Mortgage interests, may be acquired, when--other real estateinterests.
376.302. 1. (1) Subject to the limitations of section 376.297, aninsurer may acquire directly or indirectly through limited partnershipinterests and general partnership interests not otherwise prohibited bysubsection 4 of section 376.294, joint ventures, stock of an investmentsubsidiary or membership interests in a limited liability company, trustcertificates, or other similar instruments or obligations secured bymortgages on real estate situated within a domestic jurisdiction, but amortgage loan which is secured by other than a first lien shall not beacquired under this subdivision unless the insurer is the holder of thefirst lien. The obligations held by the insurer and any obligations withan equal lien priority shall not at the time of acquisition of theobligation exceed:
(a) Ninety percent of the fair market value of the real estate if themortgage loan is secured by a purchase money mortgage or like securityreceived by the insurer upon disposition of the real estate;
(b) Eighty percent of the fair market value of the real estate if themortgage requires immediate scheduled payment in periodic installments ofprincipal and interest and has an amortization period of thirty years orless and periodic payments not less than annually. Each periodic paymentshall be sufficient to assure that at all times:
a. The outstanding principal balance of the mortgage loan is notgreater than the outstanding principal balance that would be outstandingunder a mortgage loan with the same original principal balance and interestrate; and
b. There are equal payments of principal and interest with the samefrequency over the same amortization period.
Mortgage loans permitted under this subsection are permittednotwithstanding the fact that they provide for a payment of the principalbalance prior to the end of the period of the amortization of the loan.For residential mortgage loans, the eighty percent limitation may beincreased to ninety-seven percent if acceptable private mortgage insurancehas been obtained; or
(c) Seventy-five percent of the fair market value of the real estatefor mortgage loans that do not meet the requirements of paragraph (a) or(b) of this subdivision.
(2) For purposes of subdivision (1) of this subsection, the amount ofan obligation required to be included in the calculation of theloan-to-value ratio may be reduced to the extent the obligation is insuredby the Federal Housing Administration or guaranteed by the Administrator ofVeterans' Affairs, or their successor.
(3) Subject to the limitations of section 376.297, an insurer mayacquire directly or indirectly through limited partnership interests andgeneral partnership interests not otherwise prohibited by subsection 4 ofsection 376.294, joint ventures, stock of an investment subsidiary ormembership interests in a limited liability company, trust certificates, orother similar instruments or obligations secured by a second mortgage onreal estate situated within a domestic jurisdiction other than asauthorized in subdivision (1) of this subsection. The obligation held bythe insurer shall be the sole second lien priority obligation and shall notat the time of acquisition of the obligation exceed seventy percent of theamount by which the fair market value of the real estate exceeds the amountoutstanding under the first mortgage.
(4) A mortgage loan that is held by an insurer under subdivision (6)of subsection 1 of section 376.293 or acquired under this section and isrestructured in a manner that meets the requirements of a restructuredmortgage loan in accordance with the NAIC Accounting Practices andProcedures Manual or its successor publication shall continue to qualify asa mortgage loan.
(5) Subject to the limitations of section 376.297, credit leasetransactions that do not qualify for investment under section 376.298 withthe following characteristics shall be exempt from the provisions ofsubdivision (1) of this subsection:
(a) The loan amortizes over the initial fixed lease term at least inan amount sufficient so that the loan balance at the end of the lease termdoes not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service overthe life of the loan;
(c) A tenant or its affiliated entity whose rated credit instrumentshave a SVO "1" or "2" designation or a comparable rating from a nationallyrecognized statistical rating organization recognized by the SVO has a fullfaith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lienmortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant,excluding exterior structural, parking and heating, ventilation and airconditioning replacement expenses, unless annual escrow contributions fromcash flows derived from the lease payments cover the expense shortfall; and
(f) There is a perfected assignment of the rents due under the leaseto or for the benefit of the insurer.
2. (1) An insurer may acquire, manage, and dispose of real estatesituated in a domestic jurisdiction directly or indirectly through limitedpartnership interests and general partnership interests not otherwiseprohibited by subsection 4 of section 376.294, joint ventures, stock of aninvestment subsidiary or membership interests in a limited liabilitycompany, trust certificates, or other similar instruments. The real estateshall be income producing or intended for improvement or development forinvestment purposes under an existing program in which case the real estateshall be deemed to be income producing.
(2) The real estate may be subject to mortgages, liens, or otherencumbrances, and the amount of which shall, to the extent that theobligations secured by the mortgages, liens, or encumbrances are withoutrecourse to the insurer, be deducted from the amount of the investment ofthe insurer in the real estate for purposes of determining compliance withsubdivisions (2) and (3) of subsection 4 of this section.
3. An insurer may acquire, manage, and dispose of real estate for theconvenient accommodation of the insurer's (which may include itsaffiliates) business operations, including home office, branch office, andfield office operations. Such real estate acquired may:
(1) Include excess space for rent to others if the excess space atits fair market value would otherwise be a permitted investment undersubsection 2 of this section and is so qualified by the insurer; or
(2) Be subject to one or more mortgage, lien, or other encumbrance,and the amount of which shall, to the extent that the obligations securedby the mortgages, liens, or encumbrances are without recourse to theinsurer, be deducted from the amount of the investment of the insurer inthe real estate for purposes of determining compliance with subsection 4 ofthis section.
For purposes of this subsection, business operations shall not include thatportion of real estate used for the direct provision of health careservices by an accident and health insurer for its insureds. An insurermay acquire real estate used for these purposes under subsection 2 of thissection.
4. An insurer may not acquire an investment:
(1) Under subsection 1 of this section, if as a result of, and aftergiving effect to the investment, the aggregate amount of all investmentsthen held by the insurer under subsection 1 of this section would notexceed:
(a) One percent of its admitted assets in mortgage loans covering anyone secured location;
(b) One-fourth of one percent of its admitted assets in constructionloans covering any one secured location; or
(c) Two percent of its admitted assets in construction loans in theaggregate;
(2) Under subsection 2 of this section if as a result of and aftergiving effect to the investment and any outstanding guarantees made by theinsurer in connection with the investment the aggregate amount ofinvestments then held by the insurer under subsection 2 of this sectionplus the guarantees then outstanding would exceed:
(a) One percent of its admitted assets in one parcel or group ofcontiguous parcels of real estate, except that this limitation shall notapply to that portion of real estate used for the direct provision ofhealth care services by an accident and health insurer for its insureds,such as hospitals, medical clinics, medical professional buildings, orother health facilities for the purposes of providing health services; or
(b) Fifteen percent of its admitted assets in the aggregate but notmore than five percent of its admitted assets in real estate to be improvedor developed;
(3) Under subsection 1 or 2 of this section if as a result of andafter giving effect to the investment and any guarantees made by theinsurer in connection with the investment the aggregate amount of allinvestments then held by the insurer under subsections 1 and 2 of thissection plus the guarantees then outstanding would exceed forty-fivepercent of its admitted assets. However, an insurer may exceed thislimitation by no more than thirty percent of its admitted assets if:
(a) This increased amount is invested only in residential mortgageloans;
(b) The insurer has no more than ten percent of its admitted assetsinvested in mortgage loans other than residential mortgage loans;
(c) The loan-to-value ratio of each residential mortgage loan doesnot exceed sixty percent at the time the mortgage loan is qualified underthis increased authority and the fair market value is supported by anappraisal no more than two years old prepared by an independent appraiser;
(d) A single mortgage loan qualified under this increased authoritydoes not exceed one-half of one percent of its admitted assets;
(e) The insurer files with the director and receives approval fromthe director for a plan that is designed to result in a portfolio ofresidential mortgage loans that is geographically diversified; and
(f) The insurer agrees to file annually with the director recordsthat demonstrate that its portfolio of residential mortgage loans isgeographically diversified in accordance with the plan.
The limitations of section 376.297 shall not apply to an insurer'sacquisition of real estate under subsection 3 of this section. An insurershall not acquire real estate under subsection 3 of this section if as aresult of and after giving effect to the acquisition the aggregate amountof real estate then held by the insurer under subsection 3 of this sectionwould exceed ten percent of its admitted assets. With the permission ofthe director, additional amounts of real estate may be acquired undersubsection 3 of this section.
Mortgage interests, may be acquired, when--other real estateinterests.
376.302. 1. (1) Subject to the limitations of section 376.297, aninsurer may acquire directly or indirectly through limited partnershipinterests and general partnership interests not otherwise prohibited bysubsection 4 of section 376.294, joint ventures, stock of an investmentsubsidiary or membership interests in a limited liability company, trustcertificates, or other similar instruments or obligations secured bymortgages on real estate situated within a domestic jurisdiction, but amortgage loan which is secured by other than a first lien shall not beacquired under this subdivision unless the insurer is the holder of thefirst lien. The obligations held by the insurer and any obligations withan equal lien priority shall not at the time of acquisition of theobligation exceed:
(a) Ninety percent of the fair market value of the real estate if themortgage loan is secured by a purchase money mortgage or like securityreceived by the insurer upon disposition of the real estate;
(b) Eighty percent of the fair market value of the real estate if themortgage requires immediate scheduled payment in periodic installments ofprincipal and interest and has an amortization period of thirty years orless and periodic payments not less than annually. Each periodic paymentshall be sufficient to assure that at all times:
a. The outstanding principal balance of the mortgage loan is notgreater than the outstanding principal balance that would be outstandingunder a mortgage loan with the same original principal balance and interestrate; and
b. There are equal payments of principal and interest with the samefrequency over the same amortization period.
Mortgage loans permitted under this subsection are permittednotwithstanding the fact that they provide for a payment of the principalbalance prior to the end of the period of the amortization of the loan.For residential mortgage loans, the eighty percent limitation may beincreased to ninety-seven percent if acceptable private mortgage insurancehas been obtained; or
(c) Seventy-five percent of the fair market value of the real estatefor mortgage loans that do not meet the requirements of paragraph (a) or(b) of this subdivision.
(2) For purposes of subdivision (1) of this subsection, the amount ofan obligation required to be included in the calculation of theloan-to-value ratio may be reduced to the extent the obligation is insuredby the Federal Housing Administration or guaranteed by the Administrator ofVeterans' Affairs, or their successor.
(3) Subject to the limitations of section 376.297, an insurer mayacquire directly or indirectly through limited partnership interests andgeneral partnership interests not otherwise prohibited by subsection 4 ofsection 376.294, joint ventures, stock of an investment subsidiary ormembership interests in a limited liability company, trust certificates, orother similar instruments or obligations secured by a second mortgage onreal estate situated within a domestic jurisdiction other than asauthorized in subdivision (1) of this subsection. The obligation held bythe insurer shall be the sole second lien priority obligation and shall notat the time of acquisition of the obligation exceed seventy percent of theamount by which the fair market value of the real estate exceeds the amountoutstanding under the first mortgage.
(4) A mortgage loan that is held by an insurer under subdivision (6)of subsection 1 of section 376.293 or acquired under this section and isrestructured in a manner that meets the requirements of a restructuredmortgage loan in accordance with the NAIC Accounting Practices andProcedures Manual or its successor publication shall continue to qualify asa mortgage loan.
(5) Subject to the limitations of section 376.297, credit leasetransactions that do not qualify for investment under section 376.298 withthe following characteristics shall be exempt from the provisions ofsubdivision (1) of this subsection:
(a) The loan amortizes over the initial fixed lease term at least inan amount sufficient so that the loan balance at the end of the lease termdoes not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service overthe life of the loan;
(c) A tenant or its affiliated entity whose rated credit instrumentshave a SVO "1" or "2" designation or a comparable rating from a nationallyrecognized statistical rating organization recognized by the SVO has a fullfaith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lienmortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant,excluding exterior structural, parking and heating, ventilation and airconditioning replacement expenses, unless annual escrow contributions fromcash flows derived from the lease payments cover the expense shortfall; and
(f) There is a perfected assignment of the rents due under the leaseto or for the benefit of the insurer.
2. (1) An insurer may acquire, manage, and dispose of real estatesituated in a domestic jurisdiction directly or indirectly through limitedpartnership interests and general partnership interests not otherwiseprohibited by subsection 4 of section 376.294, joint ventures, stock of aninvestment subsidiary or membership interests in a limited liabilitycompany, trust certificates, or other similar instruments. The real estateshall be income producing or intended for improvement or development forinvestment purposes under an existing program in which case the real estateshall be deemed to be income producing.
(2) The real estate may be subject to mortgages, liens, or otherencumbrances, and the amount of which shall, to the extent that theobligations secured by the mortgages, liens, or encumbrances are withoutrecourse to the insurer, be deducted from the amount of the investment ofthe insurer in the real estate for purposes of determining compliance withsubdivisions (2) and (3) of subsection 4 of this section.
3. An insurer may acquire, manage, and dispose of real estate for theconvenient accommodation of the insurer's (which may include itsaffiliates) business operations, including home office, branch office, andfield office operations. Such real estate acquired may:
(1) Include excess space for rent to others if the excess space atits fair market value would otherwise be a permitted investment undersubsection 2 of this section and is so qualified by the insurer; or
(2) Be subject to one or more mortgage, lien, or other encumbrance,and the amount of which shall, to the extent that the obligations securedby the mortgages, liens, or encumbrances are without recourse to theinsurer, be deducted from the amount of the investment of the insurer inthe real estate for purposes of determining compliance with subsection 4 ofthis section.
For purposes of this subsection, business operations shall not include thatportion of real estate used for the direct provision of health careservices by an accident and health insurer for its insureds. An insurermay acquire real estate used for these purposes under subsection 2 of thissection.
4. An insurer may not acquire an investment:
(1) Under subsection 1 of this section, if as a result of, and aftergiving effect to the investment, the aggregate amount of all investmentsthen held by the insurer under subsection 1 of this section would notexceed:
(a) One percent of its admitted assets in mortgage loans covering anyone secured location;
(b) One-fourth of one percent of its admitted assets in constructionloans covering any one secured location; or
(c) Two percent of its admitted assets in construction loans in theaggregate;
(2) Under subsection 2 of this section if as a result of and aftergiving effect to the investment and any outstanding guarantees made by theinsurer in connection with the investment the aggregate amount ofinvestments then held by the insurer under subsection 2 of this sectionplus the guarantees then outstanding would exceed:
(a) One percent of its admitted assets in one parcel or group ofcontiguous parcels of real estate, except that this limitation shall notapply to that portion of real estate used for the direct provision ofhealth care services by an accident and health insurer for its insureds,such as hospitals, medical clinics, medical professional buildings, orother health facilities for the purposes of providing health services; or
(b) Fifteen percent of its admitted assets in the aggregate but notmore than five percent of its admitted assets in real estate to be improvedor developed;
(3) Under subsection 1 or 2 of this section if as a result of andafter giving effect to the investment and any guarantees made by theinsurer in connection with the investment the aggregate amount of allinvestments then held by the insurer under subsections 1 and 2 of thissection plus the guarantees then outstanding would exceed forty-fivepercent of its admitted assets. However, an insurer may exceed thislimitation by no more than thirty percent of its admitted assets if:
(a) This increased amount is invested only in residential mortgageloans;
(b) The insurer has no more than ten percent of its admitted assetsinvested in mortgage loans other than residential mortgage loans;
(c) The loan-to-value ratio of each residential mortgage loan doesnot exceed sixty percent at the time the mortgage loan is qualified underthis increased authority and the fair market value is supported by anappraisal no more than two years old prepared by an independent appraiser;
(d) A single mortgage loan qualified under this increased authoritydoes not exceed one-half of one percent of its admitted assets;
(e) The insurer files with the director and receives approval fromthe director for a plan that is designed to result in a portfolio ofresidential mortgage loans that is geographically diversified; and
(f) The insurer agrees to file annually with the director recordsthat demonstrate that its portfolio of residential mortgage loans isgeographically diversified in accordance with the plan.
The limitations of section 376.297 shall not apply to an insurer'sacquisition of real estate under subsection 3 of this section. An insurershall not acquire real estate under subsection 3 of this section if as aresult of and after giving effect to the acquisition the aggregate amountof real estate then held by the insurer under subsection 3 of this sectionwould exceed ten percent of its admitted assets. With the permission ofthe director, additional amounts of real estate may be acquired undersubsection 3 of this section.
Mortgage interests, may be acquired, when--other real estateinterests.
376.302. 1. (1) Subject to the limitations of section 376.297, aninsurer may acquire directly or indirectly through limited partnershipinterests and general partnership interests not otherwise prohibited bysubsection 4 of section 376.294, joint ventures, stock of an investmentsubsidiary or membership interests in a limited liability company, trustcertificates, or other similar instruments or obligations secured bymortgages on real estate situated within a domestic jurisdiction, but amortgage loan which is secured by other than a first lien shall not beacquired under this subdivision unless the insurer is the holder of thefirst lien. The obligations held by the insurer and any obligations withan equal lien priority shall not at the time of acquisition of theobligation exceed:
(a) Ninety percent of the fair market value of the real estate if themortgage loan is secured by a purchase money mortgage or like securityreceived by the insurer upon disposition of the real estate;
(b) Eighty percent of the fair market value of the real estate if themortgage requires immediate scheduled payment in periodic installments ofprincipal and interest and has an amortization period of thirty years orless and periodic payments not less than annually. Each periodic paymentshall be sufficient to assure that at all times:
a. The outstanding principal balance of the mortgage loan is notgreater than the outstanding principal balance that would be outstandingunder a mortgage loan with the same original principal balance and interestrate; and
b. There are equal payments of principal and interest with the samefrequency over the same amortization period.
Mortgage loans permitted under this subsection are permittednotwithstanding the fact that they provide for a payment of the principalbalance prior to the end of the period of the amortization of the loan.For residential mortgage loans, the eighty percent limitation may beincreased to ninety-seven percent if acceptable private mortgage insurancehas been obtained; or
(c) Seventy-five percent of the fair market value of the real estatefor mortgage loans that do not meet the requirements of paragraph (a) or(b) of this subdivision.
(2) For purposes of subdivision (1) of this subsection, the amount ofan obligation required to be included in the calculation of theloan-to-value ratio may be reduced to the extent the obligation is insuredby the Federal Housing Administration or guaranteed by the Administrator ofVeterans' Affairs, or their successor.
(3) Subject to the limitations of section 376.297, an insurer mayacquire directly or indirectly through limited partnership interests andgeneral partnership interests not otherwise prohibited by subsection 4 ofsection 376.294, joint ventures, stock of an investment subsidiary ormembership interests in a limited liability company, trust certificates, orother similar instruments or obligations secured by a second mortgage onreal estate situated within a domestic jurisdiction other than asauthorized in subdivision (1) of this subsection. The obligation held bythe insurer shall be the sole second lien priority obligation and shall notat the time of acquisition of the obligation exceed seventy percent of theamount by which the fair market value of the real estate exceeds the amountoutstanding under the first mortgage.
(4) A mortgage loan that is held by an insurer under subdivision (6)of subsection 1 of section 376.293 or acquired under this section and isrestructured in a manner that meets the requirements of a restructuredmortgage loan in accordance with the NAIC Accounting Practices andProcedures Manual or its successor publication shall continue to qualify asa mortgage loan.
(5) Subject to the limitations of section 376.297, credit leasetransactions that do not qualify for investment under section 376.298 withthe following characteristics shall be exempt from the provisions ofsubdivision (1) of this subsection:
(a) The loan amortizes over the initial fixed lease term at least inan amount sufficient so that the loan balance at the end of the lease termdoes not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service overthe life of the loan;
(c) A tenant or its affiliated entity whose rated credit instrumentshave a SVO "1" or "2" designation or a comparable rating from a nationallyrecognized statistical rating organization recognized by the SVO has a fullfaith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lienmortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant,excluding exterior structural, parking and heating, ventilation and airconditioning replacement expenses, unless annual escrow contributions fromcash flows derived from the lease payments cover the expense shortfall; and
(f) There is a perfected assignment of the rents due under the leaseto or for the benefit of the insurer.
2. (1) An insurer may acquire, manage, and dispose of real estatesituated in a domestic jurisdiction directly or indirectly through limitedpartnership interests and general partnership interests not otherwiseprohibited by subsection 4 of section 376.294, joint ventures, stock of aninvestment subsidiary or membership interests in a limited liabilitycompany, trust certificates, or other similar instruments. The real estateshall be income producing or intended for improvement or development forinvestment purposes under an existing program in which case the real estateshall be deemed to be income producing.
(2) The real estate may be subject to mortgages, liens, or otherencumbrances, and the amount of which shall, to the extent that theobligations secured by the mortgages, liens, or encumbrances are withoutrecourse to the insurer, be deducted from the amount of the investment ofthe insurer in the real estate for purposes of determining compliance withsubdivisions (2) and (3) of subsection 4 of this section.
3. An insurer may acquire, manage, and dispose of real estate for theconvenient accommodation of the insurer's (which may include itsaffiliates) business operations, including home office, branch office, andfield office operations. Such real estate acquired may:
(1) Include excess space for rent to others if the excess space atits fair market value would otherwise be a permitted investment undersubsection 2 of this section and is so qualified by the insurer; or
(2) Be subject to one or more mortgage, lien, or other encumbrance,and the amount of which shall, to the extent that the obligations securedby the mortgages, liens, or encumbrances are without recourse to theinsurer, be deducted from the amount of the investment of the insurer inthe real estate for purposes of determining compliance with subsection 4 ofthis section.
For purposes of this subsection, business operations shall not include thatportion of real estate used for the direct provision of health careservices by an accident and health insurer for its insureds. An insurermay acquire real estate used for these purposes under subsection 2 of thissection.
4. An insurer may not acquire an investment:
(1) Under subsection 1 of this section, if as a result of, and aftergiving effect to the investment, the aggregate amount of all investmentsthen held by the insurer under subsection 1 of this section would notexceed:
(a) One percent of its admitted assets in mortgage loans covering anyone secured location;
(b) One-fourth of one percent of its admitted assets in constructionloans covering any one secured location; or
(c) Two percent of its admitted assets in construction loans in theaggregate;
(2) Under subsection 2 of this section if as a result of and aftergiving effect to the investment and any outstanding guarantees made by theinsurer in connection with the investment the aggregate amount ofinvestments then held by the insurer under subsection 2 of this sectionplus the guarantees then outstanding would exceed:
(a) One percent of its admitted assets in one parcel or group ofcontiguous parcels of real estate, except that this limitation shall notapply to that portion of real estate used for the direct provision ofhealth care services by an accident and health insurer for its insureds,such as hospitals, medical clinics, medical professional buildings, orother health facilities for the purposes of providing health services; or
(b) Fifteen percent of its admitted assets in the aggregate but notmore than five percent of its admitted assets in real estate to be improvedor developed;
(3) Under subsection 1 or 2 of this section if as a result of andafter giving effect to the investment and any guarantees made by theinsurer in connection with the investment the aggregate amount of allinvestments then held by the insurer under subsections 1 and 2 of thissection plus the guarantees then outstanding would exceed forty-fivepercent of its admitted assets. However, an insurer may exceed thislimitation by no more than thirty percent of its admitted assets if:
(a) This increased amount is invested only in residential mortgageloans;
(b) The insurer has no more than ten percent of its admitted assetsinvested in mortgage loans other than residential mortgage loans;
(c) The loan-to-value ratio of each residential mortgage loan doesnot exceed sixty percent at the time the mortgage loan is qualified underthis increased authority and the fair market value is supported by anappraisal no more than two years old prepared by an independent appraiser;
(d) A single mortgage loan qualified under this increased authoritydoes not exceed one-half of one percent of its admitted assets;
(e) The insurer files with the director and receives approval fromthe director for a plan that is designed to result in a portfolio ofresidential mortgage loans that is geographically diversified; and
(f) The insurer agrees to file annually with the director recordsthat demonstrate that its portfolio of residential mortgage loans isgeographically diversified in accordance with the plan.
The limitations of section 376.297 shall not apply to an insurer'sacquisition of real estate under subsection 3 of this section. An insurershall not acquire real estate under subsection 3 of this section if as aresult of and after giving effect to the acquisition the aggregate amountof real estate then held by the insurer under subsection 3 of this sectionwould exceed ten percent of its admitted assets. With the permission ofthe director, additional amounts of real estate may be acquired undersubsection 3 of this section.
