ARTICLE 6

INVESTMENTS

 

PART I. GENERAL PROVISIONS

 

§431:6-101  Definitions pertaining toinvestments.  (a)  For purposes of this article:

"Cash" includes cash equivalents.

"Cash equivalents" means highly-ratedand highly-liquid investments or securities with a remaining term of ninetydays or less and rated in the highest short-term category by a nationallyrecognized statistical rating organization recognized by the SVO.  Cashequivalents include government money market mutual funds and class one moneymarket mutual funds defined by the Purposes and Procedures Manual of the SVO,or its successor publication.

"Fixedcharges" means interest on funded and unfunded debt, amortization of debtdiscount, and rentals for leased properties.

"Institution"means corporations, joint-stock associations, and business trusts.

"Netearnings available for fixed charges" means net income after deductingoperating and maintenance expenses, taxes other than federal and state incometaxes, depreciation, and depletion, but excluding extraordinary nonrecurringitems of income or expense appearing in the regular financial statements ofsuch institution.

"Obligation"means bonds, debentures, notes, or other evidence of indebtedness.

"Surplusas regards to policyholders" means the excess of the insurer's admittedassets over its liabilities.

"SVO"means the Securities Valuation Office of the National Association of InsuranceCommissioners.

"Value" means fair value.  Marketvalue is the best evidence of fair value.

(b)  If net earnings are determined in relianceupon consolidated earnings statements of parent and subsidiary institutions:

(1)  The net earnings shall be determined afterprovision for income taxes of subsidiaries and after proper allowance forminority stock interest, if any, and

(2)  The required coverage of fixed charges shall becomputed on a basis including fixed charges and preferred dividends ofsubsidiaries other than those payable by the subsidiaries to the parentcorporation or to any other of the subsidiaries.

Except that if the minority common stock interest inthe subsidiary corporation is substantial, the fixed charges and preferreddividends may be apportioned in accordance with regulations prescribed by thecommissioner. [L 1987, c 347, pt of §2; am L 2008, c 142, §1]