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Schedule 4

Revised Laws of Saint Lucia (2023)

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Schedule 4

(Sections 93, 153)

INVESTMENT OF POLICY-HOLDER RESERVES

A.   ASSETS IN WHICH THE POLICY HOLDER RESERVES MAY BE INVESTED

A company in respect of its policy-holder reserves, and the trustees of a pension fund plan, may invest in assets of the following classes—

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    1.   Bonds and debentures—

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      (a)     The bonds, debentures and other evidence of indebtedness of or guaranteed by the Government of—

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        (i)     Saint Lucia;

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        (ii)     any CARICOM Country;

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        (iii)     any country with a minimum credit rating of BBB+ or equivalent, or

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        (iii)     any other country approved by the Minister.

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      (b)     The bonds, debentures and other evidence of indebtedness of a corporation incorporated in Saint Lucia which either—

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        (i)     established by statute to administer on behalf of the State a utility in Saint Lucia where its recurrent income is sufficient to meet its operation, maintenance and debt service charges, or

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        (ii)     fully secured by a statutory charge upon real estate or upon plant and equipment or other tangible assets of the corporation used in the transaction of its business.

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      (c)     The bonds, debentures and other evidence of indebtedness of a corporation incorporated outside of CARICOM and traded on a recognised stock exchange with a minimum investment grade of BBB+ or equivalent.

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      (c)     The bonds, debentures or other securities of, or those guaranteed by the Caribbean Development Bank, or any other international financial institution approved by the Minister.

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    (Amended by S.I. 125/2002 and substituted by S.I. 52/2013)

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    2.   Ordinary and Preference Shares—

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      (a)     The fully-paid ordinary shares, bonds, debentures or other evidence of indebtedness of a company incorporated in Saint Lucia or in any Commonwealth Caribbean State, which during a period of the previous 5 years prior to the date of purchase, has either paid a dividend in each year upon its ordinary shares or had earnings in each such year available for the payment of a dividend upon such shares of at least 4% of the market value of those shares.

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      (b)     The fully-paid ordinary shares or preference shares of a company incorporated outside of CARICOM and traded on a recognised stock exchange with a minimum investment grade of BBB+ or equivalent.

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      (c)     Ordinary shares, preference shares, bonds or debentures of a company incorporated in Saint Lucia or in the Commonwealth Caribbean State and approved by the Minister.

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    (Substituted by S.I. 52/2013)

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    3.   Mortgages—

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      (a)     Mortgages on real estate or leaseholds in Saint Lucia where the amount of the loan does not exceed 75% of the value of the real estate.

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      (b)     A company or the trustees of a pension fund plan may invest in a mortgage where the amount of the loan does not exceed 90% but where the portion of the indebtedness in excess of 75% is guaranteed by an agency of, or directly by the Government of Saint Lucia, or by a company registered under the Insurance Act to carry on that class of insurance business.

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    4.   Real Estate—

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      (a)     Real Estate or leaseholds in Saint Lucia for the production of income where—

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        (i)     the lease is made to or guaranteed by the Government of Saint Lucia and provides for a net revenue sufficient to yield a reasonable interest return and to repay the amount invested over a period not exceeding 30 years,

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        (ii)     the real estate or leasehold has produced over the previous 3 years revenue sufficient to yield a reasonable interest return and to repay the amount invested for a period of the economic life time of the investment not exceeding 40 years;

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      (b)     Real estate in Saint Lucia required by the company for its use or occupation or reasonably required for the natural expansion of its business;

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      (c)     Real estate in Saint Lucia acquired by foreclosure of a mortgage on real estate where the mortgage qualifies as an investment under the Insurance Act.

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    5.   Deposit Certificates—

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    Deposits for fixed terms in—

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      (a)     any bank in Saint Lucia;

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      (b)     any financial institution licensed under the Banking Act; or

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      (c)     any other financial institution operating in Saint Lucia and approved by the Minister.

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    6.   Any other asset approved by the Minister. (Inserted by S.I. 60/1997)

B.   LIMITATIONS ON THE INVESTMENT OF POLICY-HOLDER RESERVES

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    1.   For the purpose of the investment of policy-holder reserves and of pension fund plans the following limitations shall apply—

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      (a)     Real Estate—

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           The total amount of investment in real estate shall not exceed 20% of a long term insurance fund or a pension fund plan. The Registrar may permit an investment in real estate to be included as part of a general insurance fund but this authority should not exceed 20% of a fund. In the case of pension fund plans the Registrar may, on the recommendation of an actuary permit investment in real estate to exceed 20% of the fund;

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      (b)     Mortgages—

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           A single mortgage included as an asset of a fund shall not exceed 10% of the total assets of the insurer;

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      (c)     Bonds and Debentures—

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           An insurer shall not invest in bonds and debentures on which payment of principal or interest is in default;

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      (d)     Ordinary Shares—

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        (i)     An insurer shall not invest more than 30% of a fund in ordinary shares,

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        (ii)     An insurer shall not purchase more than 30% of the ordinary shares in a corporation where those shares are to be included in an insurance fund;

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      (e)     Purchase of Life Insurance Company—

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           A long term insurer shall not purchase the shares of a company carrying on long term business where that investment is to be included in its insurance fund; (Amended by S.I. 52/2013)

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      (f)     the total amount of investment outside of CARICOM is in the case of—

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        (i)     a defined contribution pension fund plan, an amount not exceeding 20% of that fund,

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        (ii)     a defined benefit pension fund plan, an amount not exceeding 50% of that fund,

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        (iii)     an insurance fund, an amount not exceeding 20% of that fund.

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      (Inserted by S.I. 52/2013 and amended by S.I. 127/2022)

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    (Amended by S.I. 127/2022)

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    2.   For the purposes of paragraph 1(f)—

“defined benefit pension fund plan” means a pension plan that provides for benefits for a member of the defined pension plan on a predetermined basis, calculated by reference to another amount, such as the salary of the member of the defined benefit pension fund plan;

“defined contribution pension fund plan” means an arrangement where the benefits for a member are determined solely as a function of the amount that is provided by—

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    (a)     contributions made by or for the credit of the member;

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    (b)     interest earned and other gains and losses allocated to the member's account in the pension fund.

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    (Inserted by S.I. 127/2022)

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