The factors in clauses (1) to (12) shall be evaluated by the insurer and considered along with its business in determining whether an investment portfolio or investment policy is prudent. The commissioner shall consider the factors in clauses (1) to (12) before making a determination that an insurer’s investment portfolio or investment policy is not prudent:

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Terms Used In Minnesota Statutes 60L.05

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Tax: means any fee, charge, exaction, or assessment imposed by a governmental entity on an individual, person, entity, transaction, good, service, or other thing. See Minnesota Statutes 645.44

(1) general economic conditions;

(2) the possible effect of inflation or deflation;

(3) the expected tax consequences of investment decisions or strategies;

(4) the fairness and reasonableness of the terms of an investment considering its probable risk and reward characteristics and relationship to the investment portfolio as a whole;

(5) the extent of the diversification of the insurer’s investments among individual investments, classes of investments, industry concentrations, dates of maturity, and geographic areas;

(6) the quality and liquidity of investments in affiliates;

(7) the investment exposure to the following risks, quantified in a manner consistent with the insurer’s acceptable risk level identified in section 60L.06, clause (8): liquidity; credit and default; systemic (market); interest rate; call, prepayment and extension; currency; and foreign sovereign;

(8) the amount of the insurer’s assets, capital and surplus, premium writings, insurance in force, and other appropriate characteristics;

(9) the amount and adequacy of the insurer’s reported liabilities;

(10) the relationship of the expected cash flows of the insurer’s assets and liabilities, and the risk of adverse changes in the insurer’s assets and liabilities;

(11) the adequacy of the insurer’s capital and surplus to secure the risks and liabilities of the insurer; and

(12) any other factors relevant to whether an investment is prudent.