State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter7

CHAPTER 7 - INVESTMENTS

 

26-7-101. Scope of chapter.

 

Exceptas to W.S. 26-7-116, this chapter applies to domestic insurers only.

 

26-7-102. Definitions of terms used in chapter; determination of netearnings.

 

 

(a) As used in this chapter:

 

(i) "Fixed charges" means interest on funded andunfunded debt amortization of debt discount and rentals for leased properties;

 

(ii) "Institution" means corporations, joint-stockassociations and business trusts;

 

(iii) "Net earnings available for fixed charges" meansnet income after deducting operating and maintenance expenses, taxes, otherthan federal and state income taxes, depreciation and depletion, but excludingextraordinary nonrecurring items of income or expense appearing in the regularfinancial statements of the institutions involved;

 

(iv) "Obligations" means bonds, debentures, notes orother evidences of indebtedness.

 

(b) If net earnings are determined in reliance uponconsolidated earnings statements of parent and subsidiary institutions, thosenet earnings shall be determined after provision for income taxes ofsubsidiaries and after proper allowance for minority stock interest if any. Therequired coverage of fixed charges shall be computed on a basis including fixedcharges and preferred dividends of subsidiaries other than those payable by thesubsidiaries to the parent corporation or to any other of the subsidiaries,except that if the minority common stock interest in the subsidiary corporationis substantial, the fixed charges and preferred dividends may be apportioned inaccordance with regulations the commissioner prescribes.

 

26-7-103. Eligible investments.

 

 

(a) Insurers shall invest in or lend their funds on thesecurity of and shall hold as invested assets only eligible investmentsprescribed in this chapter.

 

(b) Any particular investment held by an insurer on January 1,1968, which was a legal investment at the time it was made, and which theinsurer was legally entitled to possess immediately prior to that date, is aneligible investment.

 

(c) Eligibility of an investment is determined as of the dateof its making or acquisition, except as stated in subsection (b) of thissection.

 

(d) Any investment limitation based upon the amount of theinsurer's assets or particular funds relates to those assets or funds as shownby the insurer's annual statement as of December 31 immediately preceding thedate of the insurer's acquisition of the investment, or as shown by a currentfinancial statement resulting from merger of another insurer, bulk reinsuranceor change in capitalization.

 

(e) An insurer authorized to transact insurance in a foreigncountry may make investments, in aggregate amount not exceeding its deposit andreserve obligations incurred in that country, in securities of or in thatcountry possessing characteristics and of a quality similar to like investmentsin the United States.

 

26-7-104. General qualifications for investments.

 

(a) No security or investment, other than property acquiredunder W.S. 26-7-107(a)(xiii), is eligible for acquisition unless it is interestbearing or interest accruing or dividend or income paying, is not then indefault and the insurer is entitled to receive for its exclusive account andbenefit the interest or income accruing thereon. Any stock which has theability to appreciate in value shall be considered to be income paying forpurposes of this subsection.

 

(b) No security or investment is eligible for purchase at aprice above its market value.

 

(c) Nothing in this chapter prohibits an insurer from acquiringother or additional securities or property if received as a dividend or as alawful distribution of assets, or under a lawful and bona fide agreement ofbulk reinsurance, merger or consolidation. Any investment so acquired which isnot otherwise eligible under this chapter shall be disposed of pursuant to W.S.26-7-112 if real property, or pursuant to W.S. 26-7-113 if personal property orsecurities.

 

26-7-105. Investment authorization; record.

 

 

(a) No insurer shall make any investment or loan, other than apolicy loan or an annuity contract loan of a life insurer, unless theinvestment or loan is authorized by the insurer's board of directors or by acommittee authorized by the board and charged with the supervision or making ofthe investment or loan. The minutes of any such committee shall be recorded andregular reports of the committee shall be submitted to the board of directors.

 

(b) The insurer shall maintain a full record of eachinvestment, showing, among other pertinent information, the name of anyofficer, director or principal stockholder of the insurer having any interestin the securities, loan or property constituting the investment, or in theperson in whose behalf the investment is made, and the nature of the interest.

 

26-7-106. Diversification of and limits on investments.

 

 

(a) An insurer shall invest in or hold as admitted assets onlycategories of investments within applicable limits as follows:

 

(i) No insurer shall have at any time any combination ofinvestments in or loans upon the security of the obligations, property orsecurities of any one (1) person, institution, corporation or municipalcorporation aggregating an amount exceeding five percent (5%) of the insurer'sassets, except this does not apply to general obligations of the United Statesof America or of any state or include policy loans made under W.S. 26-7-108;

 

(ii) No insurer shall invest in or hold at any time more thanten percent (10%) of the outstanding voting stock of any corporation, exceptwith respect to voting rights of preference stock during default of dividends,except this does not apply to stock of an insurer's subsidiary acquired underW.S. 26-7-107(a)(vii) or (xiv), or to controlling stock of an insurer acquiredunder W.S. 26-7-107(a)(vi);

 

(iii) An insurer, other than a title insurer, shall invest andmaintain invested funds not less in amount than the minimum paid-in capitalstock required under this code of a domestic stock insurer transacting likekinds of insurance, only in cash and the securities provided under W.S.26-7-107(a)(i) and 26-7-107(a)(xii);

 

(iv) A life insurer shall also invest and keep invested itsfunds, in an amount not less than the reserves under its life insurancepolicies and annuity contracts in force, in cash or the securities or investmentsallowed under this chapter, other than in common stocks, insurance stocks andstocks of the insurer's subsidiaries;

 

(v) No life insurer shall invest and have invested at any timein aggregate amount more than seven percent (7%) of its assets in all stocksunder W.S. 26-7-107(a)(iv), (v), (vi) and (viii), except this does not apply tostock of a controlled or subsidiary corporation under W.S. 26-7-107(a)(vi),(vii) and (xiv);

 

(vi) No insurer shall have invested at any time more thansixty-five percent (65%) of its assets in obligations secured by mortgage,trust deed, contract of purchase or other similar encumbrance of real property;

 

(vii) No insurer shall have invested at any time more than sevenpercent (7%) of its assets in either improvement district obligations orequipment trust certificates;

 

(viii) Investments in real property are limited as provided inW.S. 26-7-107(a)(xiii); and

 

(ix) Other specific limits apply as stated in the sectionsdealing with other kinds of investments.

 

26-7-107. Authorized investments.

 

(a) An insurer may invest in:

 

(i) Bonds or other evidences of indebtedness, not in default asto principal or interest, which are valid and legally authorized obligationsissued, assumed or guaranteed by the United States or Canada or by any state,territory, possession or province thereof, or by any county, city, town,village, municipality or other political subdivision or public instrumentalityof one (1) or more of the governmental units specified, if, by statutory orother legal requirements applicable thereto, the obligations are payable as toboth principal and interest from:

 

(A) Taxes levied or required to be levied upon all taxableproperty or all taxable income within the jurisdiction of the governmental unit;or

 

(B) Adequate special revenues pledged or otherwise appropriatedor by law required to be provided for that payment, but not including anyobligation payable solely out of special assessments on properties benefited bylocal improvements unless adequate security is evidenced by the ratio ofassessment to the value of the property or the obligation is additionallysecured by an adequate guaranty fund required by law.

 

(ii) The obligations and stock if stated, issued, assumed orguaranteed by the following agencies of the United States government, or inwhich that government is a participant, whether or not it guarantees theobligations:

 

(A) Commodity credit corporation;

 

(B) Federal intermediate credit banks;

 

(C) Federal land banks;

 

(D) Banks for cooperatives;

 

(E) Federal home loan banks, and stock thereof;

 

(F) Federal national mortgage association and stock thereofwhen acquired in connection with sale of mortgage loans to the association;

 

(G) International bank for reconstruction and development;

 

(H) Inter-American development bank;

 

(J) Any other similar agency of, or participated in by, theUnited States government and of similar financial quality.

 

(iii) Obligations other than those eligible for investment underW.S. 26-7-107(a)(xii) if they are issued, assumed or guaranteed by any solventinstitution created or existing under the laws of the United States or Canadaor of any state, district, territory or province thereof, and are qualifiedunder any of the following:

 

(A) Obligations which are secured by adequate collateralsecurity and bear fixed interest if during each of any three (3), including thelast two (2), of the five (5) fiscal years immediately preceding the date ofthe insurer's acquisition, the net earnings of the issuing, assuming orguaranteeing institution available for its fixed charges, as defined in W.S.26-7-102, have been not less than one and one-fourth (1 1/4) times the total ofits fixed charges for that year. In determining the adequacy of collateralsecurity not more than one-third (1/3) of the total value of the requiredcollateral shall consist of stock other than stock meeting the requirements ofW.S. 26-7-107(a)(iv);

 

(B) Fixed interest-bearing obligations, other than thosedescribed in subparagraph (a)(iii)(A) of this section, if the net earnings ofthe issuing, assuming or guaranteeing institution available for its fixedcharges for a period of five (5) fiscal years immediately preceding the date ofthe insurer's acquisition have averaged per year not less than one and one-half(1 1/2) times its average annual fixed charges applicable to that period and ifduring the last year of that period the net earnings have been not less thanone and one-half (1 1/2) times its fixed charges for that year;

 

(C) Adjustment, income or other contingent interest obligationsif the net earnings of the issuing, assuming or guaranteeing institutionavailable for its fixed charges for a period of five (5) fiscal yearsimmediately preceding the date of the insurer's acquisition have averaged peryear not less than one and one-half (1 1/2) times the sum of its average annualfixed charges and its average annual maximum contingent interest applicable tothat period and if during each of the last two (2) years of that period the netearnings have been not less than one and one-half (1 1/2) times the sum of itsfixed charges and maximum contingent interest for each year.

 

(iv) Preferred or guaranteed stocks or shares of any solventinstitution existing under the laws of the United States or of Canada, or ofany state or province thereof, if all of the prior obligations and priorpreferred stocks, if any, of the institution at the date of the insurer'sacquisition of the investment are eligible as investments under this chapterand if the net earnings of the institution available for its fixed chargesduring each of the last two (2) years have been, and during each of the lastfive (5) years have averaged, not less than one and one-half (1 1/2) times thesum of its average annual fixed charges, if any, its average annual maximumcontingent interest, if any, and its average annual preferred dividendrequirements. For the purposes of this paragraph the computation shall refer tothe fiscal years immediately preceding the date of the insurer's acquisition ofthe investment, and the term "preferred dividend requirement" meanscumulative or noncumulative dividends, whether paid or not;

 

(v) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of the UnitedStates or Canada, or of any state or province thereof, if the corporation hashad net earnings available for dividends on its stock in each of the five (5)fiscal years immediately preceding the insurer's investment therein. If theissuing corporation has not been in legal existence for the whole of the five(5) fiscal years but was formed as a consolidation or merger of two (2) or morebusinesses of which at least one (1) was in operation on a date five (5) yearsprior to the investment, the test of eligibility of its common stock under thisparagraph shall be based upon consolidated pro forma statements of thepredecessor or constituent institutions;

 

(vi) Stocks of other solvent insurers formed under the laws ofthis or another state, which stocks meet the applicable requirements of W.S.26-7-107(a)(iv) and 26-7-107(a)(v). With the commissioner's advance writtenconsent an insurer may acquire and hold the controlling interest in theoutstanding voting stock of another stock insurer formed under the laws of thisor another state, which stocks are limited as to amount as provided in W.S.26-7-107(a)(vii). The commissioner shall not give his consent to any suchacquisition if he finds it is not in the best interests of the insurersinvolved or of their policyholders or stockholders, or that the acquisitionwould materially tend to result in any monopoly in the insurance business;

 

(vii) Stock of a subsidiary insurance corporation it forms. Allof the insurer's investments under this paragraph, together with itsinvestments in insurance stocks under W.S. 26-7-107(a)(vi), shall not at anytime exceed the amount of the investing insurer's surplus, if a life insurer,or its surplus to policyholders if other than a life insurer;

 

(viii) A bank's common trust fund as defined in section 584 of theUnited States Internal Revenue Code of 1954;

 

(ix) The securities of any open-end management type investmentcompany or investment trust registered with the federal securities and exchangecommission under the Investment Company Act of 1940 as from time to timeamended, if the investment company or trust has assets of not less thantwenty-five million dollars ($25,000,000.00) on the date of the insurer'sinvestment;

 

(x) Equipment trust obligations or certificates adequatelysecured and evidencing an interest in transportation equipment, wholly or inpart within the United States of America, which obligations or certificatescarry the right to receive determined portions of rental, purchase or otherfixed obligatory payments to be made for the use or purchase of thetransportation equipment;

 

(xi) Share accounts, savings accounts of savings and loanassociations or building and loan associations or in the savings accounts ofbanks;

 

(xii) First liens upon improved real property located in this orany other state or in Canada, subject to the following conditions:

 

(A) For liens on single family residence property the amountloaned shall not exceed seventy-five percent (75%) of the fair value of theproperty, and the loan shall be amortized within not more than thirty (30)years by payment of installments thereon at regular intervals not less frequentthan every three (3) months;

 

(B) For liens on other improved real property the amount loanedshall not exceed sixty-six and two-thirds percent (66 2/3%) of the fair valueof the property;

 

(C) No loan shall be made or acquired by the insurer unless thefair value of the property has been determined, for the purposes of the loan,by a qualified independent appraiser;

 

(D) In applying the limitations provided in subparagraphs (A)and (B) of this paragraph, the amount in which the loan is guaranteed by theadministrator of veteran's affairs or insured by the federal housingadministration or other United States or Canadian government agency may beexcluded from the amount of the loan;

 

(E) Insurance not less comprehensive than fire and extendedcoverage shall be carried on the improvements on the property in an amount notless than the insurable value of the improvements, or the amount of the loan,whichever is less, and the policy evidencing the insurance endorsed to show theinterest of the mortgagee. "Improved real property" means all farmlands used for tillage, crop, other than timber, or pasture, and all realproperty on which permanent improvements, installations or structures suitablefor residence or construction of residences, or for commercial or industrialuse, are situated;

 

(F) Subparagraphs (A), (B) and (C) of this paragraph do notapply to purchase money mortgages taken by the insurer upon sale of propertytheretofore owned by it and covering the real property. No such mortgage shallbe for an amount exceeding the original unpaid balance of the purchase price.

 

(xiii) Real property as follows:

 

(A) The land and the buildings thereon occupied by it as itsprincipal office and any other real property necessary in the transaction ofits business, provided the amount so invested and apportioned as to spaceactually so occupied shall not aggregate more than fifteen percent (15%) of theinsurer's assets;

 

(B) Acquired in satisfaction of loans, mortgages, liens,judgments, decrees or debts previously owing to the insurer in the course ofits business;

 

(C) Acquired in part payment of the consideration of the saleof other real property it owns, if the transaction effects a net reduction inthe insurer's investments in real property;

 

(D) Acquired by gift or devise or through merger, consolidationor bulk reinsurance of another insurer under this code;

 

(E) The seller's interest in real property subject to anagreement of purchase or sale, but the sum invested in the seller's interestshall not exceed two-thirds (2/3) of the fair value of the property;

 

(F) Improved real property, or any interest therein acquired orheld by purchase, lease or otherwise, other than real property to be usedprimarily for agricultural, ranch, mining, development of oil or mineralresources, recreational, amusement, hotel, motel or club purposes, acquired asan investment for the production of income or acquired to be improved ordeveloped for such investment purposes pursuant to an existing programtherefor. The insurer may hold, improve, develop, maintain, manage, lease, selland convey real property it acquires under this provision. An insurer shall nothave at any time invested in real property under this subparagraph an amountexceeding fifteen percent (15%) of its assets. An investment in any singleparcel of real estate acquired under this subparagraph after March 1, 1975,shall not exceed four percent (4%) of the company's assets;

 

(G) Additional real property and equipment incident to realproperty, if necessary or convenient for the purpose of enhancing the sale orother value of real property previously acquired or held under subparagraphs(B), (C), (D) or (F) of this paragraph. The real property and equipment shallbe included, together with the real property for the enhancement of which itwas acquired, for the purpose of applicable investment limits, and is subjectto disposal at the same time and under the same conditions applying to theenhanced real property under W.S. 26-7-112;

 

(H) All real property owned by the insurer under this section,except as to seller's interest specified in subparagraph (E) of this paragraph,shall not at any time exceed thirty percent (30%) of the insurer's assets.

 

(xiv) Common stock, preferred stock, debt obligations, and othersecurities of one (1) or more subsidiary business corporations formed under thelaws of this state and necessary and incidental to the insurer's insurancebusiness or to the administration of any of its investments. The amount of theinvestment is governed by W.S. 26-44-102(b);

 

(xv) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of any foreigncountry, any such investment to be subject to the limitations of W.S. 26-7-106.At any one time, the aggregate amount of foreign investments shall not exceedtwenty percent (20%) of the insurer's admitted assets.

 

26-7-108. Policy loans.

 

Alife insurer may lend to its policyholder upon pledge of the policy ascollateral security any sum not exceeding the cash surrender value of thepolicy, or may lend against pledge or assignment of any of its supplementarycontracts or other contracts or obligations if the loan is adequately securedby the pledge or assignment. Loans so made are eligible investments of theinsurer.

 

26-7-109. Collateral loans.

 

Aninsurer may lend and thereby invest its funds upon the pledge of securitieseligible for investment under this chapter. As of the date made, no such loanshall exceed in amount ninety percent (90%) of the market value of thecollateral pledged. The amount loaned shall be included pro rata in determiningthe maximum percentage of funds permitted under this chapter to be invested inthe categories of securities so pledged.

 

26-7-110. Miscellaneous loans and investments.

 

(a) An insurer may make loans or investments not otherwiseexpressly permitted under this chapter, in aggregate amounts not over fivepercent (5%) of the insurer's assets and not over one percent (1%) of thoseassets as to any one loan or investment, if the loan or investment fulfills therequirements of W.S. 26-7-103 and otherwise qualifies as a sound investment. Nosuch loan or investment shall be represented by:

 

(i) Any item excluded under W.S. 26-6-102 or any loan orinvestment otherwise expressly prohibited;

 

(ii) Agents' balances or amounts advanced to or owing by agents,except as to policy loans, mortgage loans and collateral loans otherwiseauthorized under this chapter;

 

(iii) Any category of loans or investments expressly eligibleunder any other provisions of this chapter;

 

(iv) Any asset theretofore acquired or held by the insurer underany other category of loans or investments eligible under this chapter.

 

(b) An insurer may make loans to industrial developmentcorporations under the laws of this state in an amount not exceeding the limitsset forth in W.S. 17-11-106(b)(iii).

 

(c) The insurer shall keep a separate record of all loans andinvestments made under this section.

 

26-7-111. Security interest in chattels.

 

 

(a) In connection with a mortgage loan on the security of realproperty designed and used primarily for residential purposes only, whichmortgage loan was acquired pursuant to W.S. 26-7-107(a)(xii), an insurer maylend or invest an amount, not exceeding twenty percent (20%) of the amountloaned on or invested in the real property mortgage, on the security ofchattels, to be amortized by regular payments within a term of not more thanfive (5) years, and representing a first and prior lien, except for taxes notthen delinquent, on personal property constituting durable equipment and ownedby the mortgagor and kept and used in the mortgaged premises.

 

(b) For the purposes of this section, "durableequipment" includes only mechanical refrigerators, air conditioningequipment, mechanical laundering machines, heating and cooking stoves andranges, and in the case of apartment houses, motels and hotels, room furnitureand furnishings also.

 

(c) Prior to the acquisition of a chattel mortgage under thissection, items of property to be included therein shall be separately appraisedby a qualified appraiser and the fair market value thereof determined. Nochattel loan shall exceed in amount the same ratio of loan to the value of theproperty as is applicable to the companion loan on the real property.

 

(d) This section does not prohibit an insurer from taking lienson personal property as additional security for any investment otherwiseeligible under this chapter.

 

26-7-112. Security interest in chattels; time limit for disposal.

 

 

(a) Except as stated in subsection (b) of this section, theinsurer shall dispose of real property acquired under W.S. 26-7-107(a)(xiii)(A)within five (5) years after it ceases to be necessary to the insurer in thetransaction of its business and real property acquired under W.S.26-7-107(a)(xiii)(B), (C) and (D) within five (5) years after the date ofacquisition.

 

(b) Upon satisfactory proof that the insurer's interests willsuffer materially by the forced sale of real property, the commissioner, byorder, may grant a reasonable extension of the period within which the insurershall dispose of any particular parcel of real property, unless the insurerelects to hold the real property as an investment for income purposes underW.S. 26-7-107(a)(xiii)(F), in which case thereafter the real property is deemedto have been acquired at a cost equal to its book value at the time of theelection and to be held under and subject to that subparagraph.

 

26-7-113. Disposal of ineligible investments; time limit for disposal.

 

Anypersonal property or securities lawfully acquired by an insurer which it couldnot otherwise have invested in or loaned its funds upon at the time of theacquisition, shall be disposed of within three (3) years from date ofacquisition unless within that period the security becomes an eligibleinvestment, except that any security or personal property acquired under anyagreement of bulk reinsurance, merger or consolidation may be retained for alonger period if so provided in the plan for reinsurance, merger orconsolidation as the commissioner approves under chapter 24 of this code. Uponthe insurer's application and proof that forced sale of any such property orsecurity would materially injure its interests, the commissioner may extend thedisposal period for an additional reasonable time.

 

26-7-114. Disposal of ineligible investments; failure to dispose;disposal of ineligible investments unlawfully acquired.

 

 

(a) Any real property, personal property or securities lawfullyacquired and held by an insurer after expiration of the period for disposalthereof or any extension of that period as provided in W.S. 26-7-107(a)(vi) or26-7-107(a)(vii), shall not be allowed as an insurer's asset.

 

(b) An insurer shall immediately dispose of any ineligibleinvestment unlawfully acquired. The commissioner shall suspend or revoke theinsurer's certificate of authority if the insurer fails to dispose of theinvestment within any reasonable time the commissioner, by order, specifies.

 

26-7-115. Prohibited investments; securities underwriting prohibited.

 

 

(a) In addition to investments excluded pursuant to otherprovisions of this code, an insurer shall not invest in or lend its funds uponthe security of:

 

(i) Issued shares of its own capital stock, except for thepurpose of mutualization under W.S. 26-24-143;

 

(ii) Securities issued by any corporation or enterprise thecontrolling interest of which is or after the insurer's acquisition will beheld by the insurer or any combination of the insurer and the insurer'sdirectors, officers, parent corporation, subsidiaries or controllingstockholders and the spouses and children of any of them. Investments incontrolled insurance corporations or subsidiaries under W.S. 26-7-107(a)(vi),(vii) or (xiv) are not subject to this provision;

 

(iii) Any note or other evidence of indebtedness of any director,officer, employee or controlling stockholder of the insurer or of the spouse orchild of any of them, except as to policy loans authorized under W.S. 26-7-108.

 

(b) No insurer shall underwrite or participate in theunderwriting of an offering of securities or property by any other person.

 

26-7-116. Investments of foreign insurers.

 

Theinvestment portfolio of a foreign or alien insurer shall be as permitted by thelaws of its domicile if of a quality substantially equal to that required underthis chapter for similar funds of like domestic insurers. In determining therelative quality and value of the investment portfolio of a foreign or alieninsurer, the commissioner, for purposes of comparison, may apply the provisionsof this code regulating investments of domestic insurers and valuation of thoseinsurers. If the commissioner determines that the investment portfolio of aforeign or alien insurer is not of a quality substantially equal to thatrequired under this chapter for similar funds of like domestic insurers, he mayrefuse to continue or may suspend or revoke an insurer's certificate ofauthority in accordance with W.S. 26-3-115.

 

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter7

CHAPTER 7 - INVESTMENTS

 

26-7-101. Scope of chapter.

 

Exceptas to W.S. 26-7-116, this chapter applies to domestic insurers only.

 

26-7-102. Definitions of terms used in chapter; determination of netearnings.

 

 

(a) As used in this chapter:

 

(i) "Fixed charges" means interest on funded andunfunded debt amortization of debt discount and rentals for leased properties;

 

(ii) "Institution" means corporations, joint-stockassociations and business trusts;

 

(iii) "Net earnings available for fixed charges" meansnet income after deducting operating and maintenance expenses, taxes, otherthan federal and state income taxes, depreciation and depletion, but excludingextraordinary nonrecurring items of income or expense appearing in the regularfinancial statements of the institutions involved;

 

(iv) "Obligations" means bonds, debentures, notes orother evidences of indebtedness.

 

(b) If net earnings are determined in reliance uponconsolidated earnings statements of parent and subsidiary institutions, thosenet earnings shall be determined after provision for income taxes ofsubsidiaries and after proper allowance for minority stock interest if any. Therequired coverage of fixed charges shall be computed on a basis including fixedcharges and preferred dividends of subsidiaries other than those payable by thesubsidiaries to the parent corporation or to any other of the subsidiaries,except that if the minority common stock interest in the subsidiary corporationis substantial, the fixed charges and preferred dividends may be apportioned inaccordance with regulations the commissioner prescribes.

 

26-7-103. Eligible investments.

 

 

(a) Insurers shall invest in or lend their funds on thesecurity of and shall hold as invested assets only eligible investmentsprescribed in this chapter.

 

(b) Any particular investment held by an insurer on January 1,1968, which was a legal investment at the time it was made, and which theinsurer was legally entitled to possess immediately prior to that date, is aneligible investment.

 

(c) Eligibility of an investment is determined as of the dateof its making or acquisition, except as stated in subsection (b) of thissection.

 

(d) Any investment limitation based upon the amount of theinsurer's assets or particular funds relates to those assets or funds as shownby the insurer's annual statement as of December 31 immediately preceding thedate of the insurer's acquisition of the investment, or as shown by a currentfinancial statement resulting from merger of another insurer, bulk reinsuranceor change in capitalization.

 

(e) An insurer authorized to transact insurance in a foreigncountry may make investments, in aggregate amount not exceeding its deposit andreserve obligations incurred in that country, in securities of or in thatcountry possessing characteristics and of a quality similar to like investmentsin the United States.

 

26-7-104. General qualifications for investments.

 

(a) No security or investment, other than property acquiredunder W.S. 26-7-107(a)(xiii), is eligible for acquisition unless it is interestbearing or interest accruing or dividend or income paying, is not then indefault and the insurer is entitled to receive for its exclusive account andbenefit the interest or income accruing thereon. Any stock which has theability to appreciate in value shall be considered to be income paying forpurposes of this subsection.

 

(b) No security or investment is eligible for purchase at aprice above its market value.

 

(c) Nothing in this chapter prohibits an insurer from acquiringother or additional securities or property if received as a dividend or as alawful distribution of assets, or under a lawful and bona fide agreement ofbulk reinsurance, merger or consolidation. Any investment so acquired which isnot otherwise eligible under this chapter shall be disposed of pursuant to W.S.26-7-112 if real property, or pursuant to W.S. 26-7-113 if personal property orsecurities.

 

26-7-105. Investment authorization; record.

 

 

(a) No insurer shall make any investment or loan, other than apolicy loan or an annuity contract loan of a life insurer, unless theinvestment or loan is authorized by the insurer's board of directors or by acommittee authorized by the board and charged with the supervision or making ofthe investment or loan. The minutes of any such committee shall be recorded andregular reports of the committee shall be submitted to the board of directors.

 

(b) The insurer shall maintain a full record of eachinvestment, showing, among other pertinent information, the name of anyofficer, director or principal stockholder of the insurer having any interestin the securities, loan or property constituting the investment, or in theperson in whose behalf the investment is made, and the nature of the interest.

 

26-7-106. Diversification of and limits on investments.

 

 

(a) An insurer shall invest in or hold as admitted assets onlycategories of investments within applicable limits as follows:

 

(i) No insurer shall have at any time any combination ofinvestments in or loans upon the security of the obligations, property orsecurities of any one (1) person, institution, corporation or municipalcorporation aggregating an amount exceeding five percent (5%) of the insurer'sassets, except this does not apply to general obligations of the United Statesof America or of any state or include policy loans made under W.S. 26-7-108;

 

(ii) No insurer shall invest in or hold at any time more thanten percent (10%) of the outstanding voting stock of any corporation, exceptwith respect to voting rights of preference stock during default of dividends,except this does not apply to stock of an insurer's subsidiary acquired underW.S. 26-7-107(a)(vii) or (xiv), or to controlling stock of an insurer acquiredunder W.S. 26-7-107(a)(vi);

 

(iii) An insurer, other than a title insurer, shall invest andmaintain invested funds not less in amount than the minimum paid-in capitalstock required under this code of a domestic stock insurer transacting likekinds of insurance, only in cash and the securities provided under W.S.26-7-107(a)(i) and 26-7-107(a)(xii);

 

(iv) A life insurer shall also invest and keep invested itsfunds, in an amount not less than the reserves under its life insurancepolicies and annuity contracts in force, in cash or the securities or investmentsallowed under this chapter, other than in common stocks, insurance stocks andstocks of the insurer's subsidiaries;

 

(v) No life insurer shall invest and have invested at any timein aggregate amount more than seven percent (7%) of its assets in all stocksunder W.S. 26-7-107(a)(iv), (v), (vi) and (viii), except this does not apply tostock of a controlled or subsidiary corporation under W.S. 26-7-107(a)(vi),(vii) and (xiv);

 

(vi) No insurer shall have invested at any time more thansixty-five percent (65%) of its assets in obligations secured by mortgage,trust deed, contract of purchase or other similar encumbrance of real property;

 

(vii) No insurer shall have invested at any time more than sevenpercent (7%) of its assets in either improvement district obligations orequipment trust certificates;

 

(viii) Investments in real property are limited as provided inW.S. 26-7-107(a)(xiii); and

 

(ix) Other specific limits apply as stated in the sectionsdealing with other kinds of investments.

 

26-7-107. Authorized investments.

 

(a) An insurer may invest in:

 

(i) Bonds or other evidences of indebtedness, not in default asto principal or interest, which are valid and legally authorized obligationsissued, assumed or guaranteed by the United States or Canada or by any state,territory, possession or province thereof, or by any county, city, town,village, municipality or other political subdivision or public instrumentalityof one (1) or more of the governmental units specified, if, by statutory orother legal requirements applicable thereto, the obligations are payable as toboth principal and interest from:

 

(A) Taxes levied or required to be levied upon all taxableproperty or all taxable income within the jurisdiction of the governmental unit;or

 

(B) Adequate special revenues pledged or otherwise appropriatedor by law required to be provided for that payment, but not including anyobligation payable solely out of special assessments on properties benefited bylocal improvements unless adequate security is evidenced by the ratio ofassessment to the value of the property or the obligation is additionallysecured by an adequate guaranty fund required by law.

 

(ii) The obligations and stock if stated, issued, assumed orguaranteed by the following agencies of the United States government, or inwhich that government is a participant, whether or not it guarantees theobligations:

 

(A) Commodity credit corporation;

 

(B) Federal intermediate credit banks;

 

(C) Federal land banks;

 

(D) Banks for cooperatives;

 

(E) Federal home loan banks, and stock thereof;

 

(F) Federal national mortgage association and stock thereofwhen acquired in connection with sale of mortgage loans to the association;

 

(G) International bank for reconstruction and development;

 

(H) Inter-American development bank;

 

(J) Any other similar agency of, or participated in by, theUnited States government and of similar financial quality.

 

(iii) Obligations other than those eligible for investment underW.S. 26-7-107(a)(xii) if they are issued, assumed or guaranteed by any solventinstitution created or existing under the laws of the United States or Canadaor of any state, district, territory or province thereof, and are qualifiedunder any of the following:

 

(A) Obligations which are secured by adequate collateralsecurity and bear fixed interest if during each of any three (3), including thelast two (2), of the five (5) fiscal years immediately preceding the date ofthe insurer's acquisition, the net earnings of the issuing, assuming orguaranteeing institution available for its fixed charges, as defined in W.S.26-7-102, have been not less than one and one-fourth (1 1/4) times the total ofits fixed charges for that year. In determining the adequacy of collateralsecurity not more than one-third (1/3) of the total value of the requiredcollateral shall consist of stock other than stock meeting the requirements ofW.S. 26-7-107(a)(iv);

 

(B) Fixed interest-bearing obligations, other than thosedescribed in subparagraph (a)(iii)(A) of this section, if the net earnings ofthe issuing, assuming or guaranteeing institution available for its fixedcharges for a period of five (5) fiscal years immediately preceding the date ofthe insurer's acquisition have averaged per year not less than one and one-half(1 1/2) times its average annual fixed charges applicable to that period and ifduring the last year of that period the net earnings have been not less thanone and one-half (1 1/2) times its fixed charges for that year;

 

(C) Adjustment, income or other contingent interest obligationsif the net earnings of the issuing, assuming or guaranteeing institutionavailable for its fixed charges for a period of five (5) fiscal yearsimmediately preceding the date of the insurer's acquisition have averaged peryear not less than one and one-half (1 1/2) times the sum of its average annualfixed charges and its average annual maximum contingent interest applicable tothat period and if during each of the last two (2) years of that period the netearnings have been not less than one and one-half (1 1/2) times the sum of itsfixed charges and maximum contingent interest for each year.

 

(iv) Preferred or guaranteed stocks or shares of any solventinstitution existing under the laws of the United States or of Canada, or ofany state or province thereof, if all of the prior obligations and priorpreferred stocks, if any, of the institution at the date of the insurer'sacquisition of the investment are eligible as investments under this chapterand if the net earnings of the institution available for its fixed chargesduring each of the last two (2) years have been, and during each of the lastfive (5) years have averaged, not less than one and one-half (1 1/2) times thesum of its average annual fixed charges, if any, its average annual maximumcontingent interest, if any, and its average annual preferred dividendrequirements. For the purposes of this paragraph the computation shall refer tothe fiscal years immediately preceding the date of the insurer's acquisition ofthe investment, and the term "preferred dividend requirement" meanscumulative or noncumulative dividends, whether paid or not;

 

(v) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of the UnitedStates or Canada, or of any state or province thereof, if the corporation hashad net earnings available for dividends on its stock in each of the five (5)fiscal years immediately preceding the insurer's investment therein. If theissuing corporation has not been in legal existence for the whole of the five(5) fiscal years but was formed as a consolidation or merger of two (2) or morebusinesses of which at least one (1) was in operation on a date five (5) yearsprior to the investment, the test of eligibility of its common stock under thisparagraph shall be based upon consolidated pro forma statements of thepredecessor or constituent institutions;

 

(vi) Stocks of other solvent insurers formed under the laws ofthis or another state, which stocks meet the applicable requirements of W.S.26-7-107(a)(iv) and 26-7-107(a)(v). With the commissioner's advance writtenconsent an insurer may acquire and hold the controlling interest in theoutstanding voting stock of another stock insurer formed under the laws of thisor another state, which stocks are limited as to amount as provided in W.S.26-7-107(a)(vii). The commissioner shall not give his consent to any suchacquisition if he finds it is not in the best interests of the insurersinvolved or of their policyholders or stockholders, or that the acquisitionwould materially tend to result in any monopoly in the insurance business;

 

(vii) Stock of a subsidiary insurance corporation it forms. Allof the insurer's investments under this paragraph, together with itsinvestments in insurance stocks under W.S. 26-7-107(a)(vi), shall not at anytime exceed the amount of the investing insurer's surplus, if a life insurer,or its surplus to policyholders if other than a life insurer;

 

(viii) A bank's common trust fund as defined in section 584 of theUnited States Internal Revenue Code of 1954;

 

(ix) The securities of any open-end management type investmentcompany or investment trust registered with the federal securities and exchangecommission under the Investment Company Act of 1940 as from time to timeamended, if the investment company or trust has assets of not less thantwenty-five million dollars ($25,000,000.00) on the date of the insurer'sinvestment;

 

(x) Equipment trust obligations or certificates adequatelysecured and evidencing an interest in transportation equipment, wholly or inpart within the United States of America, which obligations or certificatescarry the right to receive determined portions of rental, purchase or otherfixed obligatory payments to be made for the use or purchase of thetransportation equipment;

 

(xi) Share accounts, savings accounts of savings and loanassociations or building and loan associations or in the savings accounts ofbanks;

 

(xii) First liens upon improved real property located in this orany other state or in Canada, subject to the following conditions:

 

(A) For liens on single family residence property the amountloaned shall not exceed seventy-five percent (75%) of the fair value of theproperty, and the loan shall be amortized within not more than thirty (30)years by payment of installments thereon at regular intervals not less frequentthan every three (3) months;

 

(B) For liens on other improved real property the amount loanedshall not exceed sixty-six and two-thirds percent (66 2/3%) of the fair valueof the property;

 

(C) No loan shall be made or acquired by the insurer unless thefair value of the property has been determined, for the purposes of the loan,by a qualified independent appraiser;

 

(D) In applying the limitations provided in subparagraphs (A)and (B) of this paragraph, the amount in which the loan is guaranteed by theadministrator of veteran's affairs or insured by the federal housingadministration or other United States or Canadian government agency may beexcluded from the amount of the loan;

 

(E) Insurance not less comprehensive than fire and extendedcoverage shall be carried on the improvements on the property in an amount notless than the insurable value of the improvements, or the amount of the loan,whichever is less, and the policy evidencing the insurance endorsed to show theinterest of the mortgagee. "Improved real property" means all farmlands used for tillage, crop, other than timber, or pasture, and all realproperty on which permanent improvements, installations or structures suitablefor residence or construction of residences, or for commercial or industrialuse, are situated;

 

(F) Subparagraphs (A), (B) and (C) of this paragraph do notapply to purchase money mortgages taken by the insurer upon sale of propertytheretofore owned by it and covering the real property. No such mortgage shallbe for an amount exceeding the original unpaid balance of the purchase price.

 

(xiii) Real property as follows:

 

(A) The land and the buildings thereon occupied by it as itsprincipal office and any other real property necessary in the transaction ofits business, provided the amount so invested and apportioned as to spaceactually so occupied shall not aggregate more than fifteen percent (15%) of theinsurer's assets;

 

(B) Acquired in satisfaction of loans, mortgages, liens,judgments, decrees or debts previously owing to the insurer in the course ofits business;

 

(C) Acquired in part payment of the consideration of the saleof other real property it owns, if the transaction effects a net reduction inthe insurer's investments in real property;

 

(D) Acquired by gift or devise or through merger, consolidationor bulk reinsurance of another insurer under this code;

 

(E) The seller's interest in real property subject to anagreement of purchase or sale, but the sum invested in the seller's interestshall not exceed two-thirds (2/3) of the fair value of the property;

 

(F) Improved real property, or any interest therein acquired orheld by purchase, lease or otherwise, other than real property to be usedprimarily for agricultural, ranch, mining, development of oil or mineralresources, recreational, amusement, hotel, motel or club purposes, acquired asan investment for the production of income or acquired to be improved ordeveloped for such investment purposes pursuant to an existing programtherefor. The insurer may hold, improve, develop, maintain, manage, lease, selland convey real property it acquires under this provision. An insurer shall nothave at any time invested in real property under this subparagraph an amountexceeding fifteen percent (15%) of its assets. An investment in any singleparcel of real estate acquired under this subparagraph after March 1, 1975,shall not exceed four percent (4%) of the company's assets;

 

(G) Additional real property and equipment incident to realproperty, if necessary or convenient for the purpose of enhancing the sale orother value of real property previously acquired or held under subparagraphs(B), (C), (D) or (F) of this paragraph. The real property and equipment shallbe included, together with the real property for the enhancement of which itwas acquired, for the purpose of applicable investment limits, and is subjectto disposal at the same time and under the same conditions applying to theenhanced real property under W.S. 26-7-112;

 

(H) All real property owned by the insurer under this section,except as to seller's interest specified in subparagraph (E) of this paragraph,shall not at any time exceed thirty percent (30%) of the insurer's assets.

 

(xiv) Common stock, preferred stock, debt obligations, and othersecurities of one (1) or more subsidiary business corporations formed under thelaws of this state and necessary and incidental to the insurer's insurancebusiness or to the administration of any of its investments. The amount of theinvestment is governed by W.S. 26-44-102(b);

 

(xv) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of any foreigncountry, any such investment to be subject to the limitations of W.S. 26-7-106.At any one time, the aggregate amount of foreign investments shall not exceedtwenty percent (20%) of the insurer's admitted assets.

 

26-7-108. Policy loans.

 

Alife insurer may lend to its policyholder upon pledge of the policy ascollateral security any sum not exceeding the cash surrender value of thepolicy, or may lend against pledge or assignment of any of its supplementarycontracts or other contracts or obligations if the loan is adequately securedby the pledge or assignment. Loans so made are eligible investments of theinsurer.

 

26-7-109. Collateral loans.

 

Aninsurer may lend and thereby invest its funds upon the pledge of securitieseligible for investment under this chapter. As of the date made, no such loanshall exceed in amount ninety percent (90%) of the market value of thecollateral pledged. The amount loaned shall be included pro rata in determiningthe maximum percentage of funds permitted under this chapter to be invested inthe categories of securities so pledged.

 

26-7-110. Miscellaneous loans and investments.

 

(a) An insurer may make loans or investments not otherwiseexpressly permitted under this chapter, in aggregate amounts not over fivepercent (5%) of the insurer's assets and not over one percent (1%) of thoseassets as to any one loan or investment, if the loan or investment fulfills therequirements of W.S. 26-7-103 and otherwise qualifies as a sound investment. Nosuch loan or investment shall be represented by:

 

(i) Any item excluded under W.S. 26-6-102 or any loan orinvestment otherwise expressly prohibited;

 

(ii) Agents' balances or amounts advanced to or owing by agents,except as to policy loans, mortgage loans and collateral loans otherwiseauthorized under this chapter;

 

(iii) Any category of loans or investments expressly eligibleunder any other provisions of this chapter;

 

(iv) Any asset theretofore acquired or held by the insurer underany other category of loans or investments eligible under this chapter.

 

(b) An insurer may make loans to industrial developmentcorporations under the laws of this state in an amount not exceeding the limitsset forth in W.S. 17-11-106(b)(iii).

 

(c) The insurer shall keep a separate record of all loans andinvestments made under this section.

 

26-7-111. Security interest in chattels.

 

 

(a) In connection with a mortgage loan on the security of realproperty designed and used primarily for residential purposes only, whichmortgage loan was acquired pursuant to W.S. 26-7-107(a)(xii), an insurer maylend or invest an amount, not exceeding twenty percent (20%) of the amountloaned on or invested in the real property mortgage, on the security ofchattels, to be amortized by regular payments within a term of not more thanfive (5) years, and representing a first and prior lien, except for taxes notthen delinquent, on personal property constituting durable equipment and ownedby the mortgagor and kept and used in the mortgaged premises.

 

(b) For the purposes of this section, "durableequipment" includes only mechanical refrigerators, air conditioningequipment, mechanical laundering machines, heating and cooking stoves andranges, and in the case of apartment houses, motels and hotels, room furnitureand furnishings also.

 

(c) Prior to the acquisition of a chattel mortgage under thissection, items of property to be included therein shall be separately appraisedby a qualified appraiser and the fair market value thereof determined. Nochattel loan shall exceed in amount the same ratio of loan to the value of theproperty as is applicable to the companion loan on the real property.

 

(d) This section does not prohibit an insurer from taking lienson personal property as additional security for any investment otherwiseeligible under this chapter.

 

26-7-112. Security interest in chattels; time limit for disposal.

 

 

(a) Except as stated in subsection (b) of this section, theinsurer shall dispose of real property acquired under W.S. 26-7-107(a)(xiii)(A)within five (5) years after it ceases to be necessary to the insurer in thetransaction of its business and real property acquired under W.S.26-7-107(a)(xiii)(B), (C) and (D) within five (5) years after the date ofacquisition.

 

(b) Upon satisfactory proof that the insurer's interests willsuffer materially by the forced sale of real property, the commissioner, byorder, may grant a reasonable extension of the period within which the insurershall dispose of any particular parcel of real property, unless the insurerelects to hold the real property as an investment for income purposes underW.S. 26-7-107(a)(xiii)(F), in which case thereafter the real property is deemedto have been acquired at a cost equal to its book value at the time of theelection and to be held under and subject to that subparagraph.

 

26-7-113. Disposal of ineligible investments; time limit for disposal.

 

Anypersonal property or securities lawfully acquired by an insurer which it couldnot otherwise have invested in or loaned its funds upon at the time of theacquisition, shall be disposed of within three (3) years from date ofacquisition unless within that period the security becomes an eligibleinvestment, except that any security or personal property acquired under anyagreement of bulk reinsurance, merger or consolidation may be retained for alonger period if so provided in the plan for reinsurance, merger orconsolidation as the commissioner approves under chapter 24 of this code. Uponthe insurer's application and proof that forced sale of any such property orsecurity would materially injure its interests, the commissioner may extend thedisposal period for an additional reasonable time.

 

26-7-114. Disposal of ineligible investments; failure to dispose;disposal of ineligible investments unlawfully acquired.

 

 

(a) Any real property, personal property or securities lawfullyacquired and held by an insurer after expiration of the period for disposalthereof or any extension of that period as provided in W.S. 26-7-107(a)(vi) or26-7-107(a)(vii), shall not be allowed as an insurer's asset.

 

(b) An insurer shall immediately dispose of any ineligibleinvestment unlawfully acquired. The commissioner shall suspend or revoke theinsurer's certificate of authority if the insurer fails to dispose of theinvestment within any reasonable time the commissioner, by order, specifies.

 

26-7-115. Prohibited investments; securities underwriting prohibited.

 

 

(a) In addition to investments excluded pursuant to otherprovisions of this code, an insurer shall not invest in or lend its funds uponthe security of:

 

(i) Issued shares of its own capital stock, except for thepurpose of mutualization under W.S. 26-24-143;

 

(ii) Securities issued by any corporation or enterprise thecontrolling interest of which is or after the insurer's acquisition will beheld by the insurer or any combination of the insurer and the insurer'sdirectors, officers, parent corporation, subsidiaries or controllingstockholders and the spouses and children of any of them. Investments incontrolled insurance corporations or subsidiaries under W.S. 26-7-107(a)(vi),(vii) or (xiv) are not subject to this provision;

 

(iii) Any note or other evidence of indebtedness of any director,officer, employee or controlling stockholder of the insurer or of the spouse orchild of any of them, except as to policy loans authorized under W.S. 26-7-108.

 

(b) No insurer shall underwrite or participate in theunderwriting of an offering of securities or property by any other person.

 

26-7-116. Investments of foreign insurers.

 

Theinvestment portfolio of a foreign or alien insurer shall be as permitted by thelaws of its domicile if of a quality substantially equal to that required underthis chapter for similar funds of like domestic insurers. In determining therelative quality and value of the investment portfolio of a foreign or alieninsurer, the commissioner, for purposes of comparison, may apply the provisionsof this code regulating investments of domestic insurers and valuation of thoseinsurers. If the commissioner determines that the investment portfolio of aforeign or alien insurer is not of a quality substantially equal to thatrequired under this chapter for similar funds of like domestic insurers, he mayrefuse to continue or may suspend or revoke an insurer's certificate ofauthority in accordance with W.S. 26-3-115.

 


State Codes and Statutes

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter7

CHAPTER 7 - INVESTMENTS

 

26-7-101. Scope of chapter.

 

Exceptas to W.S. 26-7-116, this chapter applies to domestic insurers only.

 

26-7-102. Definitions of terms used in chapter; determination of netearnings.

 

 

(a) As used in this chapter:

 

(i) "Fixed charges" means interest on funded andunfunded debt amortization of debt discount and rentals for leased properties;

 

(ii) "Institution" means corporations, joint-stockassociations and business trusts;

 

(iii) "Net earnings available for fixed charges" meansnet income after deducting operating and maintenance expenses, taxes, otherthan federal and state income taxes, depreciation and depletion, but excludingextraordinary nonrecurring items of income or expense appearing in the regularfinancial statements of the institutions involved;

 

(iv) "Obligations" means bonds, debentures, notes orother evidences of indebtedness.

 

(b) If net earnings are determined in reliance uponconsolidated earnings statements of parent and subsidiary institutions, thosenet earnings shall be determined after provision for income taxes ofsubsidiaries and after proper allowance for minority stock interest if any. Therequired coverage of fixed charges shall be computed on a basis including fixedcharges and preferred dividends of subsidiaries other than those payable by thesubsidiaries to the parent corporation or to any other of the subsidiaries,except that if the minority common stock interest in the subsidiary corporationis substantial, the fixed charges and preferred dividends may be apportioned inaccordance with regulations the commissioner prescribes.

 

26-7-103. Eligible investments.

 

 

(a) Insurers shall invest in or lend their funds on thesecurity of and shall hold as invested assets only eligible investmentsprescribed in this chapter.

 

(b) Any particular investment held by an insurer on January 1,1968, which was a legal investment at the time it was made, and which theinsurer was legally entitled to possess immediately prior to that date, is aneligible investment.

 

(c) Eligibility of an investment is determined as of the dateof its making or acquisition, except as stated in subsection (b) of thissection.

 

(d) Any investment limitation based upon the amount of theinsurer's assets or particular funds relates to those assets or funds as shownby the insurer's annual statement as of December 31 immediately preceding thedate of the insurer's acquisition of the investment, or as shown by a currentfinancial statement resulting from merger of another insurer, bulk reinsuranceor change in capitalization.

 

(e) An insurer authorized to transact insurance in a foreigncountry may make investments, in aggregate amount not exceeding its deposit andreserve obligations incurred in that country, in securities of or in thatcountry possessing characteristics and of a quality similar to like investmentsin the United States.

 

26-7-104. General qualifications for investments.

 

(a) No security or investment, other than property acquiredunder W.S. 26-7-107(a)(xiii), is eligible for acquisition unless it is interestbearing or interest accruing or dividend or income paying, is not then indefault and the insurer is entitled to receive for its exclusive account andbenefit the interest or income accruing thereon. Any stock which has theability to appreciate in value shall be considered to be income paying forpurposes of this subsection.

 

(b) No security or investment is eligible for purchase at aprice above its market value.

 

(c) Nothing in this chapter prohibits an insurer from acquiringother or additional securities or property if received as a dividend or as alawful distribution of assets, or under a lawful and bona fide agreement ofbulk reinsurance, merger or consolidation. Any investment so acquired which isnot otherwise eligible under this chapter shall be disposed of pursuant to W.S.26-7-112 if real property, or pursuant to W.S. 26-7-113 if personal property orsecurities.

 

26-7-105. Investment authorization; record.

 

 

(a) No insurer shall make any investment or loan, other than apolicy loan or an annuity contract loan of a life insurer, unless theinvestment or loan is authorized by the insurer's board of directors or by acommittee authorized by the board and charged with the supervision or making ofthe investment or loan. The minutes of any such committee shall be recorded andregular reports of the committee shall be submitted to the board of directors.

 

(b) The insurer shall maintain a full record of eachinvestment, showing, among other pertinent information, the name of anyofficer, director or principal stockholder of the insurer having any interestin the securities, loan or property constituting the investment, or in theperson in whose behalf the investment is made, and the nature of the interest.

 

26-7-106. Diversification of and limits on investments.

 

 

(a) An insurer shall invest in or hold as admitted assets onlycategories of investments within applicable limits as follows:

 

(i) No insurer shall have at any time any combination ofinvestments in or loans upon the security of the obligations, property orsecurities of any one (1) person, institution, corporation or municipalcorporation aggregating an amount exceeding five percent (5%) of the insurer'sassets, except this does not apply to general obligations of the United Statesof America or of any state or include policy loans made under W.S. 26-7-108;

 

(ii) No insurer shall invest in or hold at any time more thanten percent (10%) of the outstanding voting stock of any corporation, exceptwith respect to voting rights of preference stock during default of dividends,except this does not apply to stock of an insurer's subsidiary acquired underW.S. 26-7-107(a)(vii) or (xiv), or to controlling stock of an insurer acquiredunder W.S. 26-7-107(a)(vi);

 

(iii) An insurer, other than a title insurer, shall invest andmaintain invested funds not less in amount than the minimum paid-in capitalstock required under this code of a domestic stock insurer transacting likekinds of insurance, only in cash and the securities provided under W.S.26-7-107(a)(i) and 26-7-107(a)(xii);

 

(iv) A life insurer shall also invest and keep invested itsfunds, in an amount not less than the reserves under its life insurancepolicies and annuity contracts in force, in cash or the securities or investmentsallowed under this chapter, other than in common stocks, insurance stocks andstocks of the insurer's subsidiaries;

 

(v) No life insurer shall invest and have invested at any timein aggregate amount more than seven percent (7%) of its assets in all stocksunder W.S. 26-7-107(a)(iv), (v), (vi) and (viii), except this does not apply tostock of a controlled or subsidiary corporation under W.S. 26-7-107(a)(vi),(vii) and (xiv);

 

(vi) No insurer shall have invested at any time more thansixty-five percent (65%) of its assets in obligations secured by mortgage,trust deed, contract of purchase or other similar encumbrance of real property;

 

(vii) No insurer shall have invested at any time more than sevenpercent (7%) of its assets in either improvement district obligations orequipment trust certificates;

 

(viii) Investments in real property are limited as provided inW.S. 26-7-107(a)(xiii); and

 

(ix) Other specific limits apply as stated in the sectionsdealing with other kinds of investments.

 

26-7-107. Authorized investments.

 

(a) An insurer may invest in:

 

(i) Bonds or other evidences of indebtedness, not in default asto principal or interest, which are valid and legally authorized obligationsissued, assumed or guaranteed by the United States or Canada or by any state,territory, possession or province thereof, or by any county, city, town,village, municipality or other political subdivision or public instrumentalityof one (1) or more of the governmental units specified, if, by statutory orother legal requirements applicable thereto, the obligations are payable as toboth principal and interest from:

 

(A) Taxes levied or required to be levied upon all taxableproperty or all taxable income within the jurisdiction of the governmental unit;or

 

(B) Adequate special revenues pledged or otherwise appropriatedor by law required to be provided for that payment, but not including anyobligation payable solely out of special assessments on properties benefited bylocal improvements unless adequate security is evidenced by the ratio ofassessment to the value of the property or the obligation is additionallysecured by an adequate guaranty fund required by law.

 

(ii) The obligations and stock if stated, issued, assumed orguaranteed by the following agencies of the United States government, or inwhich that government is a participant, whether or not it guarantees theobligations:

 

(A) Commodity credit corporation;

 

(B) Federal intermediate credit banks;

 

(C) Federal land banks;

 

(D) Banks for cooperatives;

 

(E) Federal home loan banks, and stock thereof;

 

(F) Federal national mortgage association and stock thereofwhen acquired in connection with sale of mortgage loans to the association;

 

(G) International bank for reconstruction and development;

 

(H) Inter-American development bank;

 

(J) Any other similar agency of, or participated in by, theUnited States government and of similar financial quality.

 

(iii) Obligations other than those eligible for investment underW.S. 26-7-107(a)(xii) if they are issued, assumed or guaranteed by any solventinstitution created or existing under the laws of the United States or Canadaor of any state, district, territory or province thereof, and are qualifiedunder any of the following:

 

(A) Obligations which are secured by adequate collateralsecurity and bear fixed interest if during each of any three (3), including thelast two (2), of the five (5) fiscal years immediately preceding the date ofthe insurer's acquisition, the net earnings of the issuing, assuming orguaranteeing institution available for its fixed charges, as defined in W.S.26-7-102, have been not less than one and one-fourth (1 1/4) times the total ofits fixed charges for that year. In determining the adequacy of collateralsecurity not more than one-third (1/3) of the total value of the requiredcollateral shall consist of stock other than stock meeting the requirements ofW.S. 26-7-107(a)(iv);

 

(B) Fixed interest-bearing obligations, other than thosedescribed in subparagraph (a)(iii)(A) of this section, if the net earnings ofthe issuing, assuming or guaranteeing institution available for its fixedcharges for a period of five (5) fiscal years immediately preceding the date ofthe insurer's acquisition have averaged per year not less than one and one-half(1 1/2) times its average annual fixed charges applicable to that period and ifduring the last year of that period the net earnings have been not less thanone and one-half (1 1/2) times its fixed charges for that year;

 

(C) Adjustment, income or other contingent interest obligationsif the net earnings of the issuing, assuming or guaranteeing institutionavailable for its fixed charges for a period of five (5) fiscal yearsimmediately preceding the date of the insurer's acquisition have averaged peryear not less than one and one-half (1 1/2) times the sum of its average annualfixed charges and its average annual maximum contingent interest applicable tothat period and if during each of the last two (2) years of that period the netearnings have been not less than one and one-half (1 1/2) times the sum of itsfixed charges and maximum contingent interest for each year.

 

(iv) Preferred or guaranteed stocks or shares of any solventinstitution existing under the laws of the United States or of Canada, or ofany state or province thereof, if all of the prior obligations and priorpreferred stocks, if any, of the institution at the date of the insurer'sacquisition of the investment are eligible as investments under this chapterand if the net earnings of the institution available for its fixed chargesduring each of the last two (2) years have been, and during each of the lastfive (5) years have averaged, not less than one and one-half (1 1/2) times thesum of its average annual fixed charges, if any, its average annual maximumcontingent interest, if any, and its average annual preferred dividendrequirements. For the purposes of this paragraph the computation shall refer tothe fiscal years immediately preceding the date of the insurer's acquisition ofthe investment, and the term "preferred dividend requirement" meanscumulative or noncumulative dividends, whether paid or not;

 

(v) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of the UnitedStates or Canada, or of any state or province thereof, if the corporation hashad net earnings available for dividends on its stock in each of the five (5)fiscal years immediately preceding the insurer's investment therein. If theissuing corporation has not been in legal existence for the whole of the five(5) fiscal years but was formed as a consolidation or merger of two (2) or morebusinesses of which at least one (1) was in operation on a date five (5) yearsprior to the investment, the test of eligibility of its common stock under thisparagraph shall be based upon consolidated pro forma statements of thepredecessor or constituent institutions;

 

(vi) Stocks of other solvent insurers formed under the laws ofthis or another state, which stocks meet the applicable requirements of W.S.26-7-107(a)(iv) and 26-7-107(a)(v). With the commissioner's advance writtenconsent an insurer may acquire and hold the controlling interest in theoutstanding voting stock of another stock insurer formed under the laws of thisor another state, which stocks are limited as to amount as provided in W.S.26-7-107(a)(vii). The commissioner shall not give his consent to any suchacquisition if he finds it is not in the best interests of the insurersinvolved or of their policyholders or stockholders, or that the acquisitionwould materially tend to result in any monopoly in the insurance business;

 

(vii) Stock of a subsidiary insurance corporation it forms. Allof the insurer's investments under this paragraph, together with itsinvestments in insurance stocks under W.S. 26-7-107(a)(vi), shall not at anytime exceed the amount of the investing insurer's surplus, if a life insurer,or its surplus to policyholders if other than a life insurer;

 

(viii) A bank's common trust fund as defined in section 584 of theUnited States Internal Revenue Code of 1954;

 

(ix) The securities of any open-end management type investmentcompany or investment trust registered with the federal securities and exchangecommission under the Investment Company Act of 1940 as from time to timeamended, if the investment company or trust has assets of not less thantwenty-five million dollars ($25,000,000.00) on the date of the insurer'sinvestment;

 

(x) Equipment trust obligations or certificates adequatelysecured and evidencing an interest in transportation equipment, wholly or inpart within the United States of America, which obligations or certificatescarry the right to receive determined portions of rental, purchase or otherfixed obligatory payments to be made for the use or purchase of thetransportation equipment;

 

(xi) Share accounts, savings accounts of savings and loanassociations or building and loan associations or in the savings accounts ofbanks;

 

(xii) First liens upon improved real property located in this orany other state or in Canada, subject to the following conditions:

 

(A) For liens on single family residence property the amountloaned shall not exceed seventy-five percent (75%) of the fair value of theproperty, and the loan shall be amortized within not more than thirty (30)years by payment of installments thereon at regular intervals not less frequentthan every three (3) months;

 

(B) For liens on other improved real property the amount loanedshall not exceed sixty-six and two-thirds percent (66 2/3%) of the fair valueof the property;

 

(C) No loan shall be made or acquired by the insurer unless thefair value of the property has been determined, for the purposes of the loan,by a qualified independent appraiser;

 

(D) In applying the limitations provided in subparagraphs (A)and (B) of this paragraph, the amount in which the loan is guaranteed by theadministrator of veteran's affairs or insured by the federal housingadministration or other United States or Canadian government agency may beexcluded from the amount of the loan;

 

(E) Insurance not less comprehensive than fire and extendedcoverage shall be carried on the improvements on the property in an amount notless than the insurable value of the improvements, or the amount of the loan,whichever is less, and the policy evidencing the insurance endorsed to show theinterest of the mortgagee. "Improved real property" means all farmlands used for tillage, crop, other than timber, or pasture, and all realproperty on which permanent improvements, installations or structures suitablefor residence or construction of residences, or for commercial or industrialuse, are situated;

 

(F) Subparagraphs (A), (B) and (C) of this paragraph do notapply to purchase money mortgages taken by the insurer upon sale of propertytheretofore owned by it and covering the real property. No such mortgage shallbe for an amount exceeding the original unpaid balance of the purchase price.

 

(xiii) Real property as follows:

 

(A) The land and the buildings thereon occupied by it as itsprincipal office and any other real property necessary in the transaction ofits business, provided the amount so invested and apportioned as to spaceactually so occupied shall not aggregate more than fifteen percent (15%) of theinsurer's assets;

 

(B) Acquired in satisfaction of loans, mortgages, liens,judgments, decrees or debts previously owing to the insurer in the course ofits business;

 

(C) Acquired in part payment of the consideration of the saleof other real property it owns, if the transaction effects a net reduction inthe insurer's investments in real property;

 

(D) Acquired by gift or devise or through merger, consolidationor bulk reinsurance of another insurer under this code;

 

(E) The seller's interest in real property subject to anagreement of purchase or sale, but the sum invested in the seller's interestshall not exceed two-thirds (2/3) of the fair value of the property;

 

(F) Improved real property, or any interest therein acquired orheld by purchase, lease or otherwise, other than real property to be usedprimarily for agricultural, ranch, mining, development of oil or mineralresources, recreational, amusement, hotel, motel or club purposes, acquired asan investment for the production of income or acquired to be improved ordeveloped for such investment purposes pursuant to an existing programtherefor. The insurer may hold, improve, develop, maintain, manage, lease, selland convey real property it acquires under this provision. An insurer shall nothave at any time invested in real property under this subparagraph an amountexceeding fifteen percent (15%) of its assets. An investment in any singleparcel of real estate acquired under this subparagraph after March 1, 1975,shall not exceed four percent (4%) of the company's assets;

 

(G) Additional real property and equipment incident to realproperty, if necessary or convenient for the purpose of enhancing the sale orother value of real property previously acquired or held under subparagraphs(B), (C), (D) or (F) of this paragraph. The real property and equipment shallbe included, together with the real property for the enhancement of which itwas acquired, for the purpose of applicable investment limits, and is subjectto disposal at the same time and under the same conditions applying to theenhanced real property under W.S. 26-7-112;

 

(H) All real property owned by the insurer under this section,except as to seller's interest specified in subparagraph (E) of this paragraph,shall not at any time exceed thirty percent (30%) of the insurer's assets.

 

(xiv) Common stock, preferred stock, debt obligations, and othersecurities of one (1) or more subsidiary business corporations formed under thelaws of this state and necessary and incidental to the insurer's insurancebusiness or to the administration of any of its investments. The amount of theinvestment is governed by W.S. 26-44-102(b);

 

(xv) Nonassessable common stocks, other than insurance stocks,of any solvent corporation organized and existing under the laws of any foreigncountry, any such investment to be subject to the limitations of W.S. 26-7-106.At any one time, the aggregate amount of foreign investments shall not exceedtwenty percent (20%) of the insurer's admitted assets.

 

26-7-108. Policy loans.

 

Alife insurer may lend to its policyholder upon pledge of the policy ascollateral security any sum not exceeding the cash surrender value of thepolicy, or may lend against pledge or assignment of any of its supplementarycontracts or other contracts or obligations if the loan is adequately securedby the pledge or assignment. Loans so made are eligible investments of theinsurer.

 

26-7-109. Collateral loans.

 

Aninsurer may lend and thereby invest its funds upon the pledge of securitieseligible for investment under this chapter. As of the date made, no such loanshall exceed in amount ninety percent (90%) of the market value of thecollateral pledged. The amount loaned shall be included pro rata in determiningthe maximum percentage of funds permitted under this chapter to be invested inthe categories of securities so pledged.

 

26-7-110. Miscellaneous loans and investments.

 

(a) An insurer may make loans or investments not otherwiseexpressly permitted under this chapter, in aggregate amounts not over fivepercent (5%) of the insurer's assets and not over one percent (1%) of thoseassets as to any one loan or investment, if the loan or investment fulfills therequirements of W.S. 26-7-103 and otherwise qualifies as a sound investment. Nosuch loan or investment shall be represented by:

 

(i) Any item excluded under W.S. 26-6-102 or any loan orinvestment otherwise expressly prohibited;

 

(ii) Agents' balances or amounts advanced to or owing by agents,except as to policy loans, mortgage loans and collateral loans otherwiseauthorized under this chapter;

 

(iii) Any category of loans or investments expressly eligibleunder any other provisions of this chapter;

 

(iv) Any asset theretofore acquired or held by the insurer underany other category of loans or investments eligible under this chapter.

 

(b) An insurer may make loans to industrial developmentcorporations under the laws of this state in an amount not exceeding the limitsset forth in W.S. 17-11-106(b)(iii).

 

(c) The insurer shall keep a separate record of all loans andinvestments made under this section.

 

26-7-111. Security interest in chattels.

 

 

(a) In connection with a mortgage loan on the security of realproperty designed and used primarily for residential purposes only, whichmortgage loan was acquired pursuant to W.S. 26-7-107(a)(xii), an insurer maylend or invest an amount, not exceeding twenty percent (20%) of the amountloaned on or invested in the real property mortgage, on the security ofchattels, to be amortized by regular payments within a term of not more thanfive (5) years, and representing a first and prior lien, except for taxes notthen delinquent, on personal property constituting durable equipment and ownedby the mortgagor and kept and used in the mortgaged premises.

 

(b) For the purposes of this section, "durableequipment" includes only mechanical refrigerators, air conditioningequipment, mechanical laundering machines, heating and cooking stoves andranges, and in the case of apartment houses, motels and hotels, room furnitureand furnishings also.

 

(c) Prior to the acquisition of a chattel mortgage under thissection, items of property to be included therein shall be separately appraisedby a qualified appraiser and the fair market value thereof determined. Nochattel loan shall exceed in amount the same ratio of loan to the value of theproperty as is applicable to the companion loan on the real property.

 

(d) This section does not prohibit an insurer from taking lienson personal property as additional security for any investment otherwiseeligible under this chapter.

 

26-7-112. Security interest in chattels; time limit for disposal.

 

 

(a) Except as stated in subsection (b) of this section, theinsurer shall dispose of real property acquired under W.S. 26-7-107(a)(xiii)(A)within five (5) years after it ceases to be necessary to the insurer in thetransaction of its business and real property acquired under W.S.26-7-107(a)(xiii)(B), (C) and (D) within five (5) years after the date ofacquisition.

 

(b) Upon satisfactory proof that the insurer's interests willsuffer materially by the forced sale of real property, the commissioner, byorder, may grant a reasonable extension of the period within which the insurershall dispose of any particular parcel of real property, unless the insurerelects to hold the real property as an investment for income purposes underW.S. 26-7-107(a)(xiii)(F), in which case thereafter the real property is deemedto have been acquired at a cost equal to its book value at the time of theelection and to be held under and subject to that subparagraph.

 

26-7-113. Disposal of ineligible investments; time limit for disposal.

 

Anypersonal property or securities lawfully acquired by an insurer which it couldnot otherwise have invested in or loaned its funds upon at the time of theacquisition, shall be disposed of within three (3) years from date ofacquisition unless within that period the security becomes an eligibleinvestment, except that any security or personal property acquired under anyagreement of bulk reinsurance, merger or consolidation may be retained for alonger period if so provided in the plan for reinsurance, merger orconsolidation as the commissioner approves under chapter 24 of this code. Uponthe insurer's application and proof that forced sale of any such property orsecurity would materially injure its interests, the commissioner may extend thedisposal period for an additional reasonable time.

 

26-7-114. Disposal of ineligible investments; failure to dispose;disposal of ineligible investments unlawfully acquired.

 

 

(a) Any real property, personal property or securities lawfullyacquired and held by an insurer after expiration of the period for disposalthereof or any extension of that period as provided in W.S. 26-7-107(a)(vi) or26-7-107(a)(vii), shall not be allowed as an insurer's asset.

 

(b) An insurer shall immediately dispose of any ineligibleinvestment unlawfully acquired. The commissioner shall suspend or revoke theinsurer's certificate of authority if the insurer fails to dispose of theinvestment within any reasonable time the commissioner, by order, specifies.

 

26-7-115. Prohibited investments; securities underwriting prohibited.

 

 

(a) In addition to investments excluded pursuant to otherprovisions of this code, an insurer shall not invest in or lend its funds uponthe security of:

 

(i) Issued shares of its own capital stock, except for thepurpose of mutualization under W.S. 26-24-143;

 

(ii) Securities issued by any corporation or enterprise thecontrolling interest of which is or after the insurer's acquisition will beheld by the insurer or any combination of the insurer and the insurer'sdirectors, officers, parent corporation, subsidiaries or controllingstockholders and the spouses and children of any of them. Investments incontrolled insurance corporations or subsidiaries under W.S. 26-7-107(a)(vi),(vii) or (xiv) are not subject to this provision;

 

(iii) Any note or other evidence of indebtedness of any director,officer, employee or controlling stockholder of the insurer or of the spouse orchild of any of them, except as to policy loans authorized under W.S. 26-7-108.

 

(b) No insurer shall underwrite or participate in theunderwriting of an offering of securities or property by any other person.

 

26-7-116. Investments of foreign insurers.

 

Theinvestment portfolio of a foreign or alien insurer shall be as permitted by thelaws of its domicile if of a quality substantially equal to that required underthis chapter for similar funds of like domestic insurers. In determining therelative quality and value of the investment portfolio of a foreign or alieninsurer, the commissioner, for purposes of comparison, may apply the provisionsof this code regulating investments of domestic insurers and valuation of thoseinsurers. If the commissioner determines that the investment portfolio of aforeign or alien insurer is not of a quality substantially equal to thatrequired under this chapter for similar funds of like domestic insurers, he mayrefuse to continue or may suspend or revoke an insurer's certificate ofauthority in accordance with W.S. 26-3-115.

 

Categories