KRS 304.6-020: Assets not allowed.

The following expressly shall not be allowed as assets in any determination of the

financial condition of an insurer:

(1) Good will, trade names, and other like intangible assets, except as expressly

permitted and as prescribed by the National Association of Insurance

Commissioners' accounting practices and procedures;

(2) Advances to officers or directors (other than policy loans) whether secured or not,

and advances to employees, agents and other persons on personal security only;

(3) Stock of such insurer, owned by it, or loans secured thereby. Any such stock owned

by such insurer shall be held as treasury stock and be deducted from the total issue

of outstanding shares;

(4) Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literat ure and

supplies. The following assets are not excluded assets under this subsection:

(a) Equipment authorized under subsection (1) of KRS 304.6-010;

(b) For title insurers, such materials and plants as the insurer is expressly

authorized to invest in unde r paragraph (k) of subsection (1) of KRS 304.6 -

010;

(c) Such personal property as the insurer is permitted to hold pursuant to Subtitle

7 or which is reasonably necessary for the maintenance and operation of real

estate lawfully acquired and held by the in surer, other than real estate used by

it for home office, branch office, and similar purposes; and

(d) For health reporting entities, furniture, medical equipment, fixtures, and

leasehold improvements used for the direct delivery of health care services;

(5) The amount, if any, by which the aggregate book value of investments as carried in

the ledger assets of the insurer exceeds the aggregate value thereof as determined

under this code;

(6) Due and accrued investment income determined to be uncollectible i n accordance

with SSAP No. 5;

(7) Due and accrued investment interest determined to be uncollectible in accordance

with SSAP No. 5;

(8) Nonoperating system software;

(9) Leasehold improvements that do not meet the definition of assets set forth in SSAP

No. 4;

(10) Deposits in suspended depositories;

(11) Receivables determined to be uncollectible or otherwise impaired in accordance

with SSAP No. 5;

(12) Automobiles, airplanes, and other vehicles;

(13) A loan receivable and accrued interest, if collateralized by the reporting entity's own

stock;

(14) Prepaid expenses; and

(15) Any other asset that does not meet the definition of an asset, or has been specifically

identified as a nonadmitted asset in the accounting practices and procedures manual.