Texas § 425.116 AUTHORIZED INVESTMENTS: PREFERRED STOCK.

Texas Statutes

§ 425.116 — AUTHORIZED INVESTMENTS: PREFERRED STOCK.

Texas § 425.116

Code INInsurance Code

This text of Texas § 425.116 (AUTHORIZED INVESTMENTS: PREFERRED STOCK.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Tex. Insurance Code Code Ann. § 425.116 (2026).

Text

Sec. 425.116. AUTHORIZED INVESTMENTS: PREFERRED STOCK.

(a)Subject to this section, an insurance company may invest in preferred stock of a business entity, as defined by Section 425.110 .

(b)An insurance company may invest in preferred stock only if:

(1)the stock is rated by the securities valuation office; and

(2)the sum of the company's aggregate investment in preferred stock rated 3, 4, 5, or 6 and the company's investments under Section 425.110 (d) does not exceed the limitations specified by Section 425.110 (d).

(c)An insurance company's investments in the preferred stock of a single business entity may not exceed 20 percent of the company's capital and surplus.

(d)The aggregate amount of an insurance company's investments in preferred stock as to which there is not a sinking fu

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Sec. 425.116. AUTHORIZED INVESTMENTS: PREFERRED STOCK. (a) Subject to this section, an insurance company may invest in preferred stock of a business entity, as defined by Section 425.110 .
(b) An insurance company may invest in preferred stock only if:
(1) the stock is rated by the securities valuation office; and
(2) the sum of the company's aggregate investment in preferred stock rated 3, 4, 5, or 6 and the company's investments under Section 425.110 (d) does not exceed the limitations specified by Section 425.110 (d).
(c) An insurance company's investments in the preferred stock of a single business entity may not exceed 20 percent of the company's capital and surplus.
(d) The aggregate amount of an insurance company's investments in preferred stock as to which there is not a sinking fund for the redemption and retirement of the stock that meets the standards established by the National Association of Insurance Commissioners may not exceed 10 percent of the company's assets.
(e) The aggregate amount of an insurance company's investments under this section may not exceed 40 percent of the company's assets.