Effective 28 Aug 2007

376.304. Acquisition of foreign investments, when. — 1. Subject to the limitations of section 376.297, an insurer may acquire foreign investments or engage in investment practices with persons of or in foreign jurisdictions of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than the type permitted under section 376.311 if as a result and after giving effect to the investment:

(1) The aggregate amount of foreign investments then held by the insurer under this subsection does not exceed twenty percent of the admitted assets; and

(2) The aggregate amount of foreign investments then held by the insurer under this subsection in a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO "1" or three percent of its admitted assets as to any other foreign jurisdiction.

2. Subject to the limitations of section 376.297, an insurer may acquire investments or engage in investment practice denominated in foreign currencies whether or not they are foreign investments acquired under subsection 1 of this section or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency if as a result of and after giving effect to the transaction:

(1) The aggregate amount of investments then held by the insurer under this subsection denominated in foreign currencies does not exceed ten percent of its admitted assets; and

(2) The aggregate amount of investments then held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO "1" or three percent of its admitted assets as to any other foreign jurisdiction.

3. An investment shall not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under section 375.345 in which the business entity counterparty agrees to exchange or grants to the insurer the option to exchange all payments made on the foreign currency denominated investment, or amounts equivalent to the payments that are or will be due to the insurer in accordance with the terms of such investment, for United States currency during the period the contract or contracts are in effect to insulate the insurer from loss caused by diminution of the value of payments owed to the insurer due to future changes in currency exchange rates.

4. In addition to investments permitted under subsections 1 to 3 of this section, an insurer that is authorized to do business in a foreign jurisdiction and that has an outstanding insurance, annuity, or reinsurance contract on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire investments denominated in the currency of that jurisdiction subject to the limitations of section 376.297. However, investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of section 376.297 if those investments carry an SVO rating of "1" or "2". The aggregate amount of investments acquired by the insurer under this subsection shall not exceed the greater of:

(1) The amount the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or

(2) One hundred fifteen percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.

5. In addition to investments permitted under subsections 1 to 3 of this section, an insurer that is not authorized to do business in a foreign jurisdiction but which has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction, subject to the limitations of section 376.297. However, investments made under this subsection in obligations of foreign governments, their political subdivisions, and government sponsored enterprises shall not be subject to the limitations of section 376.297 if those investments carry an SVO rating of "1" or "2". The aggregate amount of investments acquired by the insurer under this subsection shall not exceed one hundred five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives and risks resident or located in the foreign jurisdiction.

6. Investments acquired under this section shall be aggregated with investments of the same type made under this chapter and in a similar manner for purposes of determining compliance with the limitations, if any, contained in this chapter. Investments in obligations of foreign governments, their political subdivisions, and government sponsored enterprises of these persons, except for those exempted under subsections 4 and 5 of this section, shall be subject to the limitations of section 376.297.

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(L. 2007 S.B. 66)