20-552.01. Canadian investments; definition

A. An insurer may make investments in securities of or in Canada possessing characteristics and of a quality similar to those required pursuant to this article for investments in the United States.

B. Subject to subsections C, D and E of this section, an insurer shall not acquire, directly or indirectly through an investment subsidiary, a Canadian investment otherwise permitted under this article, if after giving effect to the investment, the aggregate amount of Canadian investments then held by the insurer would exceed twenty-five per cent of its admitted assets.

C. As to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subsection B of this section shall be increased by the greater of:

1. The amount the insurer is required by applicable Canadian law to invest in Canada or to be denominated in Canadian currency.

2. One hundred fifteen per cent of the amount of the insurer's reserves and other obligations under contracts on lives or risks resident or located in Canada.

D. An insurer shall not acquire an investment in Canadian common stock, or shares of any solvent institution created or existing under the laws of Canada, any province of Canada, or any political subdivision of Canada or a province of Canada if, after giving effect to the investment, the aggregate amount of the investments then held by the insurer would exceed twenty per cent of its admitted assets.

E. An insurer shall not acquire an investment in bonds, notes or other evidences of indebtedness that are secured by second mortgages or deeds of trust on improved real property located in Canada if, after giving effect to the investment, the aggregate amount of such investments then held by the insurer would exceed twenty per cent of its admitted assets.

F. For the purposes of this section, unless the context otherwise requires, " investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this article applicable to the insurer. For the purposes of this subsection, " total investment of the insurer" includes:

1. Direct investment by the insurer in an asset.

2. The insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary.