The following factors shall be evaluated by the insurer and considered along with its business in determining whether an investment portfolio or investment policy is prudent; the commissioner shall consider the following factors prior to making a determination that an insurer's investment portfolio or investment policy is not prudent:
(1) General economic conditions;(2) The possible effect of inflation or deflation;(3) The expected tax consequences of investment decisions or strategies;(4) The fairness and reasonableness of the terms of an investment considering its probable risk and reward characteristics and relationship to the investment portfolio as a whole;(5) The extent of the diversification of the insurer's investments among:(a) Individual investments;(b) Classes of investments;(c) Industry concentrations;(d) Dates of maturity; and(6) The quality and liquidity of investments in affiliates;(7) The investment exposure to the following risks, quantified in a manner consistent with the insurer's acceptable risk level identified in RCW 48.13.051(8): (e) Call, prepayment, and extension;(g) Foreign sovereign; and(8) The amount of the insurer's assets, capital, and surplus, premium writings, insurance in force, and other appropriate characteristics;(9) The amount and adequacy of the insurer's reported liabilities;(10) The relationship of the expected cash flows of the insurer's assets and liabilities, and the risk of adverse changes in the insurer's assets and liabilities;(11) The adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer; and(12) Any other factors relevant to whether an investment is prudent.Added by 2011 c 188,§ 5, eff. 7/1/2012.