Commissioners.
(b) Any life insurance company organized under any law of this state mayinvest, by loans or otherwise, with the direction or approval of a majority ofits board of directors or authorized committee thereof, any of its funds, orany part thereof, inforeign investments of the same types as those that an insurer ispermitted to acquire under K.S.A. 40-2b01, 40-2b02, 40-2b03, 40-2b05, 40-2b06,40-2b07, 40-2b24, 40-2b26, 40-2b27 and40-2b28 and K.S.A. 40-2b29, and amendments thereto, if:
(1) The aggregate amount of foreign investments then held by the insurerdoes not exceed 20% of its admitted assets; and
(2) the aggregate amount of foreign investments then held by the insurer ina single foreign jurisdiction does not exceed 10% of its admittedassets for jurisdictions that have a sovereign debt rating of SVO 1, or3% of its admitted assets for all other jurisdictions.
(c) Any life insurance company organized under any law of this state mayinvest,by loans or otherwise, with the direction or approval of a majority of itsboard of directors or authorized committee thereof, any of its funds, or anypart thereof, in investments of the same types as those that an insurer ispermitted to acquire under K.S.A. 40-2b01, 40-2b02, 40-2b03, 40-2b05, 40-2b06,40-2b07, 40-2b24, 40-2b26, 40-2b27 and 40-2b28 and K.S.A. 40-2b29,and amendments thereto, which aredenominated in foreign currencies,whether or not they are foreign investments acquired under subsection (b), if:
(1) The aggregate amount of investments then held by the insurerdenominated in foreign currencies does not exceed 10% of its admitted assets;and
(2) the aggregate amount of investments then held by the insurerdenominated in the foreign currency of a single foreign jurisdiction does notexceed 10% of its admitted assets for jurisdictions that have asovereign debt rating of SVO 1, or 3% of its admitted assetsfor all other jurisdictions.
(d) Notwithstanding the provisions of K.S.A. 40-2b13 and amendmentsthereto, the insurer's total foreign investments and investments denominated inforeign currencies shall not exceed the limitations set forth in subsections(b) and (c).
(e) The investment limitations in subsections (b) and (c) computed on thebasis of an insurer's admitted assets shall relate to the amount asshown on the insurer's lastannual report as filed with the commissioner of insurance or a morerecent quarterly financial statement as filed with the commissioner, on a formprescribed by the National Association of Insurance Commissioners, within 45days following the end of the calendar quarter to which the interim statementpertains.
(f) Investments acquired under this section shall be aggregated withinvestments of the same types made under K.S.A. 40-2b01,40-2b02, 40-2b03, 40-2b05, 40-2b06, 40-2b07, 40-2b24, 40-2b26, 40-2b27 and40-2b28 and K.S.A. 40-2b29, and amendments thereto, andin a similar manner, for purposes of determining compliance with the limits, ifany, contained in the other sections.
History: L. 1972, ch. 179, § 4;L. 1987, ch. 160, § 7;L. 1996, ch. 35, § 1; July 1.