§ 26-7-102 — Definitions of terms used in chapter; determination of net earnings

(a) As used in this chapter:
(i) "Fixed charges" means interest on funded and
unfunded debt amortization of debt discount and rentals for
leased properties;
(ii) "Institution" means corporations, joint-stock
associations and business trusts;
(iii) "Net earnings available for fixed charges"
means net income after deducting operating and maintenance
expenses, taxes, other than federal and state income taxes,
depreciation and depletion, but excluding extraordinary
nonrecurring items of income or expense appearing in the regular
financial statements of the institutions involved;
(iv) "Obligations" means bonds, debentures, notes or
other evidences of indebtedness;
(v) "Domestic jurisdiction" means the United States
and Canada and includes any state, province or political
subdivision of the United States or Canada;
(vi) "Foreign jurisdiction" means a jurisdiction
other than a domestic jurisdiction;
(vii) "Foreign investment" means an investment in a
foreign jurisdiction, or an investment in a person, real estate
or asset domiciled in a foreign jurisdiction. Each of the
following apply to this paragraph:
(A) An investment shall not be deemed to be
foreign if the issuing person, qualified primary credit source
or qualified guarantor is a domestic jurisdiction or a person
domiciled in a domestic jurisdiction, unless:
(I) The issuing person is a shell business
entity; and
(II) The investment is not assumed,
accepted, guaranteed or insured or otherwise backed by a
domestic jurisdiction or a person, that is not a shell business
entity, domiciled in a domestic jurisdiction.
(B) For purposes of this paragraph:
(I) "Qualified guarantor" means a guarantor
against which an insurer has a direct claim for full and timely
payment, evidenced by a contractual right for which an
enforcement action can be brought in a domestic jurisdiction;
(II) "Qualified primary credit source"
means the credit source to which an insurer looks for payment as
to an investment and against which an insurer has a direct claim
for full and timely payment, evidenced by a contractual right
for which an enforcement action can be brought in a domestic
jurisdiction;
(III) "Shell business entity" means a
business entity having no economic substance except as a vehicle
for owning interests in assets issued, owned or previously owned
by a person domiciled in a foreign jurisdiction.
(viii) "High grade investment" means a credit
instrument rated one (1) or two (2) by the securities valuation
office;
(ix) "Securities valuation office" means the
securities valuation office of the National Association of
Insurance Commissioners, or any successor office established by
the National Association of Insurance Commissioners.
(b) If net earnings are determined in reliance upon
consolidated earnings statements of parent and subsidiary
institutions, those net earnings shall be determined after
provision for income taxes of subsidiaries and after proper
allowance for minority stock interest if any. The required
coverage of fixed charges shall be computed on a basis including
fixed charges and preferred dividends of subsidiaries other than
those payable by the subsidiaries to the parent corporation or
to any other of the subsidiaries, except that if the minority
common stock interest in the subsidiary corporation is
substantial, the fixed charges and preferred dividends may be
apportioned in accordance with regulations the commissioner
prescribes.