§ 1414. Valuation of investments.
(a)(1) All obligations having a\nfixed term and rate of interest and held by any life insurance company\nor fraternal benefit society authorized to do business in this state, if\namply secured and not in default as to principal or interest, shall be\nvalued as follows:\n (A) if purchased at par, at the par value;\n (B) if purchased above or below par, on the basis of the purchase\nprice adjusted so as to bring the value to par at maturity and yield in\nthe meantime the effective rate of interest at which the purchase was\nmade, or, in the superintendent's discretion, on the basis of the method\nof calculation commonly known as the pro rata method.\n (2) The purchase price shall in no case be taken at a higher figure\nthan the actual market value at t
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§ 1414. Valuation of investments. (a) (1) All obligations having a\nfixed term and rate of interest and held by any life insurance company\nor fraternal benefit society authorized to do business in this state, if\namply secured and not in default as to principal or interest, shall be\nvalued as follows:\n (A) if purchased at par, at the par value;\n (B) if purchased above or below par, on the basis of the purchase\nprice adjusted so as to bring the value to par at maturity and yield in\nthe meantime the effective rate of interest at which the purchase was\nmade, or, in the superintendent's discretion, on the basis of the method\nof calculation commonly known as the pro rata method.\n (2) The purchase price shall in no case be taken at a higher figure\nthan the actual market value at the time of acquisition.\n (3) The superintendent shall have the power to determine the\neligibility of any such investments for valuation on the basis of\namortization, and may by regulation prescribe or limit the types of\nsecurities so eligible for amortization. All obligations which in the\njudgment of the superintendent are not amply secured shall not be\neligible for amortization and shall be valued in accordance with\nsubsection (b) hereof.\n (4) The superintendent may, if he finds that the interests of\npolicyholders so permit or require, by regulation permit or require any\nclass of insurers, other than life insurance companies or fraternal\nbenefit societies, authorized to do business in this state, to value\ntheir obligations in accordance with the foregoing rule.\n (b) (1) Except securities subject to amortization and except as\notherwise provided in this chapter, the investments (including any\ninvestments in an investment company) of all insurers authorized to do\nbusiness in this state shall be valued, in the discretion of the\nsuperintendent, at their market value, or at their appraised value, or\nat prices determined by him as representing their fair market value.\n (2) If the superintendent finds that in view of the character of\ninvestments of the insurer it would be prudent for such insurer to\nestablish a special reserve for possible losses or fluctuations in the\nvalues of its investments, he may require that a reserve, reasonable in\namount, be established and maintained and that it be reported in any\nstatement or report of the financial condition of such insurer.\n (3) The superintendent may, in connection with any examination or\nrequired financial statement of the insurer, require it to furnish him a\ncomplete financial statement and audited report of the financial\ncondition of any corporation whose securities are owned wholly or partly\nby such insurer and may cause an examination to be made of any\nsubsidiary or affiliate of such insurer.\n (c) (1) The shares of an insurance company which is not a subsidiary,\nor affiliate, including for purposes of this subsection any corporation\nhaving a majority of its assets invested in one or more insurance\ncompanies, shall be valued in accordance with subsection (b) of this\nsection if such shares are registered on a national securities exchange,\nas provided in the federal Securities Exchange Act of 1934, 15 U.S.C. §§\n78a-78kk.\n (2) Except as otherwise provided in section four thousand two hundred\nforty of this chapter, shares of an insurance company which is a\nsubsidiary, or affiliate, shall be valued according to the methods\napproved by the National Association of Insurance Commissioners for the\nvaluation of subsidiary, controlled and affiliated entities, or such\nother method that the superintendent in a regulation determines would be\nin the best interests of the policyholders and the people of this state.\n (3) The book value of common shares of an insurance company shall be\nascertained by dividing (i) the amount of the insurer's capital and\nsurplus less the value of all its preferred shares, if any, outstanding,\nby (ii) the number of common shares outstanding.\n (4) Notwithstanding the foregoing provisions, an insurer may, at its\noption, value its shares in a subsidiary insurance company in an amount\nnot less than acquisition cost if it is less than the value determined\nas hereinbefore provided.\n (d) Real property acquired by foreclosure or by deed in lieu thereof,\nin the absence of a recent appraisal deemed reliable by the\nsuperintendent, shall not be valued at an amount greater than the unpaid\nprincipal of the defaulted loan at the date of such acquisition,\ntogether with any taxes and expenses paid or incurred by such insurer at\nsuch time in connection with such acquisition (but not including any\nuncollected interest on such loan), and the cost of additions or\nimprovements thereafter made by such insurer and any amounts thereafter\npaid by such insurer on any assessments levied for improvements in\nconnection with the property.\n (e) Purchase money mortgages received on dispositions of real property\nshall be valued in an amount not exceeding ninety percent of the value\nof such real property as determined by an appraisal made by an appraiser\nat or about the time of the disposition; provided that purchase money\nmortgages received on dispositions of real property acquired or held\npursuant to paragraph five of subsection (a) of section one thousand\nfour hundred four of this article or on dispositions of real property\nacquired or held under section one thousand four hundred five of this\narticle in satisfaction of loans, mortgages, liens, judgments, decrees\nor other debts previously owing to such insurer in the course of its\nbusiness shall in no event be valued in an amount exceeding its\nacquisition costs.\n (f) The stock of a subsidiary of an insurer shall be valued on the\nbasis of the greater of: (i) the value of only such assets of such\nsubsidiary as would constitute lawful investments if acquired or held\ndirectly by the insurer; or (ii) such other value as may be determined\npursuant to standards and cumulative limitations in regulations\npromulgated by the superintendent.\n (g) Notwithstanding any provision contained in this section or\nelsewhere in this chapter, if the superintendent finds that the\ninterests of policyholders so permit or require, he may permit or\nrequire any class of insurers authorized to do business in this state to\nvalue their investments or any class thereof as of any date heretofore\nor hereafter in accordance with any applicable valuation or method\napproved by the National Association of Insurance Commissioners.\n