Extended Missouri Mutual Companies’ Approved Investments

PURPOSE: This rule implements the provisions of section 380.471, RSMo (Cum. Supp. 1990) defining the approved investments available to extended Missouri mutual companies organized under the provisions of sections 380.201–380.591, RSMo. (1) Approved Investments. In addition to the investments expressly permitted under section 380.471, RSMo, the following described investments shall be “approved by the director” under the provisions of section 380.471, RSMo: (A) Corporate bonds or bonds of any state of the United States other than Missouri or of any county or other political subdivision thereof, with the following ratings: 1. A3 or higher by Moody’s Investors Service; 2. A- or higher by Standard and Poor’s Ratings Group; or 3. A- or higher by Fitch Ratings; (B) Commercial paper with the following ratings: 1. P-1 by Moody’s Investors Service; 2. A-1 or higher by Standard and Poor’s Ratings Group; or 3. F1 or higher by Fitch Ratings; (C) Home office real estate having an asset value of no more than twenty-five percent (25%) of the surplus in excess of the guaranty fund(s) required by section 380.271.1, RSMo, but an extended Missouri mutual company may invest in home office real estate having an asset value greater than such twenty-five percent (25%) with the prior approval of the director; (D) Shares of mutual funds, if and to the extent that— 1. With respect to mutual funds other than money market mutual funds, such mutual fund: A. Is open-ended; and B. Invests by prospectus at least seventy percent (70%) of its funds in bonds described in section 380.471, RSMo, or in bonds described in subsection (1)(A) of this rule and paragraphs 1., 2., or 3. thereunder. 2. With respect to money market mutual funds, including money market deposit accounts of financial institutions: A. The shares of such money market mutual fund are insured as to principal and accrued interest by the Federal Deposit Insurance Corporation (FDIC) or an insurance company which is providing coverage for such fund that is substantially the same (other than as to dollar amount) as that provided by the FDIC and is authorized to underwrite financial guarantee insurance in this state; or B. Such money market mutual fund is rated as provided in paragraph 1., 2., or 3. of subsection (1)(A) of this rule; (E) Certificates of deposit and other deposit accounts, if and to the extent that such certificate or deposit account is: 1. Insured as to principal and accrued interest by the FDIC; or 2. Not insured by the FDIC, but only to the extent that the principal and accrued interest of such certificates are insured by an insurance company which is providing coverage for such certificates that is substantially the same (other than as to dollar amount) as that provided by the FDIC and is authorized to underwrite financial guarantee insurance in this state; and (F) Repurchase agreements from a United States depository secured by such depository’s pledge of securities consisting of bonds qualifying under subsection (1)(A) of this rule or section 380.471, RSMo, with a fair market value of at least one hundred two percent (102%) of the value of the repurchase agreement. (2) Limitations. The approved investments described in section (1) of this rule shall be subject to the following limitations: (A) No more than seven percent (7%) of an extended Missouri mutual’s total surplus may be invested in the bonds or commercial paper described in subsections (1)(A) and (B) in any one (1) issuer; (B) No more than fifty percent (50%) of an extended Missouri mutual’s total surplus may be invested in the aggregate in all bonds or commercial paper described in subsections (1)(A) and (B); (C) No more than ten percent (10%) of an extended Missouri mutual’s total surplus may be invested in any one (1) mutual fund described in paragraph (1)(D)1. of this rule; (D) No more than twenty percent (20%) of an extended Missouri mutual’s total surplus may be invested in the aggregate in all mutual funds described in paragraph (1)(D)1. of this rule; (E) No more than fifty percent (50%) of an extended Missouri mutual’s total surplus may be invested in the aggregate in all money market mutual funds described in paragraph (1) (D)2. of this rule, except that in computing such aggregate amount an extended Missouri mutual may exclude amounts it has invested in any money market mutual fund described in subparagraph (1)(D)2.A. AND INSURANCE (3) If an extended Missouri mutual makes an investment which was approved under section (1) of this rule when made, but such investment subsequently no longer qualifies as an approved investment under section (1) of this rule, the extended Missouri mutual shall either consider such investment as disapproved or make a request in writing to the director for approval within thirty (30) days after the end of the month in which such investment first no longer qualifies as an approved investment. The director shall approve or disapprove in writing, with or without conditions, such request within thirty (30) days of receipt. If the extended Missouri mutual makes a request for approval, such investment shall be considered an approved investment pending the director’s written approval or disapproval. (4) All extended Missouri mutual companies shall provide at least sixty (60)-days’ prior notice to the director of their intent to invest other than in accordance with the provisions of sections (1) through (3) of this rule or section 380.471, RSMo, and obtain the prior approval of the director prior to so investing. AUTHORITY: section 374.045, RSMo Supp. 2014, and sections 380.471 and 380.561, RSMo 2000.* Original rule filed Oct. 24, 1991, effective March 9, 1992. Amended: Filed June 14, 2001, effective Dec. 30, 2001. Amended: Filed Oct. 15, 2008, effective June 30, 2009. Amended: Filed Nov. 12, 2014, effective May 30, 2015. *Original authority: 374.045, RSMo 1967, amended 1993, 1995, 2008; 380.471, RSMo 1984, amended 1990; and 380.561, RSMo 1984, amended 1993, 1995.