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
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 in any country or corporation outside of CARICOM shall be limited to a maximum of 20% of a fund. (Inserted by S.I. 52/2013)