Article 2a.--INVESTMENTS BY OTHER THAN LIFE INSURANCE COMPANIES
40-2a08.Common stocks; call options.Any insurance company other than life heretofore or hereafter organizedunder any law of this state may invest by loans or otherwise, with thedirection or approval ofa majority of its board of directors or authorized committee thereof,any of its funds, or any part thereof in the common stock of anycorporation organized and doing business under the laws of the UnitedStates of America, or of any state, district, insular or territorialpossession thereof; or of the Dominion of Canada or any provincethereof; or of any other country or subdivision thereof; in an amount,based upon cost, not exceeding 15% of its admitted assets or not exceedingthe combined capital and surplus, whichever is the lesser, as shown by thecompany's last annual report as filed with the state commissioner ofinsurance or a more recent quarterly financial statement as filed with thecommissioner, on a form prescribed by the national association of insurancecommissioners, within 45 days following the end of the calendar quarter towhich the interim statement pertains. Such insurance company maywrite exchange traded, covered call options on shares it owns and maypurchase call options for the sole purpose of closing out a positiontaken previously with respect to one or more options having beenwritten. The purchase of a call option for any reason other than as aclosing transaction and the writing of naked (uncovered) call optionsare hereby prohibited. Investments in common stocks and the writing ofcall options shall be further limited as follows:
(a) The obligations, if any, shown on the lastpublished annual statement of such corporation must be eligible forinvestment under K.S.A. 40-2a05, andamendments thereto;
(b) cash dividends have been paid during each of the last threeyears preceding the date of acquisition;
(c) the stock is registered with a national securities exchangeregulated under the securities exchange act of 1934, as amended, or isregularly traded on a national or regional basis;
(d) the company shall have earnings in three of the last five yearsprecedingthe date of acquisition;
(e) investments in common stock in any one corporation shall at notime exceed 2% of the admitted assets of the investinginsurance company determined on the basis of the cost of such shares tothe insurance company at time of purchase, and at no time shall aninsurance company purchasemore than 5% of the outstanding shares of stock of anyone given corporation;
(f) stock owned by an insurance company that is obligated under anunexpired written call option shall be valued at the lesser of thestriking price or current market value. For the purposes of thissubsection, "striking price" means the price per share, exclusive ofselling costs, the company would receive should the call option beexercised by the holder;
(g) the provisions of subsections (b) and (d) shall not apply, if at thetime of acquisition:
(1) The issuing corporation has net assets of $10,000,000 or more;
(2) the issuing corporation has a net worth of $1,000,000 or more; and
(3) the issuing corporation has an aggregate market value of $500,000,000 ormore.
History: L. 1972, ch. 173, § 8; L. 1978, ch. 172, § 1; L. 1983,ch. 156, § 1;L. 1987, ch. 160, § 4;L. 1995, ch. 22, § 1; July 1.
Article 2a.--INVESTMENTS BY OTHER THAN LIFE INSURANCE COMPANIES
40-2a08.Common stocks; call options.Any insurance company other than life heretofore or hereafter organizedunder any law of this state may invest by loans or otherwise, with thedirection or approval ofa majority of its board of directors or authorized committee thereof,any of its funds, or any part thereof in the common stock of anycorporation organized and doing business under the laws of the UnitedStates of America, or of any state, district, insular or territorialpossession thereof; or of the Dominion of Canada or any provincethereof; or of any other country or subdivision thereof; in an amount,based upon cost, not exceeding 15% of its admitted assets or not exceedingthe combined capital and surplus, whichever is the lesser, as shown by thecompany's last annual report as filed with the state commissioner ofinsurance or a more recent quarterly financial statement as filed with thecommissioner, on a form prescribed by the national association of insurancecommissioners, within 45 days following the end of the calendar quarter towhich the interim statement pertains. Such insurance company maywrite exchange traded, covered call options on shares it owns and maypurchase call options for the sole purpose of closing out a positiontaken previously with respect to one or more options having beenwritten. The purchase of a call option for any reason other than as aclosing transaction and the writing of naked (uncovered) call optionsare hereby prohibited. Investments in common stocks and the writing ofcall options shall be further limited as follows:
(a) The obligations, if any, shown on the lastpublished annual statement of such corporation must be eligible forinvestment under K.S.A. 40-2a05, andamendments thereto;
(b) cash dividends have been paid during each of the last threeyears preceding the date of acquisition;
(c) the stock is registered with a national securities exchangeregulated under the securities exchange act of 1934, as amended, or isregularly traded on a national or regional basis;
(d) the company shall have earnings in three of the last five yearsprecedingthe date of acquisition;
(e) investments in common stock in any one corporation shall at notime exceed 2% of the admitted assets of the investinginsurance company determined on the basis of the cost of such shares tothe insurance company at time of purchase, and at no time shall aninsurance company purchasemore than 5% of the outstanding shares of stock of anyone given corporation;
(f) stock owned by an insurance company that is obligated under anunexpired written call option shall be valued at the lesser of thestriking price or current market value. For the purposes of thissubsection, "striking price" means the price per share, exclusive ofselling costs, the company would receive should the call option beexercised by the holder;
(g) the provisions of subsections (b) and (d) shall not apply, if at thetime of acquisition:
(1) The issuing corporation has net assets of $10,000,000 or more;
(2) the issuing corporation has a net worth of $1,000,000 or more; and
(3) the issuing corporation has an aggregate market value of $500,000,000 ormore.
History: L. 1972, ch. 173, § 8; L. 1978, ch. 172, § 1; L. 1983,ch. 156, § 1;L. 1987, ch. 160, § 4;L. 1995, ch. 22, § 1; July 1.
Article 2a.--INVESTMENTS BY OTHER THAN LIFE INSURANCE COMPANIES
40-2a08.Common stocks; call options.Any insurance company other than life heretofore or hereafter organizedunder any law of this state may invest by loans or otherwise, with thedirection or approval ofa majority of its board of directors or authorized committee thereof,any of its funds, or any part thereof in the common stock of anycorporation organized and doing business under the laws of the UnitedStates of America, or of any state, district, insular or territorialpossession thereof; or of the Dominion of Canada or any provincethereof; or of any other country or subdivision thereof; in an amount,based upon cost, not exceeding 15% of its admitted assets or not exceedingthe combined capital and surplus, whichever is the lesser, as shown by thecompany's last annual report as filed with the state commissioner ofinsurance or a more recent quarterly financial statement as filed with thecommissioner, on a form prescribed by the national association of insurancecommissioners, within 45 days following the end of the calendar quarter towhich the interim statement pertains. Such insurance company maywrite exchange traded, covered call options on shares it owns and maypurchase call options for the sole purpose of closing out a positiontaken previously with respect to one or more options having beenwritten. The purchase of a call option for any reason other than as aclosing transaction and the writing of naked (uncovered) call optionsare hereby prohibited. Investments in common stocks and the writing ofcall options shall be further limited as follows:
(a) The obligations, if any, shown on the lastpublished annual statement of such corporation must be eligible forinvestment under K.S.A. 40-2a05, andamendments thereto;
(b) cash dividends have been paid during each of the last threeyears preceding the date of acquisition;
(c) the stock is registered with a national securities exchangeregulated under the securities exchange act of 1934, as amended, or isregularly traded on a national or regional basis;
(d) the company shall have earnings in three of the last five yearsprecedingthe date of acquisition;
(e) investments in common stock in any one corporation shall at notime exceed 2% of the admitted assets of the investinginsurance company determined on the basis of the cost of such shares tothe insurance company at time of purchase, and at no time shall aninsurance company purchasemore than 5% of the outstanding shares of stock of anyone given corporation;
(f) stock owned by an insurance company that is obligated under anunexpired written call option shall be valued at the lesser of thestriking price or current market value. For the purposes of thissubsection, "striking price" means the price per share, exclusive ofselling costs, the company would receive should the call option beexercised by the holder;
(g) the provisions of subsections (b) and (d) shall not apply, if at thetime of acquisition:
(1) The issuing corporation has net assets of $10,000,000 or more;
(2) the issuing corporation has a net worth of $1,000,000 or more; and
(3) the issuing corporation has an aggregate market value of $500,000,000 ormore.
History: L. 1972, ch. 173, § 8; L. 1978, ch. 172, § 1; L. 1983,ch. 156, § 1;L. 1987, ch. 160, § 4;L. 1995, ch. 22, § 1; July 1.
