(a) The purpose of this article is to protect the interests
of insureds by promoting insurer solvency and financial strength. This will be accomplished
through the application of investment standards that facilitate a reasonable balance of the
following objectives:
(1) To preserve principal;
(2) To assure reasonable diversification as to type of investment, issuer and credit quality;
and
(3) To allow insurers to allocate investments in a manner consistent with principles of
prudent investment management to achieve an adequaate return so that obligations to
insureds are adequately met and financial strength is sufficient to cover reasonably
foreseeable contingencies. l
(b) This article applies only to investments and investment practices of domestic insurers
and United States branches of alien insurers entered through this state. This article does not
apply to separate accounts of an insurer except as provided in article thirteen-a of this
chapter.
(c) This recodification of former article eight preserves and continues prior limitations
contained in section 106(a)(1) or (2) of the Secondary Mortgage Market Enhancement Act of
1984 ("SMMEA"), an act of the Congress of the United States adopted by the acts of the
Legislature in 1991 albeit under separate sections of the same article. Pursuant to section
106(b) of SMMEA, th is section prohibits domestic insurers from exercising the investment
authority granVted any person, trust, corporation, partnership, association, business trust or
business entity pursuant to section 106(a)(1) or (2) of that act.‹ Prev All West Virginia sections Next ›
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