Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 2 - Division of Insurance
Chapter 21 - Insurer - Financial
Article 2 - Investments
3 AAC 21.241 - Insurer investment pools for a life and health insurer
Universal Citation: 3 AK Admin Code 21.241
Current through February 24, 2025
(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.
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
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