1. (1) An insurer shall consider the following factors to determine whether an investment portfolio or investment policy is prudent:

   1. (a) general economic conditions;
   2. (b) the possible effect of inflation or deflation;
   3. (c) the expected tax consequences of investment decisions or strategies;

   4. (d) the fairness or reasonableness of the terms of an investment considering the investment's:

      1. (i) probable risk and reward characteristics; and
      2. (ii) relationship to the investment portfolio as a whole;

   5. (e) the extent of the diversification of the insurer's investments among:

      1. (i) individual investments;
      2. (ii) classes of investments;
      3. (iii) industry concentrations;
      4. (iv) dates of maturity; and
      5. (v) geographic areas;
   6. (f) the quality and liquidity of investments in the insurer's affiliates;

   7. (g) the investment exposure to:

      1. (i) liquidity risk;
      2. (ii) credit and default risk;
      3. (iii) systemic risk;
      4. (iv) interest rate risk;
      5. (v) call, prepayment, and extension risk;
      6. (vi) exchange rate risk; and
      7. (vii) foreign sovereign risk;

   8. (h) the amount of the insurer's:

      1. (i) assets;
      2. (ii) capital and surplus;
      3. (iii) premium writings;
      4. (iv) insurance in force; and
      5. (v) other appropriate characteristics;
   9. (i) the insurer's reported liabilities;
   10. (j) the matching of the expected cash flows of the insurer's assets and liabilities;
   11. (k) the risk of adverse changes in the insurer's assets and liabilities; and
   12. (l) the adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer.
2. (2) The commissioner shall consider the factors described in Subsection (1) before making a determination that an insurer's investment portfolio or investment policy is not prudent.

Repealed and Re-enacted by Chapter 368, 2025 General Session