{"data":{"id":"us-ky/krs-304.7-405","jurisdiction":"us-ky","citation":"KRS 304.7-405","heading":"Rated credit instruments.","body":"Subject to the limitations of subsection (6) of this section, an insurer may acquire rated\ncredit instruments:\n(1) Subject to the limitations of KRS 304.7 -403(2), but not the limitations of KRS\n304.7-403(1), an insurer may acquire rated credit instruments issued, assumed,\nguaranteed, or insured by:\n(a) The United States; or\n(b) A government sponsored enterprise of the United States, if the instruments of\nthe government sponsored enterprise are assumed, guaranteed, or insured by\nthe United States, or are oth erwise backed or supported by the full faith and\ncredit of the United States.\n(2) (a) Subject to the limitations of KRS 304.7 -403(2), but not to the limitations of\nKRS 304.7 -403(1), an insurer may acquire rated credit instruments issued,\nassumed, guaranteed, or insured by:\n1. Canada; or\n2. A government sponsored enterprise of Canada, if the instruments of the\ngovernment sponsored enterprise are assumed, guaranteed, or insured by\nCanada or are otherwise backed or supported by the full faith and credit\nof Canada;\n(b) However, an insurer shall not acquire an instrument under this subsection if,\nas a result of and after giving effect to the investment, the aggregate amount of\ninvestments then held by the insurer under this subsection would exceed forty\npercent (40%) of its admitted assets.\n(3) (a) Subject to the limitations of KRS 304.7 -403(2), but not to the limitations of\nKRS 304.7-403(1), an insurer may acquire rated credit instruments, excluding\nasset-backed securities:\n1. Issued by a government money market mutual fund, a class one money\nmarket mutual fund, or a class one bond mutual fund;\n2. Issued, assumed, guaranteed, or insured by a government sponsored\nenterprise of the United States other than those eligible under subsection\n(1) of this section;\n3. Issued, assumed, guaranteed, or insured by a state, if the instruments are\ngeneral obligations of the state; or\n4. Issued by a multilateral development bank;\n(b) However, an insurer shall not acquire an instrument of any one (1) fund, any\none (1) enterpris e or entity, or any one (1) state under this subsection if, as a\nresult of and after giving effect to the investment, the aggregate amount of\ninvestments then held in any one (1) fund, enterprise, entity, or state under this\nsubsection would exceed ten percent (10%) of its admitted assets.\n(4) Subject to the limitations of KRS 304.7 -403, an insurer may acquire preferred\nstocks that are not foreign investments and that meet the requirements of rated\ncredit instruments if, as a result of and after giving effect to the investment;\n(a) The aggregate amount of preferred stocks then held by the insurer under this\nsubsection does not exceed twenty percent (20%) of its admitted assets; and\n(b) The aggregate amount of preferred stocks then held by the insurer under t his\nsubsection which are not sinking fund stocks or rated P1 or P2 by the SVO\ndoes not exceed ten percent (10%) of its admitted assets.\n(5) Subject to the limitations of KRS 304.7 -403, in addition to those investments\neligible under subsections (1) to (4) of this section, an insurer may acquire rated\ncredit instruments that are not foreign investments.\n(6) An insurer shall not acquire special rated credit instruments under this section if, as\na result of and after giving effect to the investment, the aggreg ate amount of special\nrated credit instruments then held by the insurer would exceed five percent (5%) of\nits admitted assets.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=16842","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:39Z","sha256":"8c1a658a5aa0fb524eb6c8bbd3e17a14e4aac24b649b1e5a32c39fe444792125","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.7-403","next":"us-ky/krs-304.7-407"},"notice":"GroundRules: Original legal text. Not legal advice."}