2001 Minnesota Statutes

     61A.28 Domestic companies, investments. 

    Subdivision 1.    Investment guidelines and procedures.  
 Each domestic life insurance company must comply with section 
 60A.112. 

    No investment or loan, except policy loans, shall be made 
 by a domestic life insurance company unless authorized or 
 approved by the board of directors or by a committee of 
 directors, officers, or employees of the company designated by 
 the board and charged with the duty of supervising the 
 investment or loan.  Accurate records of all authorizations and 
 approvals must be maintained. 

    The capital, surplus and other funds of every domestic life 
 insurance company, whether incorporated by special act or under 
 the general law (in addition to investments in real estate as 
 otherwise permitted by law) may be invested only in one or more 
 of the following kinds of securities or property.  An investment 
 may not be made under this section if the required interest 
 obligation is in default. 

    Investments must be valued in accordance with the valuation 
 procedures established by the National Association of Insurance 
 Commissioners, unless the commissioner requires or finds another 
 method of valuation reasonable under the circumstances.  Other 
 invested assets must be valued according to the procedures 
 promulgated by the National Association of Insurance 
 Commissioners, if not addressed in another section, unless the 
 commissioner requires or finds another method of valuation 
 reasonable under the circumstances. 

    Subd. 2.    Government obligations.  Bonds or other 
 obligations of, or bonds or other obligations insured or 
 guaranteed by:  (a) the United States or any state thereof; (b) 
 the Dominion of Canada or any province thereof; (c) any county, 
 city, town, statutory city formerly a village, organized school 
 district, municipality, or other civil or political subdivision 
 of this state, or of any state of the United States or of any 
 province of the Dominion of Canada; (d) any agency or 
 instrumentality of the foregoing, including but not limited to, 
 debentures issued by the federal housing administrator, 
 obligations of the Federal Home Loan Mortgage Corporation, the 
 Federal National Mortgage Association, the Government National 
 Mortgage Association; and (e) obligations payable in United 
 States dollars issued or fully guaranteed by the International 
 Bank for Reconstruction and Development, the Inter-American 
 Development Bank, the Asian Development Bank, the African 
 Development Bank, the Export-Import Bank, or any other United 
 States government sponsored organization of which the United 
 States is a member.  The life insurance company may not invest 
 in the obligations of these banks or organizations if the 
 investment causes the company's aggregate investments in the 
 obligations of any one of these banks or organizations to exceed 
 five percent of its admitted assets or if the investment causes 
 the company's aggregate investments in the obligations of all 
 banks or organizations described in clause (e) to exceed 15 
 percent of its admitted assets.  

    Subd. 3.    Loans or obligations secured by mortgage.  
 Loans or obligations (hereinafter loans) secured by a first 
 mortgage, or deed of trust (hereinafter mortgage), on improved 
 real estate in the United States, if the amount of the loan 
 secured thereby is not in excess of 66-2/3 percent of the market 
 value of the real estate at the time of the loan, or, when the 
 loan is to be fully amortized by installment payments of 
 principal, which may begin up to five years from the date of the 
 loan if the real estate is to be used for commercial purposes, 
 and interest at least annually over a period of not to exceed 40 
 years, the amount of the loan does not exceed (a) 80 percent of 
 the market value of the real estate at the time of the loan; (b) 
 90 percent of the market value of the real estate at the time of 
 the loan if the loan is secured by a purchase money mortgage 
 made in connection with the disposition of real estate acquired 
 pursuant to section 61A.31, subdivision 1, or, if (1) the real 
 estate is used for commercial purposes, and (2) the loan is 
 additionally secured by an assignment of lease or leases, and 
 (3) the lessee or lessees under the lease or leases, or a 
 guarantor or guarantors of the lessee's obligations, is a 
 corporation whose obligations would qualify as an investment 
 under subdivision 6, paragraph (e), and (4) the rents payable 
 during the primary term of the lease or leases are sufficient to 
 amortize at least 60 percent of the loan.  In calculating the 
 ratio of the amount of the loan to the value of the property, no 
 part of the amount of any loan is to be included which the 
 United States or any agency or instrumentality thereof or other 
 mortgage insurer as may be approved by the commissioner has 
 insured or guaranteed or made a commitment to insure or 
 guarantee; provided, in no event may the loan exceed the market 
 value of the property.  No improvement may be included in 
 estimating the market value of the real estate unless it is 
 insured against fire by policies payable to the security holder 
 or a trustee for its benefit.  This requirement may be met by a 
 program of self-insurance established and maintained by a 
 corporation whose debt obligations would qualify for purchase 
 under subdivision 6, paragraph (g), clause (4).  Also loans 
 secured by mortgage, upon leasehold estates in improved real 
 property where at the date of investment the lease has an 
 unexpired term of at least five years longer than the term of 
 the loan secured thereby, and where the leasehold estate is 
 unencumbered except by the lien reserved in the lease for the 
 payment of rentals and the observance of the other covenants, 
 terms and conditions of the lease and where the mortgagee, upon 
 default, is entitled to be subrogated to, or to exercise, all 
 the rights and to perform all the covenants of the lessee, 
 provided that no loan on the leasehold estate may exceed (a) 
 66-2/3 percent of the market value thereof at the time of the 
 loan, or (b) 80 percent of the market value thereof at the time 
 of the loan if the loan is to be fully amortized by installment 
 payments of principal which begin within five years from the 
 date of the loan if the leasehold estate is to be used for 
 commercial purposes, interest is payable at least annually over 
 the period of the loan which may not exceed 40 years and the 
 market value of the leasehold estate is shown by the sworn 
 certificate of a competent appraiser, or (c) 90 percent of the 
 market value of the leasehold estate at the time of the loan if 
 the loan is secured by a purchase money mortgage made in 
 connection with the disposition of real estate acquired pursuant 
 to section 61A.31, subdivision 1.  In calculating the ratio of 
 the amount of the loan to the value of the leasehold estate, no 
 part of the amount of any loan is to be included which the 
 United States or any agency or instrumentality thereof or other 
 mortgage insurer approved by the commissioner has insured or 
 guaranteed or made a commitment to insure or guarantee; 
 provided, in no event may the loan exceed the market value of 
 the leasehold estate.  Also loans secured by mortgage, which the 
 United States or any agency or instrumentality thereof or other 
 mortgage insurer approved by the commissioner has insured or 
 guaranteed or made a commitment to insure or guarantee.  Also 
 loans secured by mortgage, on improved real estate in the 
 Dominion of Canada if the amount of the loan is not in excess of 
 66-2/3 percent of the market value of the real estate at the 
 time of the loan, or, when the loan is to be fully amortized by 
 installment payments of principal, which may begin up to five 
 years from the date of the loan if the real estate is used for 
 commercial purposes, and interest at least annually over a 
 period of not to exceed 40 years, the amount of the loan does 
 not exceed (a) 80 percent of the market value of the real estate 
 at the time of the loan, or (b) 90 percent of the market value 
 of the real estate at the time of the loan if the loan is 
 secured by a purchase money mortgage made in connection with the 
 disposition of real estate acquired pursuant to section 61A.31, 
 subdivision 1.  In calculating the ratio of the amount of the 
 loan to the value of the property, no part of the amount of any 
 loan is to be included which the Dominion of Canada or any 
 agency or instrumentality thereof has insured or guaranteed or 
 made a commitment to insure or guarantee; provided in no event 
 may the loan exceed the market value of the property.  Also 
 loans secured by mortgage, on real estate in the United States 
 which may be unimproved provided there exists a definite plan 
 for commencement of development for commercial purposes within 
 not more than five years where the amount of the loan does not 
 exceed 80 percent of the market value of the unimproved real 
 estate at the time of the loan and the loan is to be fully 
 amortized by installment payments of principal, which may begin 
 up to five years from the date of the loan, and interest at 
 least annually over a period of not to exceed 40 years.  Also 
 loans secured by second mortgage on improved or unimproved real 
 estate used, or to be used, for commercial purposes; provided, 
 that if unimproved real estate there exists a definite plan for 
 commencement of development within not more than five years, in 
 the United States or the Dominion of Canada under the following 
 conditions:  (a) the amount of the loan secured by the second 
 mortgage is equal to the sum of the amount disbursed by the 
 company and the then outstanding indebtedness under the first 
 mortgage loan; and (b) the company has control over the payments 
 under the first mortgage indebtedness; and (c) the total amount 
 of the loan does not exceed 66-2/3 percent of the market value 
 of the real estate at the date of the loan or, when the note or 
 bond is to be fully amortized by installment payments of 
 principal, beginning not more than five years from the date of 
 the loan, and interest at least annually over a period of not to 
 exceed 40 years, the amount of the loan does not exceed 80 
 percent of the market value of the real estate at the date of 
 the loan. 

    A company may not invest in a mortgage loan authorized 
 under this subdivision, if the investment causes the company's 
 aggregate investments in mortgages secured by a single property 
 to exceed one percent of its admitted assets.  

    For purposes of this subdivision, improved real estate 
 includes real estate improved with permanent buildings, used for 
 agriculture or pasture, or income producing real estate, 
 including but not limited to, parking lots and leases, royalty 
 or other mineral interests in properties producing oil, gas, or 
 other minerals and interests in properties for the harvesting of 
 forest products.  

    A loan or obligation otherwise permitted under this 
 subdivision must be permitted notwithstanding the fact that it 
 provides for a payment of the principal balance prior to the end 
 of the period of amortization of the loan.  

    The vendor's equity in a contract for deed qualifies as a 
 loan secured by mortgage for the purposes of this subdivision. 

    Subd. 4. Repealed, 1991 c 325 art 9 s 13 

    Subd. 5. Repealed, 1991 c 325 art 9 s 13 

    Subd. 6.    Stocks, obligations, and other investments.  
 (a) Common stocks, common stock equivalents, or securities 
 convertible into common stock or common stock equivalents of a 
 business entity organized under the laws of the United States or 
 any state thereof, or the Dominion of Canada or any province 
 thereof.  

    (b) Preferred stock of, or common or preferred stock 
 guaranteed as to dividends by a business entity organized under 
 the laws of the United States or any state thereof, or the 
 Dominion of Canada or any province thereof, under the following 
 conditions:  (1) No investment may be made under this paragraph 
 in a stock upon which any dividend, current or cumulative, is in 
 arrears; (2) the company may not invest in stocks under this 
 paragraph and in common stocks under paragraph (a) if the 
 investment causes the company's aggregate investments in the 
 common or preferred stocks to exceed 25 percent of the company's 
 total admitted assets, provided that no more than 20 percent of 
 the company's admitted assets may be invested in common stocks 
 under paragraph (a); and (3) the company may not invest in any 
 preferred stock or common stock guaranteed as to dividends, 
 which is rated in the four lowest categories established by the 
 securities valuation office of the National Association of 
 Insurance Commissioners, if the investment causes the company's 
 aggregate investment in the lower rated preferred or common 
 stock guaranteed as to dividends to exceed five percent of its 
 total admitted assets.  

    (c) Warrants, options, and rights to purchase stock if the 
 stock, at the time of the acquisition of the warrant, option, or 
 right to purchase, would qualify as an investment under 
 paragraph (a) or (b), whichever is applicable.  A company shall 
 not invest in a warrant, option, or right to purchase stock if, 
 upon purchase and immediate exercise thereof, the acquisition of 
 the stock violates any of the concentration limitations 
 contained in paragraphs (a) and (b).  

    (d) In addition to amounts that may be invested under 
 subdivision 8 and without regard to the percentage limitation 
 applicable to stocks, warrants, options, and rights to purchase, 
 the securities of any face amount certificate company, unit 
 investment trust, or management type investment company, 
 registered or in the process of registration under the 
 Investment Company Act of 1940 as from time to time amended.  In 
 addition, the company may transfer assets into one or more of 
 its separate accounts for the purpose of establishing, or 
 supporting its contractual obligations under, the accounts in 
 accordance with the provisions of sections 61A.13 to 61A.21.  A 
 company may not invest in a security authorized under this 
 paragraph if the investment causes the company's aggregate 
 investments in the securities to exceed ten percent of its total 
 admitted assets, except that for a health service plan 
 corporation operating under chapter 62C, and for a health 
 maintenance organization operating under chapter 62D, the 
 company's aggregate investments may not exceed 20 percent of its 
 total admitted assets.  No more than five percent of the allowed 
 investment by health service plan corporations or health 
 maintenance organizations may be invested in funds that invest 
 in assets not backed by the federal government.  When investing 
 in money market mutual funds, nonprofit health service plans 
 regulated under chapter 62C, and health maintenance 
 organizations regulated under chapter 62D, shall establish a 
 trustee custodial account for the transfer of cash into the 
 money market mutual fund. 

    (e) Investment grade obligations that are:  

    (1) bonds, obligations, notes, debentures, repurchase 
 agreements, or other evidences of indebtedness of a business 
 entity, organized under the laws of the United States or any 
 state thereof, or the Dominion of Canada or any province 
 thereof; and 

    (2) rated in one of the four highest rating categories by 
 at least one nationally recognized statistical rating 
 organization, or are rated in one of the two highest categories 
 established by the securities valuation office of the National 
 Association of Insurance Commissioners. 

    (f) Noninvestment grade obligations:  A company may acquire 
 noninvestment grade obligations as defined in subclause (i) 
 (hereinafter noninvestment grade obligations) which meet the 
 earnings test set forth in subclause (ii).  A company may not 
 acquire a noninvestment grade obligation if the acquisition will 
 cause the company to exceed the limitations set forth in 
 subclause (iii). 

    (i) A noninvestment grade obligation is an obligation of a 
 business entity, organized under the laws of the United States 
 or any state thereof, or the Dominion of Canada or any province 
 thereof, that is not rated in one of the four highest rating 
 categories by at least one nationally recognized statistical 
 rating organization, or is not rated in one of the two highest 
 categories established by the securities valuation office of the 
 National Association of Insurance Commissioners. 

    (ii) Noninvestment grade obligations authorized by this 
 subdivision may be acquired by a company if the business entity 
 issuing or assuming the obligation, or the business entity 
 securing or guaranteeing the obligation, has had net earnings 
 after the elimination of extraordinary nonrecurring items of 
 income and expense and before income taxes and fixed charges 
 over the five immediately preceding completed fiscal years, or 
 its period of existence of less than five years, has averaged 
 not less than 1-1/4 times its average annual fixed charges 
 applicable to the period; provided, however, that if a business 
 entity issuing or assuming the obligation, or the business 
 entity securing or guaranteeing the obligation, has undergone an 
 acquisition, recapitalization, or reorganization within the 
 immediately preceding 12 months, or will use the proceeds of the 
 obligation for an acquisition, recapitalization, or 
 reorganization, then such business entity shall also have, on a 
 pro forma basis, for the next succeeding 12 months, net earnings 
 averaging 1-1/4 times its average annual fixed charges 
 applicable to such period after elimination of extraordinary 
 nonrecurring items of income and expense and before taxes and 
 fixed charges; no investment may be made under this section upon 
 which any interest obligation is in default. 

    (iii) Limitation on aggregate interest in noninvestment 
 grade obligations.  A company may not invest in a noninvestment 
 grade obligation if the investment will cause the company's 
 aggregate investments in noninvestment grade obligations to 
 exceed the applicable percentage of admitted assets set forth in 
 the following table:  

                                         Percentage of
             Effective Date              Admitted Assets
             January 1, 1992                  20
             January 1, 1993                  17.5
             January 1, 1994                  15

    Nothing in this paragraph limits the ability of a company 
 to invest in noninvestment grade obligations as provided under 
 subdivision 12. 

    (g) Obligations for the payment of money under the 
 following conditions:  (1) The obligation must be secured, 
 either solely or in conjunction with other security, by an 
 assignment of a lease or leases on property, real or personal; 
 (2) the lease or leases must be nonterminable by the lessee or 
 lessees upon foreclosure of any lien upon the leased property; 
 (3) the rents payable under the lease or leases must be 
 sufficient to amortize at least 90 percent of the obligation 
 during the primary term of the lease; and (4) the lessee or 
 lessees under the lease or leases, or a governmental entity or 
 business entity, organized under the laws of the United States 
 or any state thereof, or the Dominion of Canada, or any province 
 thereof, that has assumed or guaranteed any lessee's performance 
 thereunder, must be a governmental entity or business entity 
 whose obligations would qualify as an investment under 
 subdivision 2 or paragraph (e) or (f).  A company may acquire 
 leases assumed or guaranteed by a noninvestment grade lessee 
 unless the value of the lease, when added to the other 
 noninvestment grade obligations owned by the company, exceeds 15 
 percent of the company's admitted assets.  

    (h) A company may sell call options against stocks or other 
 securities owned by the company and may purchase call options in 
 a closing transaction against a call option previously written 
 by the company.  In addition to the authority granted by 
 paragraph (c), to the extent and on the terms and conditions the 
 commissioner determines to be consistent with the purposes of 
 this chapter, a company may purchase or sell other 
 exchange-traded call options, and may sell or purchase 
 exchange-traded put options.  

    (i) A company may not invest in a security or other 
 obligation authorized under this subdivision if the investment, 
 valued at cost at the date of purchase, causes the company's 
 aggregate investment in any one business entity to exceed two 
 percent of the company's admitted assets.  

    (j) For nonprofit health service plan corporations 
 regulated under chapter 62C, and for health maintenance 
 organizations regulated under chapter 62D, a company may invest 
 in commercial paper rated in one of the two highest rating 
 categories by at least one nationally recognized statistical 
 rating organization, or rated in one of the two highest 
 categories established by the securities valuation office of the 
 National Association of Insurance Commissioners, if the 
 investment, valued at cost at the date of purchase, does not 
 cause the company's aggregate investment in any one business 
 entity to exceed six percent of the company's admitted assets. 

    Subd. 7.    Transportation equipment obligations.  
 Equipment trust obligations or certificates which are adequately 
 secured or other adequately secured instruments evidencing an 
 interest in transportation equipment purchased, leased, or under 
 contract for purchase or lease by a corporation incorporated in 
 the United States or in Canada or by a receiver or trustee of 
 such corporation and a right to receive determined portions of 
 rental, purchase or other fixed obligatory payments for the use 
 or purchase of such transportation equipment.  

    Subd. 8.    Asset backed arrangements.  Investments in 
 asset backed arrangements that meet the definitions and credit 
 criteria provided in this subdivision.  For purposes of this 
 subdivision, "asset backed arrangement" means a loan 
 participation or loan to or equity investment in a business 
 entity that has as its primary business activity the acquisition 
 and holding of financial assets for the benefit of its debt and 
 equity holders.  

    In order to qualify for investment under this subdivision:  

    (a) the investment in the asset backed arrangement must be 
 secured by or represent an undivided interest in a single 
 financial asset or a pool of financial assets; and 

    (b) either (1) at least 90 percent of the dollar value of 
 the financial assets held under the asset backed arrangement 
 qualifies for direct investment under this section; (2) the 
 investment in the asset backed arrangement is rated in one of 
 the four highest rating categories by at least one nationally 
 recognized statistical rating organization; or (3) the 
 investment in the asset backed arrangement is rated in one of 
 the two highest categories established by the securities 
 valuation office of the National Association of Insurance 
 Commissioners.  

    Examples of asset backed arrangements authorized by this 
 subdivision include, but are not limited to:  general and 
 limited partnership interests; participations under unit 
 investment trusts such as collateralized mortgage obligations 
 and collateralized bond obligations; shares in, or obligations 
 of, corporations formed for holding investment assets, and 
 contractual participation interests in a loan or group of loans. 

    A company may not invest in an asset backed arrangement if 
 the investment causes the company's aggregate investment in the 
 financial assets held under the asset backed arrangement to 
 exceed any of the concentration limits contained in this section.

    Subd. 9.    Obligations of trustees and receivers.  
 Certificates, notes, or other obligations issued by trustees or 
 receivers of any institution created or existing under the laws 
 of the United States or of any state, district, or territory 
 thereof, which, or the assets of which, are being administered 
 under the direction of any court having jurisdiction if such 
 obligation is adequately secured as to principal and interest; 
 the amount invested in the securities mentioned in this 
 subdivision shall not, at any time, exceed 25 percent of the 
 unassigned surplus and capital of the company.  

    Subd. 9a.    Hedging.  A domestic life insurance company 
 may enter into financial transactions solely for the purpose of 
 reducing the risk associated with assets and liabilities that 
 the company has acquired or incurred or has legally contracted 
 to acquire or incur, and not for speculative or other purposes.  
 For purposes of this subdivision, "financial transactions"  
 include, but are not limited to, futures, options to buy or sell 
 fixed income securities, repurchase and reverse repurchase 
 agreements, and interest rate swaps, caps, and floors.  This 
 authority is in addition to any other authority of the insurer.  

    Subd. 10.    Real estate sales contracts.  Real estate 
 sales contracts to which the company is not an original party, 
 involving unencumbered real property situated in the United 
 States, having a value of at least 50 percent more than the 
 amount of the unpaid balance of the contract, same to be 
 assigned or otherwise transferred to the company or to a trustee 
 or nominee of its choosing.  No improvement shall be included in 
 estimating the value unless the same shall be insured against 
 fire by policies payable to and held by the company or a trustee 
 or nominee for its benefit.  The foregoing provisions of this 
 subdivision shall not apply to real estate sales contracts to 
 which the company is an original party and shall not prohibit 
 the company from holding such contracts as an investment.  

    Subd. 11.    Policy loans.  Loans on the security of 
 insurance policies issued by itself to an amount not exceeding 
 the loan value thereof; and loans on the pledge of any of the 
 securities eligible for investment under the provisions of 
 subdivisions 2 to 10, with the exception of noninvestment grade 
 obligations as defined in subdivision 6, paragraph (f), but not 
 exceeding 95 percent of the value of securities enumerated in 
 subdivisions 2, 3, and 4 and 80 percent of the value of stocks 
 and other securities; in case of securities enumerated in 
 subdivisions 3, 5, and 10 "value" means principal amount unpaid 
 thereon and in case of other securities market value thereof; in 
 case of securities enumerated in subdivisions 3 and 10 the 
 pledge agreement shall require principal payments by the pledgor 
 at least equal to and concurrent with principal payments on the 
 pledged security; in loans authorized by this subdivision, 
 except as otherwise provided by law in regard to policy loans, 
 the company shall reserve the right at any time to declare the 
 indebtedness due and payable when in excess of such proportions 
 of value or, in case of pledge of securities other than those 
 enumerated in subdivisions 3 and 10, upon depreciation of 
 security.  In the case of securities enumerated in subdivision 
 8, the provision of this subdivision must be applied in 
 accordance with the type of security subject to the asset backed 
 arrangement. 

    Subd. 12.    Additional investments.  Investments of any 
 kind, without regard to the categories, conditions, standards, 
 or other limitations set forth in the foregoing subdivisions and 
 section 61A.31, subdivision 3, except that the prohibitions in 
 clause (d) of subdivision 3 remains applicable, may be made by a 
 domestic life insurance company in an amount not to exceed the 
 lesser of the following: 

    (1) Five percent of the company's total admitted assets as 
 of the end of the preceding calendar year, or 

    (2) Fifty percent of the amount by which its capital and 
 surplus as of the end of the preceding calendar year exceeds 
 $675,000.  Except as provided in section 61A.281, a company's 
 total investment under this section in the common stock of any 
 corporation, other than the stock of the types of corporations 
 specified in section 61A.284, may not exceed ten percent of the 
 common stock of the corporation.  No investment may be made 
 under the authority of this clause or clause (1) by a company 
 that has not completed five years of actual operation since the 
 date of its first certificate of authority.  

    If, subsequent to being made under the provisions of this 
 subdivision, an investment is determined to have become 
 qualified or eligible under any of the other provisions of this 
 chapter, the company may consider the investment as being held 
 under the other provision and the investment need no longer be 
 considered as having been made under the provisions of this 
 subdivision.  

    In addition to the investments authorized by this 
 subdivision, with the written order of the commissioner, a 
 domestic life insurance company may make qualified investments 
 in any other type of investment or exceed any limitations of 
 quality, quantity, or percentage of admitted assets contained in 
 this section, section 61A.29 or 61A.31, or other provision 
 governing the investments of a domestic life insurance company.  
 This approval is at the discretion of the commissioner, provided 
 that the additional investments allowed by the commissioner's 
 written order may not exceed five percent of the company's 
 admitted assets.  

    Subd. 13.    Additional limitations.  Under the 
 standards and procedures in sections 60G.20 to 60G.22 for 
 individual insurers, the commissioner may impose additional 
 limitations on all insurers on the types and percentages of 
 investments as the commissioner determines necessary to protect 
 and ensure the safety of the general public. 

    Subd. 14.    Replication transactions.  An insurer 
 engaging in replication transactions shall include all 
 replicated investment positions in calculating compliance with 
 the limitations on investments applicable to the insurer.  
 Replication transactions are permitted only under the authority 
 of subdivision 12.  For these purposes, "replication 
 transaction" means a derivative transaction that is intended to 
 replicate the performance of one or more assets that an insurer 
 is authorized to acquire under applicable law.  A derivative 
 transaction that either is authorized by subdivision 6, 8, or 9a 
 or section 61A.29, subdivision 2, paragraph (d), or is entered 
 into as a hedging transaction shall not be considered a 
 replication transaction.  "Replicated investment position" means 
 the statement value of the position reported under the heading 
 "Replicated (Synthetic) Asset" on Schedule DB, Part F, of the 
 annual statement of the insurer, or any successor provision. 

    HIST: 1967 c 395 art 2 s 28; 1969 c 494 s 12-16; 1971 c 816 s 
 1,2; 1973 c 123 art 5 s 7; 1974 c 64 s 6; 1975 c 141 s 1; 1981 c 
 211 s 32-34; 1983 c 340 s 12-14; 1984 c 382 s 4; 1985 c 147 s 1; 
 1987 c 337 s 43; 1991 c 325 art 9 s 1-9; 1992 c 540 art 2 s 13; 
 1994 c 425 s 9,10; 1998 c 328 s 1-3; 2001 c 131 s 12,13