Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 6 - General › Section Ins 6.20 - Investments of insurance companies

Current through June 24, 2024
(1) PURPOSE. The
			 purpose of this rule is to implement and interpret ch. 620, Stats., for the
			 purpose of establishing procedures and requirements for investments of
			 insurance companies.
(2) SCOPE.
			 This rule shall apply to all insurers subject to ch. 620, Stats.
(3) DEFINITIONS. As used in this rule:
(am) "Derivative instrument" has the meaning
			 contained in the accounting practices and procedures manual of the national
			 association of insurance commissioners. "Derivative instrument" includes
			 derivatives embedded within an investment.
(c) "Financial instrument" means a security,
			 currency, or index of a group of securities or currencies.
(e) "Fixed charges" includes interest on all
			 debt, and amortization of debt discount.
(ee) "Foreign country" means any country
			 other than the United States and Canada.
(em) "Foreign government" means any
			 governmental unit or instrumentality that is not in the United States or
			 Canada.
(es) "Foreign issuer" means
			 any issuer that is not domiciled in the United States or Canada and is not a
			 foreign government. An issuer domiciled in the United States or Canada shall be
			 deemed a foreign issuer when the issuer is a shell business entity or special
			 purpose vehicle, unless the investment is assumed, accepted, guaranteed,
			 insured or otherwise backed by an entity domiciled in the United States or
			 Canada that is not a shell business entity or special purpose
			 vehicle.
(f) "Money market mutual
			 fund" means a fund that meets the conditions of 17 Code of Federal Regulations
			 Par. 270.2a-7, under the Investment Company Act of 1940 (
			 15 USC
			 80a-1 et seq.), as amended or
			 renumbered.
(g) "Net earnings
			 available for fixed charges" means income after allowance for operating and
			 maintenance expenses, depreciation and depletion, and taxes other than federal
			 and state income taxes, but without allowance for extraordinary nonrecurring
			 items of income or expense appearing in the regular financial statements of the
			 issuing company. If the issuing company has acquired, prior to the date of
			 investment, substantially all the assets of another company by purchase,
			 merger, consolidation or otherwise, the net earnings available for fixed
			 charges of the other company for the portion of the test period that preceded
			 acquisition may be included in accordance with a consolidated earnings
			 statement covering the period.
(h)
			 "Net earnings available for fixed charges and dividends" shall be determined in
			 the same manner as "net earnings available for fixed charges" but after
			 allowance for federal and state income taxes.
(hg) "Nationally Recognized Statistical
			 Rating Organization" or "NRSRO" means a credit rating agency registered with
			 the U.S. securities and exchange commission, pursuant to the Credit Rating
			 Agency Reform Act of 2006, as amended.
(hr) "No-load mutual fund" means a mutual
			 fund whose shares are sold without any sales charges, or commissions, including
			 sales compensation that is on an immediate or deferred basis or in some
			 combination of immediate and deferred compensation. No-load mutual funds may
			 impose fees for redemption, exchange, distribution, marketing, or other
			 purposes unrelated to sales charges or commissions.
(i) "Preferred dividend requirements" include
			 dividends at the maximum prescribed rate on all stock ranking as to dividends
			 on parity with or prior to that being acquired, whether or not the dividends
			 are cumulative.
(k) "Real estate"
			 or "real property" includes leaseholds.
(l) "Repurchase transaction" means a
			 transaction in which an insurer purchases securities from a business entity
			 which is obligated to repurchase the purchased securities or equivalent
			 securities from the insurer at a specified price, either within a specified
			 period or upon demand.