Vermont Statutes Title 8 Sec. 3461b
Terms Used In Vermont Statutes Title 8 Sec. 3461b
- Admitted assets: means assets permitted to be reported as admitted assets on the annual statutory financial statement of the insurer for the next preceding year or as shown by a current financial statement. See
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Asset-backed security: means a security or other instrument, excluding a mutual fund, evidencing an interest in, or the right to receive payments from, or payable from distributions on, an admitted asset, a pool of admitted assets, or specifically divisible cash flows which are legally transferred to a trust or another special purpose bankruptcy-remote business entity, on the following conditions:
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- business entity: includes a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for profit or not for profit. See
- Canada: means Canada, any province of Canada, or any political subdivision of Canada. See
- Domestic: when applied to a corporation, company, association, or copartnership shall mean organized under the laws of this State; "foreign" when so applied, shall mean organized under the laws of another state, government, or country. See
- Guaranteed: means that the guarantor will perform the obligation of the obligor or will purchase the obligation to the extent of the guaranty. See
- Person: shall include any natural person, corporation, municipality, the State of Vermont or any department, agency, or subdivision of the State, and any partnership, unincorporated association, or other legal entity. See
§ 3461b. General limitations and diversification requirements for life and health insurers
(a) General three percent diversification.
(1) Except as otherwise specified in this subchapter, a domestic life and health insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under this subchapter if, as a result of and after giving effect to the investment, the insurer would hold more than three percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured or guaranteed by a single person.
(2) This three percent limitation shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally-recognized statistical rating organization.
(3) Asset-backed securities shall not be subject to the limitations of subdivision (1) of this subsection; however, an insurer shall not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity then held by the insurer would exceed three percent of its admitted assets.
(b) An insurer subject to this section shall comply with applicable regulations addressing investments in lower and medium grade obligations.
(c) Canadian investments.
(1) An insurer subject to this section shall not acquire, directly or indirectly through an investment subsidiary, a Canadian investment authorized by this subchapter if, as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed 40 percent of its admitted assets or if the aggregate amount of Canadian investments not acquired under subdivision 3461c(2) of this title then held by the insurer would exceed 25 percent of its admitted assets.
(2) However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subdivision (1) of this subsection shall be increased by the greater of:
(A) the amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or
(B) 115 percent of the amount of its reserves and other obligations under contracts on lives or risks resident or located in Canada. (Added 1999, No. 84 (Adj. Sess.), § 3, eff. April 19, 2000.)