§ 151.10. Investments.
(a) Funds of a provider which are permitted or required to be invested under the act shall be invested in good faith and with the degree of care that an ordinarily prudent individual in a like position would exercise under similar circumstances.
(1) Funds which are required to be invested shall include the entrance fees maintained in an escrow account, under section 12 of the act (40 P. S. § 3212).
(2) Funds which are permitted to be invested shall include liquid reserves established under section 9 of the act (40 P. S. § 3209), and reserve fund escrow accounts established under section 10 of the act (40 P. S. § 3210).
(b) The exercise of due care and prudence requires consideration of the following factors:
(1) The protection of the principal invested.
(2) The liquidity of the invested funds.
(3) The relationship between the maturity date of invested funds and the current liabilities.
(4) The anticipated investment yield.
(c) Liquid investments may include:
(1) Cash held in an interest-bearing account of a financial institution.
(2) The following if the instrument is easily converted to cash within a reasonable period of time:
(i) Certificates of deposit issued by a financial institution.
(ii) Money-market funds issued by a regulated investment company, as defined by section 405(b.1) of the Insurance Company Law of 1921 (40 P. S. § 505(b.1)) (Repealed).
(iii) Acceptable negotiable securities as defined in § 151.2 (relating to definitions).
(iv) Commercial paper in the form of promissory obligations of an issuer with an original maturity date not exceeding 9 months from the date of issuance, having the highest rating in a recognized rating publication.
(3) Securities which the provider can demonstrate are saleable with reasonable promptness at a price corresponding reasonably to fair value.
(d) For the purpose of determining whether the amounts held in investments satisfy the minimum amounts required by the act, liquid investments shall be valued at market value.
Source The provisions of this § 151.10 adopted March 15, 1985, effective March 16, 1985, 15 Pa.B. 1051.
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