83-7-21 - Reserve liabilities.
§ 83-7-21. Reserve liabilities.
The reserve liabilities for all policies in force in any domestic company being ascertained in the manner provided in Section 83-7-23, the Insurance Commissioner shall notify it of the amount. The officers of such company shall deposit with the State Treasurer for the security and benefit of all the policyholders the sum of One Hundred Thousand Dollars ($100,000.00). Provided, this sum may be increased to the amount necessary for a domestic company to be qualified to do business in another state, so long as such state will accept a certificate verified by the State Treasurer of Mississippi showing that such company has on deposit in Mississippi the required sum.
So long as the company continues solvent and complies with the laws of the state, it may collect the income on such securities. The company may substitute therefor other securities recognized by law as lawful investments of the company; provided, however, it shall be the duty of the State Treasurer to accept from such insurance companies securities tendered to him for deposit upon the representation of such companies by their officers or agents that such securities comply with the laws of the State of Mississippi, as provided in this chapter. Once a year the Insurance Commissioner shall examine all of the securities so deposited and all of the securities held as reserves by each company and either approve or disapprove such securities. Should he disapprove any such securities, then such securities shall be replaced by such companies with other securities approved by the Insurance Commissioner, sufficient in amount to comply with the requirement of deposit with the State Treasurer and sufficient in amount under the law. Any fraud on the part of any officer or agent of a company in making any substitution of securities shall be a violation of law and subject any such person to the penalties provided in this chapter.
It is also provided that all bonds or other evidences of debt having a fixed term and rate held by any life insurance company authorized to do business in this state may, if amply secured and not in default as to principal and interest, be valued as follows: if purchased at par, at the par value; if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made; provided that the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase; and, provided further that the Insurance Commissioner shall have full discretion in determining the method of calculating values according to the foregoing rule.
When in the opinion of the State Treasurer there is insufficient space in vaults and safes in the Treasury Department in which to keep the securities as provided in this chapter, then the State Treasurer is authorized, empowered, and directed to:
(a) Deposit for safekeeping in the vaults of any of the state or national banks located within this state which are members of the Federal Deposit Insurance Corporation and which have appropriate safekeeping facilities which have been approved by the State Depository Commission, any Federal Reserve bank, any Federal Reserve branch bank, or any bank which is a member of the Federal Reserve system and is located in a city where there is a Federal Reserve branch bank, the securities placed with him by insurance companies; or
(b) Accept, in lieu of the securities themselves, safekeeping trust receipts issued to the State Treasurer by the authorized safekeeping banks located within this state which are members of the Federal Deposit Insurance Corporation and which have appropriate safekeeping facilities which have been approved by the State Depository Commission, such safekeeping trust receipts to describe the securities and show that such securities are held for safekeeping for the account of the State Treasurer. The securities so deposited shall not be commingled in any manner with the assets of the safekeeping bank.
The State Treasurer shall be responsible to such insurance companies for any loss of securities deposited with and actually held by the State Treasurer under the provisions of this chapter.
Notwithstanding any other provision of law, the securities qualified for deposit under this section may be deposited with a clearing corporation or held in the Federal Reserve book-entry system. Securities deposited with a clearing corporation or held in the Federal Reserve book-entry system and used to meet the deposit requirements set forth in this section shall be under the control of the Insurance Commissioner and shall not be withdrawn by the insurance company without the approval of the Insurance Commissioner. Any insurance company holding securities in such manner shall provide to the Insurance Commissioner evidence issued by its custodian or member bank through which such insurance company has deposited such securities in a clearing corporation or through which such securities are held in the Federal Reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian or other direct participant or member bank, and that the records of the custodian, other participant or member bank reflect that such securities are held subject to the order of the Insurance Commissioner.
Sources: Codes, 1942, § 5669-01; Laws, 1948, ch. 345, § 1; Laws, 1970, ch. 449, § 1; Laws, 1984, ch. 340; Laws, 1985, ch. 418; Laws, 2001, ch. 412, § 4, eff from and after July 1, 2001.