Pennsylvania Code
Title 31 - INSURANCE
Part VIII - Miscellaneous Provisions
Chapter 151 - CONTINUING CARE PROVIDERS
Section 151.10 - Investments
Universal Citation: 31 PA Code ยง 151.10
Current through Register Vol. 54, No. 12, March 23, 2024
(a) Funds of a provider which are permitted or required to be invested under the act shall be invested in good faith and with the degree of care that an ordinarily prudent individual in a like position would exercise under similar circumstances.
(1) Funds which are required to be invested
shall include the entrance fees maintained in an escrow account, under section
12 of the act (40 P. S. §
3212).
(2) Funds which are permitted to be invested
shall include liquid reserves established under section 9 of the act
(40
P. S. §
3209), and reserve fund escrow
accounts established under section 10 of the act (40 P. S. §
3210).
(b) The exercise of due care and prudence requires consideration of the following factors:
(1) The protection of the principal
invested.
(2) The liquidity of the
invested funds.
(3) The
relationship between the maturity date of invested funds and the current
liabilities.
(4) The anticipated
investment yield.
(c) Liquid investments may include:
(1) Cash held
in an interest-bearing account of a financial institution.
(2) The following if the instrument is easily
converted to cash within a reasonable period of time:
(i) Certificates of deposit issued by a
financial institution.
(ii)
Money-market funds issued by a regulated investment company, as defined by
section 405(b.1) of the Insurance Company Law of 1921 (40 P. S. §
505(b.1)) (Repealed).
(iii) Acceptable negotiable securities as
defined in §
151.2 (relating to
definitions).
(iv) Commercial paper
in the form of promissory obligations of an issuer with an original maturity
date not exceeding 9 months from the date of issuance, having the highest
rating in a recognized rating publication.
(3) Securities which the provider can
demonstrate are saleable with reasonable promptness at a price corresponding
reasonably to fair value.
(d) For the purpose of determining whether the amounts held in investments satisfy the minimum amounts required by the act, liquid investments shall be valued at market value.
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