31A-18-108. Prohibited investments.

287 words·~1 min read·/ut/title-31a/chapter-18/31a-18-108

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

Effective 5/7/2025

(1)As used in this section, "government insurer" means a governmental entity that is authorized by statute or rule to provide an arrangement, contract, or plan:

(a)for the transfer of a risk or risks from one or more persons to one or more other persons; or

(b)for the distribution of a risk or risks among a group of persons that includes the person seeking to distribute that person's risk.

(2)An insurer may not:

(a)invest in:

(i)an investment prohibited by a department rule or statute of this state;

(ii)securities issued by a corporation if one or more of the insurer's officers or directors owns, directly or indirectly, a majority of the corporation's stock with voting power;

(iii)securities issued by an insolvent corporation; or

(iv)any instrument or security that the commissioner finds is designed to evade a limitation or prohibition in this chapter; or

(b)use a derivative instrument for:

(i)replication; or

(ii)any purpose other than hedging or income generation.

(3)A government insurer may not invest public funds in an investment where the sole purpose of the investment is a purpose other than maximizing the risk-adjusted return on the investment.

(4)The commissioner shall allow an insurer a reasonable time, not to exceed five years, to divest of prohibited investments if:

(a)the insurer demonstrates the investment was not prohibited at the time the insurer made the investment;

(b)the insurer made a good faith mistake in making the investment; or

(c)the commissioner determines that the sale of the investment is contrary to the interests of insureds, creditors, or the general public.

Repealed and Re-enacted by Chapter 368 , 2025 General Session