51-7-12.5 - Deposit or investment of the Employers' Reinsurance Fund and Uninsured Employers' Fund -- Authorized deposits and investments -- Asset manager.
51-7-12.5. Deposit or investment of the Employers' Reinsurance Fund andUninsured Employers' Fund -- Authorized deposits and investments -- Asset manager.
(1) The principal of the Employers' Reinsurance Fund created in Section 34A-2-702, andthe Uninsured Employers' Fund created in Section 34A-2-704 shall be deposited or invested onlyin the following:
(a) any deposit or investment authorized by Section 51-7-11;
(b) equity securities, including common and preferred stock issued by corporations listedon a major securities exchange, in accordance with the following criteria applied at the time ofinvestment:
(i) the treasurer may not invest more than 5%, determined on a cost basis, of the totalfund assets in the securities of any one issuer;
(ii) the treasurer may not invest more than 25%, determined on a cost basis, of total fundassets in a particular industry;
(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the totalfund assets in securities of corporations that have been in continuous operation for less than threeyears;
(iv) the fund may not hold in excess of 5% of the outstanding voting securities of any onecorporation; and
(v) at least 75% of the corporations in which investments are made under Subsection(1)(b) must appear on the Standard and Poor's 500 Composite Stock Price Index;
(c) fixed-income securities, including bonds, notes, mortgage securities, zero couponsecurities and convertible securities issued by domestic corporations rated "A" or higher byMoody's Investors Service, Inc. or by Standard and Poor's Corporation in accordance with thefollowing criteria applied at the time of investment:
(i) the treasurer may not invest more than 5%, determined on a cost basis, of the totalfund assets in the securities of any one issuer;
(ii) the treasurer may not invest more than 25%, determined on a cost basis, of the totalfund assets in a particular industry;
(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the totalfund assets in securities of corporations that have been in continuous operation for less than threeyears; and
(iv) the dollar-weighted average maturity of fixed-income securities acquired underSubsection (1)(c) may not exceed 10 years;
(d) fixed-income securities issued by agencies of the United States andgovernment-sponsored organizations, including mortgage-backed pass-through certificates andmortgage-backed bonds;
(e) shares of an open-end diversified management investment company established underthe Investment Companies Act of 1940; or
(f) shares of or deposits in a pooled-investment program.
(2) (a) No more than 65% of the total fund assets of any of these funds, on a cost basis,may be invested in common or preferred stocks at any one time.
(b) At least 35% of the total assets of these funds shall be invested in fixed-incomesecurities authorized by Section 51-7-11 and Subsections (1)(c) and (d).
(3) The state treasurer shall use appropriate investment strategies to protect the principalof the funds administered under this section during periods of financial market volatility.
(4) (a) The state treasurer may employ professional asset managers to assist in theinvestment of assets of the funds.
(b) The treasurer may provide compensation to asset managers from earnings generatedby the funds' investments.
Amended by Chapter 103, 2002 General Session