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.

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website to see how.
Title 3 . Commerce, Community, and Economic Development
Chapter 21 . Miscellaneous
Section 241. Insurer investment pools for a life and health insurer

3 AAC 21.241. Insurer investment pools for a life and health insurer

(a) A life and health insurer may acquire, hold, or make an investment in an investment pool that invests only in an investment

(1) that a life and health insurer may acquire under 3 AAC 21.201 - 3 AAC 21.399, if the life and health insurer's proportionate interest in the amount invested in that investment does not exceed the quantitative limitations of 3 AAC 21.201 - 3 AAC 21.399; or

(2) described in (b) of this section.

(b) For purposes of (a)(2) of this section, a life and health insurer may acquire, hold, or make an investment in an investment pool that invests only in

(1) an obligation that

(A) is rated one or two by the securities valuation office, or has an equivalent rating by a nationally recognized statistical rating organization; an obligation without a one or two rating or an equivalent rating must be issued by an issuer whose outstanding obligations are rated one or two by the securities valuation office, or whose obligations have an equivalent rating by a nationally recognized statistical rating organization; and

(B) has a remaining maturity of

(i) 397 days or less or a put that entitles the holder to receive the principal amount of the obligation that may be exercised through maturity at specified intervals not exceeding 397 days; or

(ii) three years or less and a floating interest rate that resets at least quarterly on the basis of a short term index of federal funds, of the prime rate, of treasury bills, of the London InterBank Offered Rate (LIBOR), or of commercial paper, and is not subject to a maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes;

(2) a government money market mutual fund or class one money market mutual fund; or

(3) a security lending, repurchase, or reverse repurchase transaction that meets all the requirements of 3 AAC 21.261(a) - (c) and (e).

(c) A life and health insurer may not acquire, hold, or make an investment in an investment pool if the investment pool

(1) acquires a security issued, assumed, guaranteed, or insured by the life and health insurer or an affiliate of the life and health insurer;

(2) borrows money or incurs indebtedness for borrowed money, except as part of a securities lending or reverse repurchase transaction that meets all the requirements of 3 AAC 21.261(a) - (c) and (e); or

(3) permits the aggregate value of securities loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10 percent of the total assets of the investment pool.

(d) The limitations of 3 AAC 21.231(a) do not apply to a life and health insurer's investment in an investment pool. However, a life and health insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this section in

(1) any one investment pool would exceed 10 percent of the life and health insurer's admitted assets;

(2) all investment pools investing in investments permitted under (a)(1) of this section would exceed 25 percent of the life and health insurer's admitted assets; or

(3) all investment pools would exceed 35 percent of the life and health insurer's admitted assets.

(e) A life and health insurer may acquire, hold, or make an investment in an investment pool if the manager of the investment pool

(1) is organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;

(2) is

(A) the life and health insurer, an affiliated insurer, a business entity affiliated with the life and health insurer, a qualified bank, or a business entity registered under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisors Act of 1940);

(B) in the case of a reciprocal life and health insurer or interinsurance exchange, its attorney-in-fact; or

(C) in the case of a United States branch of an alien life and health insurer, its United States manager or an affiliate or subsidiary of its United States manager;

(3) compiles and maintains detailed accounting records

(A) setting out the cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;

(B) describing completely each underlying asset of the investment pool, including the amount, interest rate, and maturity date, if any, of each asset; and

(C) allowing a third party, on a daily basis, to verify each participant's investment in the investment pool; and

(4) maintains the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank; the custody agreement must

(A) state and recognize the claims and rights of each participant;

(B) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of each participant's investments in the investment pool; and

(C) contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.

(f) The pooling agreement for each investment pool must be in writing and must provide that

(1) at all times, 100 percent of the interests in the investment pool shall be held by

(A) a life and health insurer or an affiliated insurer of the life and health insurer, except as provided in (B) and (C) of this paragraph;

(B) if the investment pool invests only in investments permitted under (a)(2) and (b) of this section, a life and health insurer and a

(i) subsidiary or affiliate of the life and health insurer; or

(ii) pension or profit sharing plan of a life and health insurer, or of a subsidiary or affiliate of the life and health insurer; or

(C) if the life and health insurer is the United States branch of an alien life and health insurer, an affiliate or subsidiary of the alien insurer's United States manager;

(2) the underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;

(3) in proportion to the aggregate amount of each pool participant's interest in the investment pool,

(A) each participant owns an undivided interest in the underlying assets of the investment pool; and

(B) the underlying assets of the investment pool are held solely for the benefit of each participant;

(4) a participant, or in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;

(5) withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds must occur within a reasonable and customary period, not to exceed five business days, following the demand; in each case, distributions under this paragraph must be calculated net of all then applicable fees and expenses of the investment pool;

(6) the pool manager shall distribute to a participant, at the discretion of the pool manager,

(A) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;

(B) in kind, a pro rata share of each underlying asset; or

(C) in a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and

(7) the pool manager shall make the records of the investment pool available for inspection by the director.

History: Eff. 12/28/2001, Register 160

Authority: AS 21.06.090

AS 21.18.010

AS 21.18.030

AS 21.18.040

AS 21.18.170

AS 21.21.010

AS 21.21.020

AS 21.21.255

AS 21.21.420


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