Iowa Administrative Code › Agency 191 - Insurance Division › Insurance Coverage for Pediatric Preventive Services › Chapter 99 - Limited Purpose Subsidiary Life Insurance Companies › Rule 191-99.11 - Investments

Current through Register Vol. 47, No. 3, July 24, 2024
Administration of assets.
The investment
				  program developed by an LPS shall take into account the safety of the company's
				  assets, investment yield and return, stability in the value of the investment,
				  and liquidity necessary to meet the company's expected business needs and
				  investment diversification. The assets of an LPS shall be preserved and
				  administered by or on behalf of the LPS to satisfy the liabilities and
				  obligations of the LPS incident to the reinsurance contract, the insurance
				  securitization, and other related agreements. For the purposes of this subrule,
				  assets do not include letters of credit and guaranties of a parent. An LPS
				  shall only invest its assets in cash and securities that are investment grade
				  at the time of acquisition, provided, however, that an LPS may invest up to 10
				  percent of its assets in securities or other investments that are not
				  investment grade at the time of acquisition and that are not:
a. Securities rated 5 or higher by the
				Securities Valuation Office of the National Association of Insurance
				Commissioners at the time of acquisition;
b. Asset-backed or mortgage-backed securities
				rated 3 or higher by the Securities Valuation Office of the National
				Association of Insurance Commissioners at the time of acquisition;
c. Convertible bonds;
d. Preferred or common stock; and
e. Private equity or hedge funds.
Securitization agreements.
The LPS
				  securitization, the security-offering memorandum or other document issued to
				  prospective investors regarding the offer and sale of a surplus note or other
				  security shall include a disclosure that all or part of the proceeds of such
				  insurance securitization will be used to fund the LPS's obligations to the
				  ceding insurer
Admitted assets.
Admitted assets of the LPS
				  shall include proceeds from a securitization, premium and other amounts payable
				  by a ceding insurer to the LPS, letters of credit, guaranties of a parent, and
				  any other assets approved by the commissioner, which shall be deemed to be, and
				  reported as, admitted assets of the LPS. The commissioner has the authority to
				  reduce the amount of admitted assets previously approved by the commissioner,
				  other than assets already covered by the Accounting Practices and Procedures
				  Manual of the National Association of Insurance Commissioners, if the
				  commissioner determines that the value of those assets has decreased. At least
				  30 days prior to reducing the amount of admitted assets previously approved,
				  the commissioner shall notify the LPS and provide the LPS an opportunity to
				  remedy the issues identified by the commissioner.
Loans.
An LPS shall not make a loan to or
				  an investment in any person, other than as permitted in the LPS's plan of
				  operation, without prior written approval of the commissioner, and any such
				  loan or investment must be evidenced by documentation approved by the
				  commissioner Loans of minimum capital and surplus funds are prohibited.
Investments in
LPS. The organizing life
				  insurance company shall report its ownership in the LPS and value such
				  ownership equal to the audited statutory surplus of the LPS.