Kentucky Statutes 304.7-361 – Duties of insurer’s board of directors
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(1) An insurer’s board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, diversification of investments, and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board shall review and assess the insurer’s technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(2) Investments acquired and held under this subtitle shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
(3) On no less than a quarterly basis, and more often if deemed appropriate, an insurer’s board of directors or committee of the board of directors shall:
(a) Receive and review a summary report on the insurer’s investment portfolio, its investment activities, and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and
(b) Review and revise, as appropriate, the written plan.
(4) In discharging its duties under this section, the board of directors shall require that records of any authorizations or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection (1) of this section shall be made available on a regular basis to the board of directors.
(5) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(6) If an insurer does not have a board of directors, all references to the board of directors in this subtitle shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
Effective: July 14, 2000
History: Created 2000 Ky. Acts ch. 388, sec. 3, effective July 14, 2000.
(2) Investments acquired and held under this subtitle shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
Terms Used In Kentucky Statutes 304.7-361
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Investment practices: means transactions of the types described in KRS §. See Kentucky Statutes 304.7-012
- Investment strategy: means the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing. See Kentucky Statutes 304.7-012
(3) On no less than a quarterly basis, and more often if deemed appropriate, an insurer’s board of directors or committee of the board of directors shall:
(a) Receive and review a summary report on the insurer’s investment portfolio, its investment activities, and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and
(b) Review and revise, as appropriate, the written plan.
(4) In discharging its duties under this section, the board of directors shall require that records of any authorizations or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection (1) of this section shall be made available on a regular basis to the board of directors.
(5) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(6) If an insurer does not have a board of directors, all references to the board of directors in this subtitle shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
Effective: July 14, 2000
History: Created 2000 Ky. Acts ch. 388, sec. 3, effective July 14, 2000.