KRS 304.7-423: Investment practices that are allowed without regard to limitations of

this subtitle.

(1) Solely for the purpose of acquiring investments that exceed the quantitative

limitations of KRS 304.7 -403, 304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-

413, 304.7 -415, and 304.7 -417, an insurer may acquire under this subsection an

investment, or engage in investment practices described in KRS 304.7 -415, but an

insurer shall not acquire an investment, or engage in investment practices described

in KRS 304.7 -415, under this subsection if, as a result of and after giving effect to

the transaction:

(a) The aggregate amount of investments then held by an insurer under this

subsection would exceed three percent (3%) of its admitted assets; or

(b) The aggregate amo unt of investments as to one (1) limitation in KRS 304.7 -

403, 304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and

304.7-417 then held by the insurer under this subsection would exceed one

percent (1%) of its admitted assets.

(2) (a) In addition to the authority provided under subsection (1) of this section, an

insurer may acquire under this subsection an investment of any kind, or

engage in investment practices described in KRS 304.7 -415, that are not

specifically prohibited by this subtit le, without regard to the categories,

conditions, standards, or other limitations of KRS 304.7 -403, 304.7 -405,

304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7 -417 if, as

a result of and after giving effect to the transaction, the aggregate amount of

investments then held under this subsection would not exceed the lesser of:

1. Ten percent (10%) of its admitted assets; or

2. Seventy-five percent (75%) of its capital and surplus.

(b) However, an insurer shall not acquire any investment or eng age in any

investment practice under this subsection if, as a result of and after giving

effect to the transaction, the aggregate amount of all investments in any one

(1) person then held by the insurer under this subsection would exceed three

percent (3%) of its admitted assets.

(3) In addition to the investments acquired under subsections (1) and (2) of this section,

an insurer may acquire under this subsection an investment of any kind, or engage

in investment practices described in KRS 304.7 -415, that a re not specifically

prohibited by this subtitle without regard to any limitations of KRS 304.7 -403,

304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7-417

if:

(a) The commissioner grants prior approval;

(b) The insurer demonstrates that its investments are being made in a prudent

manner and that the additional amounts will be invested in a prudent manner;

and

(c) As a result of and after giving effect to the transaction, the aggregate amount

of investments then held by the insurer u nder this subsection does not exceed

the greater of:

1. Twenty-five percent (25%) of its capital and surplus; or

2. One hundred percent (100%) of capital and surplus less ten percent

(10%) of its admitted assets.

(4) An investment prohibited under KRS 304.7 -363, not permitted under KRS 304.7 -

419, or additional derivative instruments acquired under KRS 304.7 -419 shall not

be acquired under this section.