KRS 304.7-463: Tangible personal property or equity interests acquired through

partnerships, joint ventures, trust certificates, and similar instruments.

(1) (a) Subject to the limitations of KRS 304.7 -455, an insurer may acquire tangible

personal property or equi ty interests therein located or used wholly or in part

within a domestic jurisdiction either directly or indirectly through limited

partnership interests and general partnership interests not otherwise prohibited

by KRS 304.7 -363(4), joint ventures, stock of an investment subsidiary or

membership interests in a limited liability company, trust certificates, or other

similar instruments.

(b) Investments acquired under paragraph (a) of this subsection shall be eligible

only if:

1. The property is subject to a lease or other agreement with a person

whose rated credit instruments in the amount of the purchase price of the

personal property the insurer could then acquire under KRS 304.7 -457;

and

2. The lease or other agreement provides the insurer the right to re ceive

rental, purchase, or other fixed payments for the use or purchase of the

property, and the aggregate value of the payments, together with the

estimated residual value of the property at the end of its useful life and

the estimated tax benefits to the insurer resulting from ownership of the

property, shall be adequate to return the cost of the insurer's investment

in the property, plus a return deemed adequate by the insurer.

(2) The insurer shall compute the amount of each investment under this sectio n on the

basis of the out -of-pocket purchase price and applicable related expenses paid by

the insurer for the investment, net of each borrowing made to finance the purchase

price and expenses, to the extent the borrowing is without recourse to the insurer.

(3) An insurer shall not acquire an investment under this section if, as a result of and

after giving effect to the investment, the aggregate amount of all investments then

held by the insurer under this section would exceed;

(a) Two percent (2%) of its admitted assets; or

(b) One-half of one percent (0.5%) of its admitted assets as to any single item of

tangible personal property.

(4) For purposes of determining compliance with the limitations of KRS 304.7 -455,

investments acquired by an insurer under this section shall be aggregated with those

acquired under KRS 304.7 -457, and each lessee of the property under a lease

referred to in this section shall be deemed the issuer of an obligation in the amount

of the investment of the insurer in the property det ermined as provided in

subsection (2) of this section.

(5) Nothing in this section is applicable to tangible personal property lease

arrangements between an insurer and its subsidiaries and affiliates under a cost -

sharing arrangement or agreement permitted under KRS 304.37-030.