Vermont § 3461a - General limitations and diversification requirements for property and casualty, financial guaranty and mortgage guaranty insurers

§ 3461a. General limitations and diversification requirements for property and casualty, financial guaranty and mortgage guaranty insurers

• (a) General five percent diversification. (1) Except as otherwise specified in this subchapter, a domestic property and casualty,
  financial guaranty or mortgage guaranty insurer shall not acquire directly or indirectly
  through an investment subsidiary an investment under this subchapter if, as a result
  of and after giving effect to the investment, the insurer would hold more than five
  percent of its admitted assets in investments of all kinds issued, assumed, accepted,
  insured, or guaranteed by a single person. (2) This five percent limitation shall not apply to the aggregate amounts insured by a
  single financial guaranty insurer with the highest generic rating issued by a nationally
  recognized statistical rating organization. (3) Asset-backed securities shall not be subject to the limitations of subdivision (1)
  of this subsection; however, an insurer shall not acquire an asset-backed security
  if, as a result of and after giving effect to the investment, the aggregate amount
  of asset-backed securities secured by or evidencing an interest in a single asset
  or single pool of assets held by a trust or other business entity then held by the
  insurer would exceed five percent of its admitted assets. (b) An insurer subject to this section shall comply with applicable regulations addressing
  investments in lower and medium grade obligations. (c) Canadian investments. (1) An insurer subject to this section shall not acquire, directly or indirectly through
  an investment subsidiary, any Canadian investments authorized by this subchapter,
  if, as a result of and after giving effect to the investment, the aggregate amount
  of these investments then held by the insurer would exceed 40 percent of its admitted
  assets or if the aggregate amount of Canadian investments not acquired under subdivision
  3461c(2) of this subchapter then held by the insurer would exceed 25 percent of its
  admitted assets. (2) However, as to an insurer that is authorized to do business in Canada or that has
  outstanding insurance, annuity or reinsurance contracts on lives or risks resident
  or located in Canada and denominated in Canadian currency, the limitations of subdivision
  (1) of this subsection shall be increased by the greater of: (A) the amount the insurer is required by Canadian law to invest in Canada or to be denominated
  in Canadian currency; or (B) 125 percent of the amount of its reserves and other obligations under contracts on
  risks resident or located in Canada. (Added 1999, No. 84 (Adj. Sess.), § 2, eff. April 19, 2000.)