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(a) Except as provided in (d) of this section, and without the prior written approval of the director that will be given only if the transaction is consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201 and is in the public interest, an insurer may not directly or indirectly
(1) make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest;
(2) make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest; or
(3) enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest.
(b) For purposes of (a) of this section, an officer or director is not considered to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than two percent of all outstanding equity interests issued by a person that is a party to a transaction referenced in (a) of this section.
(c) The provisions of (a) of this section do not
(1) permit an investment that is prohibited by 3 AAC 21.216; and
(2) apply to a transaction between an insurer and a subsidiary or affiliate that is entered into in compliance with AS 21.22, except for a transaction between the insurer and its officers or directors.
(d) An insurer may make, without the prior written approval of the director,
(1) a policy loan in compliance with the terms of the policy or contract and 3 AAC 21.276;
(2) an advance to an officer or director for an expense reasonably expected to be incurred in the ordinary course of the insurer's business or a guarantee associated with a credit or charge card issued or credit extended for the purpose of financing these expenses;
(3) a loan secured by the principal residence of an officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loan complies with the requirements of 3 AAC 21.256 or 3 AAC 21.350 and the terms and conditions are otherwise the same as those generally available from an unaffiliated third party;
(4) a secured loan to an officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loan
(A) does not have a term exceeding two years;
(B) is required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;
(C) does not exceed an amount equal to the equity of the officer in the prior residence; and
(D) is required to be fully repaid upon the earlier of the end of the two-year period described in (A) of this paragraph or the sale of the prior residence; and
(5) a loan or advance to an officer or director made in compliance with state or federal law specifically related to the loan or advance by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms that are not more favorable than those available to other customers of the entity.
History: Eff. 12/28/2001, Register 160
Authority: AS 21.06.090
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Last modified 7/05/2006