31A-18-105. Prudence evaluation criteria.

262 words·~1 min read·/ut/title-31a/chapter-18/31a-18-105

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 5/7/2025

(1)An insurer shall consider the following factors to determine whether an investment portfolio or investment policy is prudent:

(a)general economic conditions;

(b)the possible effect of inflation or deflation;

(c)the expected tax consequences of investment decisions or strategies;

(d)the fairness or reasonableness of the terms of an investment considering the investment's:

(i)probable risk and reward characteristics; and

(ii)relationship to the investment portfolio as a whole;

(e)the extent of the diversification of the insurer's investments among:

(i)individual investments;

(ii)classes of investments;

(iii)industry concentrations;

(iv)dates of maturity; and

(v)geographic areas;

(f)the quality and liquidity of investments in the insurer's affiliates;

(g)the investment exposure to:

(i)liquidity risk;

(ii)credit and default risk;

(iii)systemic risk;

(iv)interest rate risk;

(v)call, prepayment, and extension risk;

(vi)exchange rate risk; and

(vii)foreign sovereign risk;

(h)the amount of the insurer's:

(i)assets;

(ii)capital and surplus;

(iii)premium writings;

(iv)insurance in force; and

(v)other appropriate characteristics;

(i)the insurer's reported liabilities;

(j)the matching of the expected cash flows of the insurer's assets and liabilities;

(k)the risk of adverse changes in the insurer's assets and liabilities; and

(l)the adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer.

(2)The commissioner shall consider the factors described in Subsection

(1)before making a determination that an insurer's investment portfolio or investment policy is not prudent.

Repealed and Re-enacted by Chapter 368 , 2025 General Session