{"data":{"id":"us-ky/krs-304.7-403","jurisdiction":"us-ky","citation":"KRS 304.7-403","heading":"Limits on investments.","body":"(1) (a) Except as otherwise specified in this subtitle, an insurer shall not acquire,\ndirectly or indirectly through an investment subsidiary, an investment under\nthis subtitle if, as a result of and after giving effect to the investment, the\ninsurer would hold mo re than three percent (3%) of its admitted assets in\ninvestments of all kinds issued, assumed, accepted, insured, or guaranteed by\na single person.\n(b) This three percent (3%) limitation shall not apply to the aggregate amounts\ninsured by a single financia l guaranty insurer with the highest generic rating\nissued by a nationally recognized statistical rating organization.\n(c) Asset-backed securities shall not be subject to the limitations of paragraph (a)\nof this subsection, however an insurer shall not acqu ire an asset -backed\nsecurity if, as a result of and after giving effect to the investment, the\naggregate amount of asset -backed securities secured by or evidencing an\ninterest in a single asset or single pool of assets held by a trust or other\nbusiness entity, then held by the insurer would exceed three percent (3%) of\nits admitted assets.\n(2) (a) An insurer shall not acquire, directly or indirectly through an investment\nsubsidiary, an investment under KRS 304.7-405, 304.7-411, and 304.7-417, or\ncounterparty exposure under KRS 304.7 -419(4), if, as a a result of and after\ngiving effect to the investment:\n1. The aggregate amount of medium and lower grade investments then held\nby the insurer would exceed twenty percent (20%) of its admitted assets;\n2. The aggre gate amount of lower grade investments then held by the\ninsurer would exceed ten percent (10%) of its admitted assets;\n3. The aggregate amount of investments rated 5 or 6 by the SVO then held\nby the insurer would exceed three percent (3%) of its admitted assets;\n4. The aggregate amount of investments rated 6 by the SVO then held by\nthe insurer would exceed one percent (1%) of its admitted assets; or\n5. The aggregate amount of medium and lower grade investments then held\nby the insurer that receive as cash i ncome less than the equivalent yield\nfor Treasury issues with a comparative average life, would exceed one\npercent (1%) of its admitted assets.\n(b) An insurer shall not acquire, directly or indirectly through an investment\nsubsidiary, an investment under KRS 304.7-405, 304.7-411, and 304.7-417, or\ncounterparty exposure under KRS 304.7 -419(4), if, as a result of and after\ngiving effect to the investment:\n1. The aggregate amount of medium and lower grade investments issued,\nassumed, guaranteed, accepted, or insured by any one (1) person or, as to\nasset-backed securities secured by or evidencing an interest in a single\nasset or pool of assets, then held by the insurer would exceed one\npercent (1%) of its admitted assets; or\n2. The aggregate amount of lower gra de investments issued, assumed,\nguaranteed, accepted, or insured by any one (1) person or, as to asset -\nbacked securities secured by or evidencing an interest in a single asset or\npool of assets, then held by the insurer would exceed one -half of one\npercent (0.5%) of its admitted assets.\n(c) If an insurer attains or exceeds the limit of any one (1) rating category referred\nto in this subsection, the insurer shall not thereby be precluded from ac quiring\ninvestments in other rating categories subject to the specific multicategory\nlimits applicable to those investments.\n(3) (a) An insurer shall not acquire, directly or indirectly through an investment\nsubsidiary, a Canadian investment authorized by this subtitle, if as a result of\nand after giving effect to the investment, the aggregate amount of these\ninvestments then held by the insurer would exceed forty percent (40%) of its\nadmitted assets, or if the aggregate amount of Canadian investments not\nacquired under KRS 304.7 -405(2) then held by the insurer would exceed\ntwenty-five percent (25%) of its admitted assets.\n(b) However, as to an insurer that is authorized to do business in Canada or that\nhas outstanding insurance, annuity, or reinsurance cont racts on lives or risks\nresident or located in Canada and denominated in Canadian currency, the\nlimitations of paragraph (a) of this subsection shall be increased by the greater\nof:\n1. The amount the insurer is required by Canadian law to invest in Canada\nor to be denominated in Canadian currency; or\n2. One hundred fifteen percent (115%) of the amount of its reserves and\nother obligations under contracts on lives or risks resident or located in\nCanada.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=16841","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:39Z","sha256":"bc842a997e281a4e00fc4c6b0d69393f4e57ae4e33fcd8ebe3992959daec1809","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.7-401","next":"us-ky/krs-304.7-405"},"notice":"GroundRules: Original legal text. Not legal advice."}