The following factors shall be evaluated by the insurer and considered along with its business in determining whether an investment portfolio or investment policy is prudent; the commissioner shall consider the following factors prior to making a determination that an insurer's investment portfolio or investment policy is not prudent: (1) General economic conditions; (2) The possible effect of inflation or deflation; (3) The expected tax consequences of investment decisions or strategies; (4) The fairness and reasonableness of the terms of an investment considering its probable risk and reward characteristics and relationship to the investment portfolio as a whole; (5) The extent of the diversification of the insurer's investments among: (a) Individual investments; (b) Classes of investments; (c) Industry concentrations; (d) Dates of maturity; and (e) Geographic areas; (6) The quality and liquidity of investments in affiliates; (7) The investment exposure to the following risks, quantified in a manner consistent with the insurer's acceptable risk level identified in RCW 48.13.051(8): (a) Liquidity; (b) Credit and default; (c) Systemic (market); (d) Interest rate; (e) Call, prepayment, and extension; (f) Currency; (g) Foreign sovereign; and (h) Leverage; (8) The amount of the insurer's assets, capital, and surplus, premium writings, insurance in force, and other appropriate characteristics; (9) The amount and adequacy of the insurer's reported liabilities; (10) 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; (11) The adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer; and (12) Any other factors relevant to whether an investment is prudent.
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