58-27-103. Investment in a collateralized pool of mortgages--Requirements--Restrictions. In addition to investment in mortgages in §§ 58-27-32 to 58-27-48, inclusive, an insurer may invest in obligations or certificates entitled to receive both principal and interest, or both principal and implied interest, from a pool collateralized by one or more commercial and residential mortgages. The collateral for the investments shall have been sold to and be currently owned by either a trust or institution established solely for the purpose of holding the mortgages or certificates for the benefit of the obligee. Any investment authorized under this section shall have a minimum quality rating of two by the Securities Valuation Office of the National Association of Insurance Commissioners and shall meet volatility standards. If at any time thereafter the quality rating drops below a rating of two the insurer is subject to § 58-27-90. The director shall promulgate rules pursuant to chapter 1-26 to set volatility standards and reporting requirements for investments under this section.
An insurer's investments authorized under this section may not exceed forty percent of its admitted assets. This restriction does not apply to obligations of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and those issued, assumed, guaranteed, or insured by the United States or a government sponsored enterprise of the United States, if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.
Any particular investment held by an insurer on February 7, 1995, under this section, which was a legal investment at the time it was made, and which is the type of investment the insurer was legally entitled to possess under this section immediately prior to February 7, 1995, is considered an eligible investment under this section. Any additional investment pursuant to this section may not be made if the total amount invested would at any time exceed forty percent of admitted assets.
Source: SL 1993, ch 364, § 2; SL 1994, ch 384, § 6; SL 1995, ch 285, § 2; SL 1995, ch 286; SL 1996, ch 299; SL 1997, ch 294, § 25.
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