§601.3. Insurer investment policy

            A. In acquiring, investing, exchanging, holding, selling, or managing investments, an insurer shall follow a written investment policy established by its board of directors which shall be reviewed and approved annually. There is no requirement for the form and substance of the investment policy, but it shall include written guidelines appropriate to the insurer's business as to all of the following:

            (1) The policies, procedures, and controls covering all aspects of the investing function, including compliance with this Subpart.

            (2) Quantified goals and objectives regarding the composition of classes of investments, including maximum internal limits.

            (3) Periodic evaluation of the investment portfolio as to risk and reward characteristics.

            (4) Professional standards for the individuals making day-to-day investment decisions to assure that investments are managed in an ethical and competent manner.

            (5) The types of investments to be made and those to be avoided based on their risk and reward characteristics and the insurer's level of experience with the investments.

            (6) The relationship of classes of investments to the insurer's insurance products and liabilities.

            (7) The level of risk appropriate for the insurer given the level of capitalization and expertise available to the insurer.

            (8) The evaluation and consideration of the following factors in determining whether an investment portfolio or investment policy is appropriate:

            (a) General economic conditions.

            (b) Effects of inflation or deflation.

            (c) Tax consequences of investment decisions or strategies.

            (d) Fairness and reasonableness of the terms of an investment considering its probable risk and reward characteristics and relationship to the entire investment portfolio.

            (e) The diversification of the insurer's investments among the following items:

            (i) Individual investments.

            (ii) Classes of investments.

            (iii) Industry concentrations.

            (iv) Dates of maturity.

            (v) Geographic areas.

            (f) The quality and liquidity of investments in affiliates.

            (g) The exposure to the following investment risks, quantified in a manner consistent with the insurer's acceptable risk level identified in Paragraph (7) of this Subsection:

            (i) Liquidity.

            (ii) Credit and default.

            (iii) Systemic (market).

            (iv) Interest rate.

            (v) Call, prepayment, and extension.

            (vi) Currency.

            (vii) Foreign sovereign.

            (h) The amount of the insurer's assets, capital and surplus, premium writings, insurance in force, and other appropriate characteristics.

            (i) The amount and adequacy of the insurer's reported liabilities.

            (j) The relationship of the expected cash flows of the insurer's assets and liabilities and the risk of adverse changes in the insurer's assets and liabilities.

            (k) The adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer.

            (l) Any other factors relevant to whether an investment is appropriate.

            B. The investment policy or information related to the investment policy provided to the commissioner for review pursuant to this Subpart shall be considered confidential and exempt from the provisions of law relative to public records as provided in R.S. 44:4.1(B)(11) and shall not be subject to subpoena pursuant to R.S. 22:1984(D).

            Acts 2021, No. 165, §1, eff. Jan. 1, 2022.