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(a) The board of directors of an insurer shall adopt a written plan for acquiring, holding, and investing in an investment and for engaging in an investment practice. The written plan must specify guidelines as to the quality, maturity, and diversification of investments and must contain other specifications including investment strategies intended to ensure that an investment or investment practice is appropriate for the business conducted by the insurer, the insurer's liquidity needs, and the insurer's capital and surplus. The board of directors 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.
(b) An investment acquired, held, and invested in under 3 AAC 21.201 - 3 AAC 21.399 must 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 that each investment has been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board of directors or a committee of the board of directors charged with the responsibility to direct its investments.
(c) On at least a quarterly basis, and more often if considered appropriate, an insurer s board of directors or committee of the board of directors shall
(1) receive and review a summary report on the insurer's investment portfolio, the insurer's investment activities, and the insurer's investment practices engaged in under delegated authority to determine whether the portfolio, activities, and practices are consistent with the written plan; and
(2) review and revise, as appropriate, the written plan.
(d) In discharging its duties under this section, the board of directors shall require that a record of any authorization or approval, other documentation as the board may require, and report of any action taken under authority delegated under the plan referred to in (a) of this section will be made available on a regular basis to the board of directors.
(e) In discharging a duty under this section, an individual director shall perform the duty in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(f) If an insurer does not have a board of directors, each reference to the board of directors in 3 AAC 21.201 - 3 AAC 21.399 shall be considered to be a reference to the governing body of the insurer having authority equivalent to that of a board of directors.
History: Eff. 12/28/2001, Register 160
Authority: AS 21.06.090
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Last modified 7/05/2006