§ 511.8 — Investment of funds

Iowa § 511.8

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 511: PROVISIONS APPLICABLE TO LIFE INSURANCE COMPANIES AND ASSOCIATIONS

Text

1. Definitions. As used in this section unless the context otherwise requires:
a. “Accounting practices and procedures manual” means the most recent edition of the
national association of insurance commissioner’s accounting practices and procedures
manual.
b. “Admitted assets” means the assets permitted to be reported as admitted assets
on an insurer’s most recent statutory financial statement required to be filed with the
commissioner. “Admitted assets” shall include reinsurance funds withheld. “Admitted
assets” shall not include assets held in nonguaranteed separate accounts.
c. “Affiliate of” means the same as defined in section 521A.1.
d. “Business entity” means a sole proprietorship, corporation, limited liability company,
association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy
or other similar form of business organization, whether organized for profit or not for profit.
e. “Capitalandsurplus”meansthesumofcapitalandsurplusofaninsurerthatisrequired
tobeshownonaninsurer’smostrecentstatutoryfinancialstatementrequiredtobefiledwith
the commissioner.
f. “Collateral loan” means an unconditional obligation for the payment of money that is
secured by the pledge of any assets or investments permitted under this section. A collateral
loan cannot be a mortgage loan, credit instrument, or other debt security as defined in this
subsection.
g. “Commissioner” means the commissioner of insurance.
h. “Credit instrument” means an investment that is qualified as a bond under the
accounting practices and procedures manual, such as evidence of indebtedness of a
governmental unit or the instrumentality of the governmental unit, or of a private business
entity. “Credit instrument” includes asset-backed securities, bank loans, and SVO-listed
funds that have an SVO designation, and that qualify as a bond under the manual.
i. “Equity interest” means any of the following:
(1) A common stock.
(2) A trust certificate.
(3) AnequityinvestmentinaninvestmentcompanyotherthananSVO-listedfixedincome
or preferred stock fund.
(4) An investment in a common trust fund with a bank that is regulated by a federal or
state agency as trustee.
(5) An ownership interest in minerals, oil, or gas, the rights to which have been separated
from the underlying fee interest in the real estate where the minerals, oil, or gas are located.
(6) An instrument that is mandatorily, or at the option of the issuer, convertible to equity.
(7) A limited partnership interest or a general partnership interest as authorized under
subsection 4.
(8) An ownership interest in a limited liability company.
(9) A warrant or other right to acquire an ownership interest that is created by the person
that either owns or will issue the ownership interest to be acquired.
(10) An investment categorized as an equity interest under subsection 5.
j. “Foreign investment” means an investment in a foreign jurisdiction, or an investment in

an entity, real estate, or asset domiciled in a foreign jurisdiction. “Foreign investment” shall
not include any of the following:
(1) An asset for which the issuing person or guarantor is the United States or Canada, or
is domiciled in the United States or Canada.
(2) An asset for which the issuing person is domiciled in a foreign jurisdiction that has
a sovereign debt rating of SVO 1, and the issuing person is a fund or other investment
vehicle that invests, directly or indirectly, substantially all of its assets in investments which
are not foreign investments. If an insurer invests in an asset under this subparagraph, the
commissioner may require the insurer to disclose to the commissioner the investments held
by the fund or other investment vehicle.
k. “Hedging transaction” means a derivative transaction entered into and maintained by
an insurer to reduce any of the following:
(1) The risk of a change in the value, yield, price, cash flow, or quantity of assets or
liabilities which the insurer has acquired or incurred, or anticipates acquiring or incurring.
(2) Currency exchange rate risk or the degree of exposure as to assets or liabilities that
the insurer has acquired or incurred, or anticipates acquiring or incurring.
l. “Income generation transaction” means a derivative transaction that involves writing a
covered call option, covered put option, covered cap, or covered floor, and that is intended to
generate income or enhance return.
m. “Insurer” means a company organized as a life insurance company under chapter 508.
n. “Investment company” means an investment company as defined in section 3(a) of the
federal Investment Company Act of 1940, as amended, and as codified at 15 U.S.C. §80a-3 et
seq., and a person described in section 3(c) of the federal Investment Company Act.
o. “Investment subsidiary” means a subsidiary of an insurer that is engaged or organized
to engage exclusively in the ownership and management of assets authorized as investments
for the insurer.
p. “Lower grade investment” means a credit instrument that is designated 4, 5, or 6 by the
SVO.
q. “Medium grade investment” means a credit instrument that is designated 3 by the SVO.
r. “Mortgage loan” means an obligation secured by a mortgage, deed of trust, trust deed,
or other consensual lien on real estate. “Mortgage loan” includes a leasehold estate in real
property if fifty years or more of the term, including renewals, is unexpired.
s. “NAIC” means the national association of insurance commissioners.
t. “Nonguaranteed separate account” means a separate account for which the insurer’s
general account bears no risk related to performance of the separate account assets.
u. “Other debt security” means an investment in the form of a debt security that does not
qualify as a bond, however, the investment does qualify as an admissible asset under the
accounting practices and procedures manual.
v. “Person” means an individual, a business entity, a multilateral development bank,
or a governmental or quasi-governmental body such as a political subdivision or a
government-sponsored enterprise.
w. “Real estate” means any of the following:
(1) Real property.
(2) Interests in real property such as leaseholds, and minerals, oil, and gas that have not
been separated from the underlying fee interest.
(3) Improvements and fixtures located on or in the real property.
(4) The buyer’s equity in a contract providing for a sale of real estate.
(5) An investment categorized as real estate under subsection 5.
x. “Replication transaction” means a derivative transaction entered into in conjunction
with other investments in order to reproduce the investment characteristics of otherwise
permissible investments. “Replication transaction” does not include a derivative transaction
that is entered into as a hedging transaction.
y. “Securities valuation office” or “SVO” means the securities valuation office of the NAIC,
or a successor entity.
z. “Short-term investment” means a highly liquid investment or security that has a

remainingtermofmaturitybetweenninetydaysandthreehundredsixty-fivedays, andthatis
qualified as a short-term investment under the accounting practices and procedures manual.
2. Prudence evaluation criteria.
a. For all investments under this section, an insurer shall perform the insurer’s duties
in good faith and with the degree of care that persons of reasonable prudence in a similar
position exercise in a similar circumstance. The following factors shall be evaluated by
the insurer and considered along with the insurer’s business to determine if an investment
portfolio or an investment policy is prudent:
(1) General economic conditions.
(2) The expected tax consequences of an investment decision or strategy.
(3) The fairness and reasonableness of the terms of an investment in relation to the
investment’s risk and reward characteristics.
(4) The effect of an investment on the characteristics of the insurer’s investment portfolio
as a whole.
(5) The extent of the diversification of the insurer’s investments among all of the
following:
(a) Individual investments.
(b) Classes of investments.
(c) Industry concentrations.
(d) Issuers.
(e) Geographic areas.
(6) The economic substance of investments in affiliates.
(7) The investment exposure to each of the following risks, consistent with the insurer’s
acceptable risk level identified under subsection 3:
(a) Liquidity.
(b) Credit and default.
(c) Market.
(d) Interest rate, including duration and convexity.
(e) Currency.
(8) The amount of the insurer’s assets, premium writings and insurance in force, level of
capitalization, and other appropriate characteristics.
(9) The amount and adequacy of the insurer’s reported liabilities.
(10) The relationship, and the risk of adverse changes, of the expected cash flows of the
insurer’s assets and liabilities.
(11) The relationship, and the risk of adverse changes, of the valuation of the insurer’s
assets and liabilities.
(12) The insurer’s level of expertise with various types of investments.
(13) The ability of the insurer to model the underlying risks of an investment, with the
modeling commensurate with the complexity of the investment.
(14) Theoverallmaturityoftheinsurer’senterpriseriskmanagementandinvestmentrisk
management frameworks.
(15) The adequacy of the insurer’s capital and surplus to secure the liabilities of the
insurer in consideration of the risk and potential magnitude of adverse experience or
economic conditions.
(16) The professional standards required by the insurer for the individuals who make
day-to-day investment decisions on behalf of the insurer.
(17) Any other factors relevant to whether an investment is prudent.
b. The commissioner shall consider each of the factors in paragraph “a”, subparagraphs
(1) through (17), prior to making a determination that an insurer’s investment portfolio or
investment policy is not prudent.
3. Insurer investment policies. In acquiring, investing, exchanging, holding, selling, and
managing investments, an insurer shall establish and follow one or more written investment
policies that shall be annually reviewed and approved by the insurer’s board of directors
or the board of directors’ designee. The content and format of an insurer’s investment
policies are at the insurer’s discretion; however, the investment policies must include written

guidelines and controls appropriate to the insurer’s business. An insurer shall consider all
of the following:
a. Permissible asset types, including maximum or minimum internal limits regarding the
composition of classes of investments.
b. Periodic evaluation of the investment portfolio as to the portfolio’s risk and reward
characteristics.
c. The relationship of investments to the insurer’s insurance products and liabilities.
d. The manner in which the insurer intends to implement subsection 2.
e. The appropriate level of risk, based on quantitative measures, given the level of
capitalization and expertise available to the insurer.
4. Prohibited investments. An insurer shall not, directly or indirectly, do any of the
following:
a. Except as provided in subsection 5, invest in an obligation or security, or make a
guarantee for the benefit of or in favor of an officer or director of the insurer.
b. Except as provided in chapter 521A or subsection 5, invest in an obligation or security
of, make a guarantee for the benefit of or in favor of, or make other investments in, a business
entity in which ten percent or more of the voting securities or equity interests are owned
directly or indirectly by or for the benefit of one or more officers or directors of the insurer.
c. Engage on the insurer’s own behalf, or through one or more affiliates, in a transaction
or series of transactions intended to evade the prohibited investments under this subsection.
d. Act or invest as a general partner, with the following exceptions:
(1) If all other partners in the partnership are subsidiaries of the insurer.
(2) For the purpose of any of the following:
(a) Meeting cash calls committed to by the partnership prior to July 1, 2023.
(b) Completing specific projects or activities of the partnership in which the insurer was
a general partner before July 1, 2023, and that had been undertaken before July 1, 2023.
(c) Making capital improvements to property owned by the partnership before July 1,
2023, if the insurer was a general partner before July 1, 2023.
e. Notwithstanding paragraphs “c” and “d”, a subsidiary or an affiliate of an insurer shall
not be prohibited from acting or investing as a general partner.
f. (1) Invest in or lend the insurer’s funds upon the security of shares of the insurer’s own
stock, except that an insurer may acquire shares of its own stock for any of the following
purposes:
(a) Conversion of a stock insurer into a mutual or reciprocal insurer, or a mutual or
reciprocal insurer into a stock insurer.
(b) Issuance to the insurer’s officers, employees, or agents in connection with a plan
for converting a publicly held insurer into a privately held insurer, as approved by the
commissioner under section 508B.7, or in connection with other stock option and employee
benefit plans.
(c) In accordance with any other plan approved by the commissioner.
(2) Stocks acquired by an insurer under subparagraph (1) shall not be admitted assets of
the insurer.
5. Valuation and categorization of investments.
a. Unless otherwise specified in this section, the valuation and categorization of, or the
amount of, an insurer’s investment acquired or held under subsections 6 through 20, shall
be the classification and value at which the assets of an insurer are required to be reported
for statutory accounting purposes, as determined in accordance with the accounting and
valuation standards of the NAIC including all of the following:
(1) ThemostrecentlypublishedpurposesandproceduresmanualoftheNAICinvestment
analysis office, or any successor purposes and procedures adopted by the NAIC investment
analysis office.
(2) Themostrecentlypublishedvaluationofsecuritiesmanual,oranysuccessorvaluation
of securities procedures adopted by the NAIC.
(3) The most recently published accounting practices and procedures manual, or any
successor accounting practices and procedures adopted by the NAIC.

(4) The most recently published annual statement instructions, or any successor annual
statement instructions adopted by the NAIC.
(5) Any successor valuation procedures adopted by the NAIC.
b. Upon approval of the commissioner, an insurer’s investment in the equity interests of
a business entity whose primary purpose is to directly or indirectly invest in and maintain
assets and investments on behalf of the insurer and the insurer’s affiliates, or on behalf of
the insurer or the insurer’s affiliates, may be deemed to be the insurer itself investing in such
assets and investments of the business entity based on the insurer’s pro rata equity interest
in the business entity.
6. General five-percent diversification.
a. Except as otherwise specified in this section, an insurer shall not directly or indirectly
acquire an investment under this section if, as a result of and after giving effect to the
investment, the insurer will hold more than five percent of the insurer’s admitted assets in
investmentsofallkindsissued,assumed,accepted,insured,orguaranteedbyasingleperson.
b. Notwithstandingparagraph“a”,aninsurershallnotacquireanasset-backedsecurityif,
as a result of and after giving effect to the investment, the aggregate amount of asset-backed
securities secured by or evidencing an interest in a single asset or single pool of assets held
by a trust or other business entity then held by the insurer will exceed five percent of the
insurer’s admitted assets.
c. Notwithstanding paragraph “a”, an insurer shall not acquire a mortgage loan under
subsection 12 if, as a result of and after giving effect to the investment, the aggregate amount
of mortgage loans covering any one secured location will exceed five percent of the insurer’s
admitted assets.
7. Medium and lower grade investments.
a. An insurer shall not acquire an investment under this section, including counterparty
exposure net of collateral held, if, as a result of and after giving effect to the investment any
of the following apply:
(1) The aggregate amount of medium and lower grade investments then held by the
insurer will exceed twenty percent of the insurer’s admitted assets.
(2) Theaggregateamountoflowergradeinvestmentsthenheldbytheinsurerwillexceed
ten percent of the insurer’s admitted assets.
(3) The aggregate amount of investments designated 5 or 6 by the SVO then held by the
insurer will exceed three percent of the insurer’s admitted assets.
(4) Theaggregateamountofinvestmentsdesignated6bytheSVOthenheldbytheinsurer
will exceed one percent of the insurer’s admitted assets.
b. An insurer shall not acquire an investment under this section, including counterparty
exposure net of collateral held, if, as a result of and after giving effect to the investment all
of the following apply:
(1) The aggregate amount of medium and lower grade investments issued, assumed,
guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured
by or evidencing an interest in a single asset or pool of assets, then held by the insurer will
exceed one percent of the insurer’s admitted assets.
(2) The aggregate amount of lower grade investments issued, assumed, guaranteed,
accepted, or insured by any one person or, as to asset-backed securities secured by or
evidencing an interest in a single asset or pool of assets, then held by the insurer will exceed
one-half of one percent of the insurer’s admitted assets.
c. If an insurer attains or exceeds the limit of any one designation category under
this subsection, the insurer shall not be precluded from acquiring investments in other
designation categories, subject to the specific and multi-category limits applicable to each of
those investments.
8. Cash or cash equivalents. An insurer may acquire, without limitation, cash and cash
equivalents as such terms are defined in the accounting practices and procedures manual.
9. Credit instruments and short-term investments. An insurer may acquire the following
credit instruments and short-term investments subject to all of the following:
a. The following credit instruments acquired under this subsection shall be subject to
subsection 6 and subsection 7, but shall not be subject to subsection 6, paragraph “a”:

(1) Credit instruments issued, assumed, guaranteed, or insured by the United States or
Canada.
(2) Credit instruments issued, assumed, guaranteed, or insured by a
government-sponsored enterprise of the United States or Canada, if the credit instruments
are assumed, guaranteed, or insured by the United States or Canada, or are otherwise
backed or supported by the full faith and credit of the United States or Canada.
(3) Credit instruments, excluding asset-backed securities that are any of the following:
(a) Issued, assumed, guaranteed, or insured by a government-sponsored enterprise of a
government other than the United States or Canada.
(b) Issued, assumed, guaranteed, or insured by a state, if the instruments are general
obligations of the state.
b. Short-term investments acquired under this subsection shall be subject to subsection 6.
c. All other credit instruments acquired under this subsection shall be subject to
subsections 6 and 7.
d. Foreign investments acquired under this subsection shall be subject to subsection 15.
10. Equity interests. An insurer may acquire equity interests subject to all of the
following:
a. (1) An insurer shall not acquire an investment under this subsection, if, as a result of
and after giving effect to the investment, the aggregate amount of investments then held by
the insurer will exceed ten percent of the insurer’s admitted assets.
(2) Notwithstanding subparagraph (1), an insurer that files an annual statement pursuant
to section 508.11 and completes the NAIC’s health statement test shall not acquire an
investment under this subsection, if, as a result of and after giving effect to the investment,
the aggregate amount of investments then held by the insurer will exceed twenty-five percent
of the insurer’s admitted assets.
b. Foreign investments acquired under this subsection shall be subject to subsection 15.
c. Equity interests in subsidiary corporations, as authorized by section 508.33, shall be
eligible investments if the total investment does not exceed five percent of the insurer’s
admitted assets. Upon application to and approval of the commissioner, an insurer may
acquire additional equity interests in direct or indirect subsidiary insurance companies that
are domiciled in the United States, not to exceed an additional two percent of the insurer’s
admitted assets.
d. Inadditiontotheinvestmentsauthorizedinparagraphs“a”,“b”,and“c”,aninsurermay
acquire equity interests in subsidiary entities as permitted by, and as subject to the limitations
of, section 521A.2.
11. Tangible personal property.
a. An insurer may acquire obligations secured by tangible personal property that is under
contractofsaleorleaseforwhichcontractualpaymentsmayreasonablybeexpectedtoreturn
the principal of, and provide earnings on, the investment within the anticipated useful life of
the tangible personal property.
b. An insurer shall not acquire an obligation under paragraph “a”, if, as a result of and
after giving effect to the investment, the aggregate amount of investments then held by the
insurer under this subsection will exceed either of the following:
(1) Two percent of the insurer’s admitted assets.
(2) One-half of one percent of the insurer’s admitted assets as to any single item of
tangible personal property.
12. Mortgage loans.
a. An insurer may acquire obligations secured by a mortgage or deed of trust that is a first
or second lien upon otherwise unencumbered real estate, or upon leasehold estates in real
property if fifty years or more of the term including renewals is unexpired, or other similar
instruments, including mezzanine loans, either directly or through a business entity where
the business entity’s sole purpose is to hold mortgages that qualify for investment under this
subsection, provided all of the following apply:
(1) The amount loaned by the insurer, together with any amount secured by an equal or
priorsecurityinterest,whetheroftheinsureroranotherparty,doesnotexceedninetypercent
of the appraised value of the real estate and improvements at the time the insurer makes the

investment, as evidenced by a current qualified external appraisal or an internal appraisal
conducted using standards comparable to an external appraisal.
(2) The amount of an obligation required to be included in the calculation of the
loan-to-value ratio may be reduced to the extent the obligation is insured or guaranteed by
an agency of the United States government.
(3) A mezzanine loan acquired under this subsection shall not exceed four percent of an
insurer’s admitted assets.
b. This subsection shall not be construed to prevent any amount invested under this
subsection that exceeds ninety percent of the appraised value of the real estate from being
an authorized asset under subsection 10, paragraph “a”, or subsection 20, subject to the
limitations of subsection 10, paragraph “a”, and subsection 20.
13. Real estate.
a. An insurer may acquire real estate either directly or through certificates evidencing
participation with other investors.
b. An insurer may acquire real estate required for the insurer’s home offices, or to be
otherwise occupied by the insurer or the insurer’s employees in transacting the insurer’s
business, and the insurer may lease any unused space to other occupants. The value of
an insurer’s investments under this paragraph shall not exceed ten percent of the insurer’s
admitted assets.
c. Excluding investments under paragraph “b”, an insurer’s investments under this
subsection shall not exceed fifteen percent of the insurer’s admitted assets.
d. An insurer’s aggregate investments under this subsection and subsection 12 shall not
exceed forty-five percent of the insurer’s admitted assets.
14. Securities lending, repurchase, reverse repurchase, and dollar roll transactions. An
insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll
transactionswithbusinessentities,providedthattheinsurer’sboardofdirectors,ortheboard
of directors’ designee, adopts a written plan that is consistent with the insurer’s investment
policies under subsection 3, and that specifies guidelines and objectives including all of the
following:
a. A description of how any cash received will either be invested or used for the insurer’s
general corporate purposes.
b. Operational procedures to manage interest rate risk, counterparty default risk, the
conditions under which proceeds from repurchase transactions may be used in the ordinary
course of business, and the use of acceptable collateral in a manner that reflects the liquidity
needs of the transaction.
c. The extent to which the insurer may engage in transactions under this subsection.
15. Foreign investments. An insurer may acquire foreign investments, or engage in
investment practices with persons or business entities of or in foreign jurisdictions of
substantially the same types as those investments that an insurer is permitted to acquire
under this subsection, if, as a result and after giving effect to the investment the following
apply:
a. The aggregate amount of foreign investments then held by the insurer under this
subsection does not exceed twenty percent of the insurer’s admitted assets.
b. The aggregate amount of foreign investments under this subsection then held by the
insurer in a single foreign jurisdiction that has a sovereign debt rating of SVO 1 does not
exceed ten percent of the insurer’s admitted assets, or does not exceed three percent of the
insurer’s admitted assets as to any other foreign jurisdiction.
c. Investmentsacquiredunderthissubsectionshallbeaggregatedwithinvestmentsofthe
sametypemadeinasimilarmannerunderanyothersubsectionofthissectionforpurposesof
determiningcompliancewithanylimitationscontainedinanyothersubsectionofthissection.
d. This subsection shall not authorize investments issued, assumed, or guaranteed by a
foreign government which has engaged in a consistent pattern of gross violations of human
rights.
16. Derivative transactions. An insurer may engage in derivative transactions if the
insurer complies with all of the following conditions:

a. The insurer shall include all counterparty exposure amounts, net of collateral held, in
determining compliance with the limitations of subsections 6 and 7.
b. The insurer shall have sufficient experience with derivatives such that the insurer’s
performance and procedures reflect all of the following:
(1) That the insurer has a successful history of adequately identifying, measuring,
monitoring, and limiting exposures associated with derivative transactions.
(2) That the insurer has adequate corporate controls over the activities in subparagraph
(1).
(3) That the insurer has sufficient staff who are knowledgeable, competent, and skilled in
the use of the sophisticated financial instruments necessary to execute subparagraph (1).
c. Prior to engaging in a derivative transaction under this subsection, the insurer shall
develop guidelines and internal control procedures pursuant to rules promulgated by the
commissioner.
d. An insurer may use derivative instruments to engage in any of the following:
(1) Hedging transactions, provided that the insurer shall be able to demonstrate the
intended hedging characteristics and the ongoing effectiveness of the derivative transaction
or combination of transactions through cash flow testing or other appropriate analysis.
(2) Income generation transactions, provided that the transaction is one of the following:
(a) A sale of a call option on assets, if during the entire period the option is outstanding,
the insurer holds, or has a currently exercisable right to acquire, the underlying assets.
(b) A sale of a put option on assets, if during the entire period the option is outstanding,
the insurer holds sufficient short-term liquidity to purchase the underlying assets on exercise
oftheoption, theinsurerhastheabilitytoholdtheunderlyingassetsintheinsurer’sportfolio,
and the total market value of the put options sold by the insurer does not exceed two percent
of the insurer’s admitted assets.
(c) A sale of a covered cap or floor, if the insurer holds in the insurer’s portfolio the
investments generating the cash flow necessary to make the required payments under the
cap or floor during the complete term that cap or floor is outstanding.
(3) Replication transactions, provided that all of the following apply:
(a) The insurer is otherwise authorized to invest in the asset being replicated.
(b) The asset being replicated is subject to this section as if the transaction constitutes a
direct investment by the insurer in the replicated asset.
(c) The transaction is filed timely with the SVO as a replicated synthetic asset transaction.
17. Policy loans. An insurer may make a loan on any of the insurer’s policies in an
amount not to exceed the reserve that the insurer is required to maintain on the policy on
which a loan is made.
18. Preferred stock. An insurer may acquire preferred stock, if, as a result of and after
giving effect to the investment, the aggregate amount of preferred stock held by the insurer
does not exceed twenty-five percent of the insurer’s admitted assets, and the aggregate
amount of preferred stocks held by the insurer that are not designated P1 or P2 by the SVO
does not exceed ten percent of the insurer’s admitted assets.
19. Collateral loans and other debt securities secured by collateral. An insurer may
acquire collateral loans or other debt securities secured by collateral consisting of any assets
or investments permitted under this section, provided that the amount of the loan is not
in excess of ninety percent of the value of the collateral at the time of acquisition. For the
purpose of determining compliance with the quantitative limits in this section, the collateral
pledged to the insurer shall be aggregated with the insurer’s direct investments.
20. Additional authorized investments. An insurer may acquire investments not
otherwise authorized under this section, or that exceed the limitation of this section in an
amount in the aggregate not exceeding ten percent of the insurer’s admitted assets.
a. Investments authorized under this subsection shall not include investments prohibited
under subsection 4.
b. An insurer shall not make investments under this subsection if the insurer fails to
maintain at least company action level risk-based capital as defined by the NAIC.
c. This subsection shall not be construed to permit any asset not allowed as an admitted

asset under the requirements of the accounting practices and procedures manual to be
considered an admitted asset under this section.
21. Application of limitations. An investment qualified, in whole or in part, for
acquisition or holding as an admitted asset may be qualified or requalified, in whole or in
part, by the insurer at either the time of acquisition or a later date under any subsection of
this section if the relevant conditions contained in the applicable subsection are satisfied at
the time of the insurer’s qualification or requalification.
22. Rules. Thecommissionermayadoptrulespursuanttochapter17Atoadministerthis
section.
23. Enforcement. Investments not conforming to this section shall not be admitted
assets. The commissioner may take any enforcement action under the commissioner’s
authority to enforce compliance with this section.

Legislative History

[C73, §1179 – 1181; C97, §1791 – 1793, 1803, 1804, 1806, 1807; SS15, §1806; C24, 27, 31, 35, 39, §8698 – 8701, 8735 – 8739, 8741, 8742, 8744, 8747; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §511.8; 81 Acts, ch 168, §1; 82 Acts, ch 1095, §2 – 5]