Ins 6.20(6)(g)1.c. c. $300,000.

Ins 6.20(6)(g)2. 2. A town mutual insurer shall divest of any investment which does not meet the requirements of pars. (b) to (f) due to decline in the rating of a bond, the insurer’s size, limitations on investments or any other reason, within three years of its noncompliance.

Ins 6.20(6)(g)3. 3. If at the time of purchase a town mutual insurer investment did not meet the requirements of pars. (b) to (f), then the town mutual insurer shall immediately divest of the investment.

Ins 6.20(6)(h) (h) Authorization of investments by the board of directors.

Ins 6.20(6)(h)1. 1. The board of directors of a town mutual shall adopt a written plan for acquiring and holding investments and for engaging in investment practices which specifies guidelines as to the quality, maturity, diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs and the amount of its surplus. The board shall review and assess the company’s technical and administrative capabilities and expertise with regard to investments before adopting a written plan concerning any investment strategy or investment practice. The board shall give due consideration to all commissions and expenses associated with each investment, and the effect of such costs on anticipated returns and on liquidity.

Ins 6.20(6)(h)2. 2. All investments acquired and held under this section shall be acquired and held under the supervision and direction of the board of directors of the town mutual insurer. The town mutual insurer board of directors shall require that all investments be authorized or approved by the board or a committee of the board charged with the responsibility to supervise and direct its investments in accordance with delegations, standards, limitations, and investment objectives prescribed by the board.

Ins 6.20(6)(h)3. 3. For all mutual funds held by a town mutual insurer, the insurer shall maintain in its records the fund’s prospectus and latest issued annual financial statement.

Ins 6.20(6)(h)4. 4.

Ins 6.20(6)(h)4.a. a. If a town mutual insurer utilizes the services of an investment advisor, the town mutual shall have, and maintain, a written agreement with the investment advisor, that shall be approved by the board of directors. A separate agreement shall be entered into for each specific arrangement.

Ins 6.20(6)(h)4.b. b. Each written agreement with an investment advisor shall include a description of the scope and nature of the services to be provided; the standard of care to be provided; how or whether the investment strategy, including asset allocations, and any applicable limitations, incorporates the board approved investment policy; the level of authority the advisor exercises over the insurer’s portfolio, whether discretionary or non-discretionary; a description of all types of compensation to the investment advisor; and a description as to how investment transactions, holdings, and portfolio performance will be communicated to the company’s board of directors, including the frequency, content and means of reporting.

Ins 6.20(6)(h)4.c. c. An agreement under subd. 4. b. shall clearly state whether the investment advisor is, or is not, acting as a fiduciary with respect to the town mutual insurer. A fiduciary is someone whose conduct is subject to the fiduciary duty standard, as defined under applicable rules, regulations, or standards of conduct promulgated by the U.S. securities and exchange commission.

Ins 6.20(6)(i) (i) Custody. In addition to the requirements of s. 610.23, Stats., the shares of any mutual fund in which a town mutual insurer invests may be held in the direct custody of the town mutual insurer, and the shares must be maintained either in book entry form with the mutual fund’s registrar and transfer agent, or in certificate form. If the town mutual insurer does not have direct custody of the shares, the shares shall be held in the custody of a bank or bank and trust company.

Ins 6.20(7) (7) Bonds permissible. Bonds permissible under s. 620.22 (1), Stats., include:

Ins 6.20(7)(a) (a) Direct obligations of the United States or Canada, or of other governmental units therein;

Ins 6.20(7)(b) (b) Obligations payable from and adequately secured by specifically pledged revenues of such governmental units or their instrumentalities, including corporations owned by or operated for such units; and

Ins 6.20(7)(c) (c) Evidences of indebtedness of any solvent corporation of the United States or Canada.

Ins 6.20(8) (8) Additional authorized investments. An insurer may, in addition to investments authorized by s. 620.22 (1) to (7), Stats., invest its assets in the following classes of investments, up to the limits stated, and in the case of insurers that are subject to special restrictions under s. 620.03, Stats., in accordance with any other rules made applicable to them:

Ins 6.20(8)(a) (a) Mortgage bonds of farm loan banks authorized under the federal farm loan act, and debentures issued by the banks for cooperatives established pursuant to the farm credit act of 1933, as amended;

Ins 6.20(8)(b) (b) Equipment securities or certificates of any equipment trust evidencing rights to receive partial payments agreed to be made upon any contract of leasing or conditional sale;

Ins 6.20(8)(c) (c) The purchase and ownership of machinery or equipment, which is or will become subject to contracts for sale or use under which contractual payments may reasonably be expected to return the principal of and provide earnings on the investment within the anticipated useful life of the property which shall be not less than 5 years but the aggregate of such investments shall not exceed 3% of the insurer’s assets;

Ins 6.20(8)(d) (d) Loans upon the collateral security of any securities that the insurer could lawfully purchase, but not exceeding 90% of the market value of the securities up to an amount which, together with like securities owned, does not exceed the limits on the purchase of such securities;

Ins 6.20(8)(e) (e) Evidences of indebtedness not otherwise authorized of the kind which if held by a bank would be eligible for discount, rediscount, purchase or sale by federal reserve banks or other government agencies having similar powers and functions but the aggregate of such investments shall not exceed 1% of the insurer’s assets;

Ins 6.20(8)(f) (f) Shares of savings and loan associations to the extent that they are insured or guaranteed by the United States government or any agency thereof;

Ins 6.20(8)(g) (g) The cash surrender values of life insurance policies of companies authorized to do business in Wisconsin;

Ins 6.20(8)(h) (h) For a company authorized to transact a credit insurance business, the claims and demands that it has guaranteed;

Ins 6.20(8)(i) (i) For a company authorized to transact a title insurance business, materials and plant necessary for the convenient transaction of business — not exceeding 50% of minimum capital or 5% of assets, whichever is greater;

Ins 6.20(8)(L) (L) Direct obligations of the international bank for reconstruction and development, the inter-American development bank, the African development bank and the Asian development bank but the aggregate of such investments shall not exceed 2% of the insurer’s assets;

Ins 6.20(8)(n) (n) Shares of investment companies or investment trusts registered under the Federal Investment Company Act of 1940, 15 USC 80a-1 et seq., as amended — regarded as part of the common stock portfolio of the insurer.

Ins 6.20(8g) (8g) Foreign investments. An insurer, and in the case of insurers that are subject to special restrictions under s. 620.03, Stats., in accordance with any other rules applicable to them, may invest in foreign investments, in addition to investments authorized by s. 620.22 (1) to (7), Stats., that meet the following criteria and limitations: