{"data":{"id":"us-ky/krs-304.37-110","jurisdiction":"us-ky","citation":"KRS 304.37-110","heading":"Subsidiaries that may be organized or acquired by domestic insurer --","body":"Investments of domestic insurers.\n(1) Any domestic insurer, either by itself or in cooperation with one (1) or more\npersons, may organize or acquire one (1) or more subsidiaries engaged in the\nfollowing kinds of business:\n(a) Any kind of insurance business authorized by the jurisdiction in which it is\nincorporated;\n(b) Acting as an insurance agent for its parent or any of its parent's insurer\nsubsidiaries;\n(c) Investing, reinvesting, or trading in securities for its own account, that of its\nparent, any subsidiary of its parent, or any affiliate or subsidiary;\n(d) Management of any investment company subject to or registered pursuant to\nthe Investment Company Act of 1940, as amended, including related sales and\nservices;\n(e) Acting as a broker -dealer subject to or registered pursuant to the Securities\nExchange Act of 1934, as amended;\n(f) Rendering investment advice to governments, government agencies,\ncorporations, or other organizations or groups;\n(g) Rendering other services related to the operations of an insurance business,\nsuch as actuarial, loss prevention, safety engineering, data processing,\naccounting, claims, appraisal, and collection services;\n(h) Ownership and management of assets which the parent corporation may own\nor manage if the aggregate investment by the insurer and its subsidiaries\nacquired or organized pursuant to this paragraph shall not exceed the\nlimitations applicable to these investments by the insurer. This paragraph shall\nnot prohibit investments permitted under KRS 304.7-120;\n(i) Acting as an administrative agent for a governmental instrumentality which is\nperforming an insurance function;\n(j) Financing of insurance premiums, agents, and other forms of cons umer\nfinancing;\n(k) Any other business activity determined by the commissioner to be reasonably\nancillary to an insurance business; and\n(l) Owning a corporation or corporations engaged or organized to engage\nexclusively in one (1) or more businesses specified in this section.\n(2) In addition to investments in common stock, preferred stock, debt obligations, and\nother securities permitted under this chapter, a domestic insurer may also:\n(a) Invest, in common stock, preferred stock, debt obligations, and other\nsecurities of one (1) or more subsidiaries, amounts which do not exceed the\nlesser of ten percent (10%) of the insurer's assets or fifty percent (50%) of the\ninsurer's surplus as regards  policyholders, if after these investments, the\ninsurer's surplus as regards policyholders will be reasonable in relation to the\ninsurer's outstanding liabilities and adequate to meet its financial needs. In\ncalculating the amount of these investments, inv estments in domestic or\nforeign insurance subsidiaries shall be excluded, and there shall be included:\n1. Total net moneys or other consideration expended and obligations\nassumed in the acquisition or formation of a subsidiary, including all\norganizational expenses and contributions to capital and surplus of the\nsubsidiary whether or not represented by the purchase of capital stock or\nissuance of other securities; and\n2. All amounts expended in acquiring additional common stock, preferred\nstock, debt obliga tions, and other securities and all contributions to the\ncapital or surplus, of a subsidiary subsequent to its acquisition or\nformation;\n(b) Invest any amount in common stock, preferred stock, debt obligations, and\nother securities of one (1) or more subsi diaries engaged or organized to\nengage exclusively in the ownership and management of assets authorized as\ninvestments for the insurer, if each subsidiary agrees to limit its investments in\nany asset so that the investments will not cause the amount of the  total\ninvestment of the insurer to exceed any of the investment limitations specified\nin paragraph (a) of this subsection or in Subtitle 7 of KRS Chapter 304. For\nthe purpose of this paragraph, \"the total investment of the insurer\" shall\ninclude:\n1. Any direct investment by the insurer in an asset; and\n2. The insurer's proportionate share of any investment in an asset by any\nsubsidiary of the insurer, which shall be calculated by multiplying the\namount of the subsidiary's investment by the percentage of th e\nownership of the subsidiary;\n(c) With the approval of the commissioner, invest any greater amount in common\nstock, preferred stock, debt obligations, or other securities of one (1) or more\nsubsidiaries, if after the investment the insurer's surplus as re gards\npolicyholders will be reasonable in relation to the insurer's outstanding\nliabilities and adequate to its financial needs.\n(3) Investments in common stock, preferred stock, debt obligations, or other securities\nof subsidiaries made pursuant to subsection (2) of this section shall not be subject to\nany of the otherwise applicable restrictions or prohibitions contained in this chapter\napplicable to the investments of insurers.\n(4) Whether any investment pursuant to subsection (2) of this section meets t he\nrequirements shall be determined before the investment is made, by calculating the\napplicable investment limitations as though the investment had already been made,\ntaking into account the then outstanding principal balance on all previous\ninvestments in debt obligations, and the value of all previous investments in equity\nsecurities as of the day they were made, net of any return of capital invested, not\nincluding dividends.\n(5) If an insurer ceases to control a subsidiary, it shall dispose of any inves tment made\npursuant to this section within three (3) years of the time of the cessation of control,\nor within an extension of time as the commissioner may prescribe, unless at any\ntime after the investment has been made, the investment has met the requirem ents\nfor investment under any other provision of this chapter, and the insurer has notified\nthe commissioner.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=29940","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:56Z","sha256":"918f086632eb1c13a1fbfb38a83e1b8979b543f2f9962cd3b06b3b23b1f8741c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.37-100","next":"us-ky/krs-304.37-120"},"notice":"GroundRules: Original legal text. Not legal advice."}