2005 Minnesota Statutes

     60L.04 Authorized investments. 

    Subdivision 1.    Authorization.  Subject to the 
 provisions of sections 60L.01 to 60L.15, an insurer may loan or 
 invest its funds, and may buy, sell, hold title to, possess, 
 occupy, pledge, convey, manage, protect, insure, and deal with 
 its investments, property, and other assets to the same extent 
 as any other corporation or other person under the laws of this 
 state or the United States. 

    Subd. 2.    Board of directors; duties.  With respect to 
 all of the insurer's investments, the board of directors of an 
 insurer shall exercise the judgment and care, under the 
 circumstances then prevailing, that persons of reasonable 
 prudence, discretion, and intelligence exercise in the 
 management of a like enterprise, not in regard to speculating 
 but in regard to the permanent disposition of their funds, 
 considering the probable income as well as the probable safety 
 of their capital.  Investments must be of sufficient value, 
 liquidity, and diversity to ensure the insurer's ability to meet 
 its outstanding obligations based on reasonable assumptions as 
 to new business production for current lines of business.  As 
 part of its exercise of judgment and care, the board of 
 directors shall take into account the prudence evaluation 
 criteria specified under section 60L.05. 

    Subd. 3.    Internal controls.  The insurer shall 
 establish and implement internal controls and procedures to 
 ensure compliance with investment policies and procedures to 
 ensure that: 

    (1) the insurer's investment staff and any consultants used 
 are reputable and capable; 

    (2) a periodic evaluation and monitoring process occurs for 
 assessing the effectiveness of investment policy and strategies; 

    (3) management's performance is assessed in meeting the 
 stated objectives within the investment policy; and 

    (4) appropriate analyses are undertaken of the degree to 
 which asset cash flows are adequate to meet liability cash flows 
 under different economic environments.  The analyses must be 
 conducted at least annually and make specific reference to 
 economic conditions. 

    Subd. 4.    Compliance.  Compliance with sections 60L.01 
 to 60L.15 is determined in light of the facts and circumstances 
 existing at the time of the insurer's decision or action and not 
 by hindsight. 

    HIST: 1998 c 319 s 4