40-2b29. Investment in asset-backed securities; conditions; definitions. (a) Any life insurance company organized under any law of this state may invest, by loans or otherwise, with the direction or approval of a majority of its board of directors or authorized committee thereof, any of its funds, or any part thereof, in asset-backed securities, subject to the following:
(1) To be an admitted asset under this section, an asset-backed security must, at the time of acquisition, be designated "1" or "2" by the SVO or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO; and
(2) the investment in any one issue of asset-backed securities shall not exceed 2% of the admitted assets of the life insurance company as shown by its last annual report or a more recent quarterly financial statement filed with the commissioner. Each issue designated as provided in paragraph (1) shall constitute a single issue regardless of any other obligations or securities issued by the same or any affiliated issuer.
(b) As used in this section:
(1) "Asset-backed security" means any security or other instrument representing or evidencing an interest in, a loan to, a participation in a loan to, or any other right to receive payments from a business entity of any type or form, which has as its primary business activity the acquisition and holding of financial assets, directly or through a trustee, for the benefit of such business entity's debt or equity holders;
(2) "financial asset" means a single asset or a pool of assets consisting of interest-bearing obligations or other contractual obligations representing or constituting the right to receive payment from the asset or pool of assets;
(3) "NAIC" means the national association of insurance commissioners; and
(4) "SVO" means the securities valuation office of the NAIC or any successor office established by the NAIC.
History: L. 1995, ch. 23, § 1; L. 2014, ch. 43, § 8; L. 2015, ch. 7, § 15; July 1.
Structure Kansas Statutes
Article 2b - Investments By Life Insurance Companies
40-2b01 United States government obligations; call options.
40-2b02 State, District of Columbia, territorial and municipal obligations.
40-2b03 Canadian government, provincial and municipal obligations.
40-2b04 Investments in foreign jurisdictions and currencies; definitions.
40-2b05 Business entity obligations; definitions.
40-2b06 Preferred and guaranteed stocks; definitions.
40-2b07 Equity interests; call options.
40-2b08 Equipment trust obligations or conditional sales contracts.
40-2b09 Real estate bonds, mortgages, tax lien certificates.
40-2b15 Savings and loan shares or deposits.
40-2b16 Bank certificates of deposit.
40-2b18 Real estate investment trusts.
40-2b19 Prior lawful investments.
40-2b24 Investment companies; money market mutual funds.
40-2b26 Mortgage related securities.
40-2b27 Medium and lower grade obligations; definitions.
40-2b28 Same; limitations; exceptions; insurance company required to adopt written investment plan.
40-2b29 Investment in asset-backed securities; conditions; definitions.