IN Code § 27-1-12-2.4 (2021)
2021 Indiana Code|Title 27. Insurance|Article 1. Department of Insurance|Chapter 12. Life Insurance Company Powers and Policy Requirements|27-1-12-2.4. Participation in Certain Investment Pools; Requirements for Pooling Agreements

Sec. 2.4. (a) The following definitions apply to this section:(1) "Admitted assets" means a life insurance company's assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner.(2) "Affiliate" means, as to any person, another person that, directly or indirectly, through one (1) or more intermediaries:(A) controls;(B) is controlled by; or(C) is under common control with;the person.(3) "Business entity" means:(A) a sole proprietorship;(B) a corporation;(C) a limited liability company;(D) an association;(E) a partnership;(F) a joint stock company;(G) a joint venture;(H) a mutual fund;(I) a trust;(J) a joint tenancy; or(K) another, similar form of business organization;whether organized for-profit or not-for-profit.(4) "Cash" means any of the following:(A) United States denominated paper currency and coins.(B) Negotiable money orders and checks.(C) Funds held in any time or demand deposit in any depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.(5) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or non-management services), or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent (10%) or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The commissioner may determine, after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.(6) "Fixed charges" includes interest on funded and unfunded debt, amortization of debt discount, and rentals for leased property.(7) "Guaranteed or insured," when used in connection with an obligation acquired under this section, means that the guarantor or insurer has agreed to:(A) perform or insure the obligation of the obligor or purchase the obligation; or(B) be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity or sufficient liquidity to enable the obligor to pay the obligation in full.(8) "Investment company" means an investment company as defined in Section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.) and a person described in Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).(9) "Investment company series" means an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated.(10) "Market value" means:(A) as to cash, cash equivalents, and letters of credit, the amounts thereof; and(B) as to a security as of any date, the price for the security on that date obtained from a generally recognized source or the most recent quotation from such a source or, to the extent no generally recognized source exists, the price for the security as determined in good faith by the parties to a transaction, plus accrued but unpaid income on the security to the extent not included in the price as of that date.(11) "Multilateral development bank" means an international development organization of which the United States is a member.(12) "Mutual fund" means:(A) an investment company; or(B) in the case of an investment company that is organized as a series company, an investment company series;that is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).(13) "Obligation" means any of the following:(A) A bond.(B) A note.(C) A debenture.(D) Any other form of evidence of debt.(14) "Person" means an individual, a business entity, a multilateral development bank or a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise.(15) "Qualified bank" means a national bank, state bank, or trust company that:(A) at all times is not less than adequately capitalized, as determined by standards adopted by United States banking regulators; and(B) is regulated by state banking laws or is a member of the Federal Reserve System.(16) "Series company" means an investment company that is organized as a series company, as defined in 17 CFR 270.18f-2(a).(b) In addition to the authority to participate in investment pools under section 2(b)(31) of this chapter, a life insurance company may participate in investment pools that:(1) are qualified under this section; and(2) invest only in investments that an insurer may acquire under section 2 of this chapter;if the company's proportionate interest in the amount invested in these investments does not exceed the applicable limits of section 2 of this chapter.(c) For an investment pool to be qualified under this section, the investment pool shall not:(1) acquire securities issued, assumed, guaranteed, or insured by the insurer or an affiliate of the insurer; or(2) borrow or incur any indebtedness for borrowed money, except for securities lending, reverse repurchase, and dollar roll transactions that meet the requirements of section 2(b)(29) of this chapter.(d) A life insurance company shall not participate in an investment pool qualified under this section if, as a result of the participation and after giving effect to the participation, the aggregate amount of participation then held by the insurer in all investment pools under this section and under section 2(b)(31) of this chapter would exceed thirty-five percent (35%) of the admitted assets of the insurer.(e) For an investment pool to be qualified under this section:(1) the manager of the investment pool:(A) must be organized under the laws of the United States, a state or territory of the United States, or the District of Columbia;(B) must be designated as the pool manager in a pooling agreement; and(C) must be:(i) the insurer;(ii) an affiliated insurer;(iii) a business entity affiliated with the insurer;(iv) a qualified bank; or(v) a business entity registered under the Investment Advisors Act of 1940 (15 U.S.C. 80b-1 et seq.);(2) the pool manager or an entity of the type referred to in subdivision (1)(C) that is designated by the pool manager must compile and maintain detailed accounting records setting forth:(A) the cash receipts and disbursements reflecting each participant's proportionate participation in the investment pool;(B) a complete description of all underlying assets of the investment pool (including the amount, interest rate, maturity date (if any) and other appropriate designations); and(C) other records that, on a daily basis, allow third parties to verify each participant's interest in the investment pool; and(3) the assets of the investment pool must be held in one (1) or more accounts, in the name of or on behalf of the investment pool, in a qualified bank under a custody agreement or trust agreement that:(A) states and recognizes the claims and rights of each participant;(B) acknowledges that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of the participant's participation in the investment pool; and(C) contains an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the qualified bank or the assets of any other person.(f) The pooling agreement for an investment pool that is qualified under this section must be in writing and must provide the following:(1) Insurers, subsidiaries, or affiliates of insurers holding interests in the pool, or any pension or profit sharing plan of the insurers or their subsidiaries or affiliates, must at all times hold one hundred percent (100%) of the interests in the investment pool.(2) The underlying assets of the investment pool must 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 participation 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 shall occur within a reasonable and customary period thereafter. Payments upon withdrawals under this paragraph shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide for such payments to be made to the participants in one (1) of the following forms, 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.(6) The records of the investment pool shall be made available for inspection by the commissioner.As added by P.L.186-1997, SEC.3. Amended by P.L.124-2018, SEC.14.