Section 3 AAC 21.251 - Tangible personal property under lease for a life and health insurer(a) Subject to the requirements in (b) of this section, a life and health insurer may acquire, hold, or invest in tangible personal property or an equity interest located or used wholly or in part within a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited by 3 AAC 21.216, a joint venture, stock of an investment subsidiary or membership interest in a limited liability company, a trust certificate, or another similar instrument.(b) A life and health insurer may acquire, hold, or invest in an investment under (a) of this section only if the (1) property is subject to a lease or other agreement with a person whose rated credit instruments would be eligible to be acquired by the life and health insurer under 3 AAC 21.236 in the amount of the purchase price of the personal property; and(2) lease or other agreement described in (1) of this subsection provides the life and health insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefit to the life and health insurer resulting from ownership of the property, is adequate to return the cost of the life and health insurer' s investment in the property, plus a return considered adequate by the life and health insurer.(c) The life and health insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the life and health insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the life and health insurer.(d) A life and health insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the life and health insurer under this section would exceed (1) two percent of the life and health insurer's admitted assets; or(2) one-half of one percent of the life and health insurer's admitted assets as to any single item of tangible personal property.(e) For purposes of determining compliance with the limitations of 3 AAC 21.231, a life and health insurer shall aggregate all investments acquired under this section with those acquired under 3 AAC 21.236, and each lessee of the property under a lease referred to in this section will be considered the issuer of an obligation in the amount of the investment of the life and health insurer in the property determined as provided in (c) of this section.(f) This section does not apply to a tangible personal property lease arrangement between a life and health insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under AS 21.22.Eff. 12/28/2001, Register 160Authority:AS 21.06.090
AS 21.18.010
AS 21.18.030
AS 21.18.040
AS 21.21.010
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AS 21.21.255
AS 21.21.420