Iowa Admin. Code r. 191-5.10

Current through Register Vol. 47, No. 5, August 21, 2024

Rule 191-5.10 - Life companies-permissible investments

(1) The phrase "preferred dividend requirements as of the date of acquisition" in Iowa Code section 5118(6). is construed to include the dividend requirements of a new issue. Consequently, a new preferred issue will qualify if the net earnings of the corporation for each of the five preceding years have been not less than one and one-half times the sum of the annual fixed charges, contingent interest and the annual preferred dividend requirements including the new issue.

(2) The phrase "the obligations are adequately secured and have investment qualities and characteristics wherein the speculative elements are not predominant" in Iowa Code section 5118(5). means "investment grade" as defined in 191-subrule 22.1(4). As a result, except as permitted by the commissioner in exceptional circumstances, corporate obligations must be "investment grade" in order to meet legal reserve requirements unless the other requirements of Iowa Code section 5118(5). "a" regarding the financial condition of the issuer of the obligation are met. The legal reserve investment limitations of Iowa Code section 5118. regarding less than investment grade obligations, but not the deposit requirements of that section, are applicable to foreign insurers.

This rule is intended to implement Iowa Code section 511.8(5).

Iowa Admin. Code r. 191-5.10