Made available by
Touch N' Go Systems, Inc., and the
Law Offices of James B. Gottstein.
You can also go to The Alaska Legal Resource Center or search the entire website search.
(a) An insurer may acquire, hold, or invest in an investment or engage in an investment practice as set out in 3 AAC 21.201 - 3 AAC 21.399. An investment that does not conform to 3 AAC 21.201 - 3 AAC 21.399 is not an admitted asset.
(b) Subject to (c) of this section, an insurer may not acquire, hold, or invest in an investment as an admitted asset unless, at the time of acquisition, the investment is
(1) eligible for the payment or accrual of interest or discount, whether in cash or other securities;
(2) eligible to receive dividends or other distributions;
(3) income producing; or
(c) An insurer may acquire, hold, or invest in as an admitted asset an investment that does not otherwise qualify under 3 AAC 21.201 - 3 AAC 21.399 if the insurer has not acquired the investment for the purpose of circumventing any limitations contained in 3 AAC 2 1.201 - 3 AAC 21.399, if the insurer complies with the provisions of AS 21.18.170 and 3 AAC 21.216 as to the investment, and if the insurer acquires the investment in one or more of the following circumstances:
(1) as payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness if taken to protect the insurer's interest in that investment;
(2) as realization on collateral for an obligation;
(3) in connection with an otherwise qualified investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice, or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;
(4) under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer;
(5) under a bulk reinsurance, merger, or consolidation transaction approved by the director if the assets constitute admitted assets for the ceding, merged, or consolidated companies.
(d) An investment or portion of an investment acquired, held, or invested in by an insurer under (c) of this section becomes a nonadmitted asset three years after the date of its acquisition, or five years after the date of its acquisition in the case of a mortgage loan and real estate, unless, within the applicable period, the investment has become a qualified investment under a provision of 3 AAC 21.201 - 3 AAC 21.399 other than (c) of this section. However, an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if a longer period is provided in the plan for reinsurance, merger, or consolidation as approved by the director under AS 21.22.010 and AS 21.69.590 - 21.69.620. Upon application by an insurer and a showing, to the director's satisfaction, that the nonadmission of an asset held under (c) of this section would materially injure the interest of the insurer, the director will extend the period for admissibility for an additional reasonable period of time.
(e) Except as provided in (f) and (h) of this section, an investment qualifies under 3 AAC 21.201 - 3 AAC 21.399 if, on the date the insurer committed to acquire, hold, or make the investment or on the date of its acquisition, it would have qualified under 3 AAC 21.201 - 3 AAC 21.399. For the purposes of determining limitations contained in 3 AAC 21.201 - 3 AAC 21.399, an insurer shall give recognition to any commitments to acquire investments.
(f) On December 28, 2001,
(2) each specific transaction constituting an investment practice of the type described in 3 AAC 21.201 - 3 AAC 21.399 that was lawfully entered into by an insurer and was in effect will continue to be permitted under 3 AAC 21.201 - 3 AAC 21.399 until its expiration or termination under its terms.
(g) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or an insurer's capital and surplus must relate to the amount required to be shown on the insurer's financial statement most recently required to be filed with the director under AS 21.09.200 , AS 21.09.205 , and 3 AAC 21.400. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on that financial statement for the
(1) return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;
(2) cash received in a dollar roll transaction; and
(3) amount reported as borrowed money to the extent not included in (1) and (2) of this subsection.
(h) An investment qualified, in whole or in part, for acquiring, holding, or investing in as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other provision of 3 AAC 21.201 - 3 AAC 21.399 if the relevant conditions contained in the other provision are satisfied at the time of qualification or requalification.
(i) An insurer shall maintain documentation demonstrating that investments were acquired, held, or invested as required by 3 AAC 21.201 - 3 AAC 21.399 and specifying the provision of 3 AAC 21.201 - 3 AAC 21.399 under which they were acquired, held, or invested.
(j) An insurer may not enter into an agreement to purchase a security in advance of its issuance for resale to the public as part of a distribution of the security by an issuer or otherwise guarantee the distribution, except that an insurer may acquire a privately placed security with registration rights.
(k) Notwithstanding the provisions of 3 AAC 21.201 - 3 AAC 21.399, the director may order an insurer to nonadmit, limit, dispose of, or withdraw from or discontinue an investment or investment practice if the director finds that the investment or investment practice is not consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201.
History: Eff. 12/28/2001, Register 160
Authority: AS 21.06.090
Note to HTML Version:
The Alaska Administrative Code was automatically converted to HTML from a plain text format. Every effort has been made to ensure its accuracy, but neither Touch N' Go Systems nor the Law Offices of James B. Gottstein can be held responsible for any possible errors. This version of the Alaska Administrative Code is current through June, 2006.
If it is critical that the precise terms of the Alaska Administrative Code be known, it is recommended that more formal sources be consulted. Recent editions of the Alaska Administrative Journal may be obtained from the Alaska Lieutenant Governor's Office on the world wide web. If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful. Copyright 2006. Touch N' Go Systems, Inc. All Rights Reserved.
Last modified 7/05/2006