R590. Insurance, Administration.R590-280. Counting Short-Term Funds.
R590-280-1. Authority.
This rule is promulgated by the commissioner pursuant to Sections 31A-2-201 and 31A-18-105.
R590-280-2. Purpose and Scope.
(1) The purpose of this rule is to define short-term funds as a permitted class of investment.
(2) This rule applies to an insurer authorized to do business in Utah.
R590-280-3. Definitions.
Terms used in this rule are defined in Sections 31A-1-301 and 31A-17-601. Additional terms are defined as follows:
(1) "SBA" means the United States Small Business Administration.
(2) "Short-term funds" means a sum of money that an insurer loans to an SBA borrower to fund the SBA borrower's anticipated use of SBA 504 loan proceeds where the insurer's loan is secured by a lien on real property or by any other form of collateral authorized by the commissioner.
R590-280-4. Requirements for Counting Short-Term Funds.
An insurer may count short-term funds for the purposes specified under Title 31A, Chapter 17, Part 6, Risk-Based Capital, if:
(1) the total amount of short-term funds, set forth in the insurer's annual or quarterly statutory financial statement that was last filed with the NAIC, does not exceed the following:
(a) 1.5% of the insurer's total assets determined under Subsection 31A-18-106(4); and
(b) 15% of the insurer's capital and surplus;
(2) the duration of each loan does not exceed 150 days;
(3) the insurer provides satisfactory proof of compliance with this rule, upon request;
(4) the filing of the insurer's most recent RBC report did not qualify as an action level event or as a control level event under Title 31A, Chapter 17, Part 6, Risk-Based Capital; and
(5) at the time of the insurer's loan to the SBA borrower, the insurer is not subject to administrative action under Title 31A, Chapter 27, Part 5, Administrative Actions.
R590-280-5. Severability.
If any provision of this rule, Rule R590-280, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.
KEY: insurance
Date of Last Change: January 10, 2023
Notice of Continuation: April 16, 2024
Authorizing, and Implemented or Interpreted Law: 31A-18-105(16); 31A-2-201(3)
