(a) Every insurer mustmaintain an amount equal to its entire policyholder‑related liabilitiesand the minimum capital and surplus required to be maintained by the insurerunder this Chapter invested in coin or currency of the United States and ininvestments authorized under this Chapter, other than the investmentsauthorized under G.S. 58‑7‑183 or G.S. 58‑7‑187, exceptG.S. 58‑7‑187(b)(1).
(b) Investmentseligible under subsection (a), except investments acquired under G.S. 58‑7‑183,are subject to the following limitations, other limitations of this section,and any other limitations that are expressly provided for in any provisionunder which the investment is authorized:
(1) The cost ofinvestments made by insurers in stock authorized by G.S. 58‑7‑173shall not exceed twenty‑five percent (25%) of the insurer's admittedassets, provided that no more than twenty percent (20%) of the insurer'sadmitted assets shall be invested in common stock; and the cost of aninvestment in stock of any one corporation shall not exceed three percent (3%)of the insurer's admitted assets. Notwithstanding any other provision in thisChapter, the financial statement carrying value of all stock investments shallbe used for the purpose of determining the asset value against which thepercentage limitations are to be applied. Investments in the voting securitiesof a depository institution, or any company that controls a depositoryinstitution, shall not exceed five percent (5%) of the insurer's admittedassets. As used in this subdivision, "depository institution" has thesame meaning as in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. §1813; and includes any foreign bank that maintains a branch, an agency, or acommercial lending company in the United States.
(2) The cost of Canadianinvestments authorized by G.S. 58‑7‑173 shall not exceed fortypercent (40%) of the insurer's admitted assets in the aggregate, provided thatno more than twenty‑five percent (25%) of the insurer's admitted assetsshall be invested in Canadian investments authorized by G.S. 58‑7‑173(11).
(c) The cost ofinvestments made by an insurer in mortgage loans authorized by G.S. 58‑7‑179with any one person, or in mortgage‑backed securities authorized by G.S.58‑7‑173(1), (2), (8), or (17), and backed by a single collateralpool, shall not exceed three percent (3%) of the insurer's admitted assets. Aninsurer shall not invest in additional mortgage loans or mortgage‑backedsecurities without the Commissioner's consent if the admitted value of allthose investments held by the insurer exceeds an aggregate of sixty percent(60%) of the admitted assets of the insurer. Within the aggregate sixty percent(60%) limitation, the admitted value of all mortgage‑backed securitiespermitted by G.S. 58‑7‑173(17) shall not exceed thirty‑fivepercent (35%) of the admitted assets of the insurer. The admitted value ofother mortgage loans permitted by G.S. 58‑7‑179 shall not exceedforty percent (40%) of the admitted assets of the insurer. Mortgage‑backedsecurities authorized by G.S. 58‑7‑173(1), (2), or (8) shall onlybe subject to the single collateral pool limitation and the sixty percent (60%)aggregate limitation. No later than January 31, 1999, an insurer that hasmortgage investments that exceed the limitations specified in this subsectionshall submit to the Commissioner a plan to bring the amount of mortgageinvestments into compliance with the specified limitations by January 1, 2004.
(d) Without theCommissioner's prior written approval, the cost of investments permitted underG.S. 58‑7‑173 and G.S. 58‑7‑178, and that areclassified as medium to lower quality obligations, other than obligations ofsubsidiaries or affiliated corporations as that term is defined in G.S. 58‑19‑5,shall be limited to:
(1) No more than twentypercent (20%) of an insurer's admitted assets;
(2) No more than tenpercent (10%) of an insurer's admitted assets in obligations designated a 4, 5,or 6 in accordance with the Purposes and Procedures Manual of the NAICSecurities Valuation Office;
(3) No more than threepercent (3%) of an insurer's admitted assets in obligations designated a 5 or 6in accordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office; and
(4) No more than onepercent (1%) of an insurer's admitted assets in obligations designated a 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(5),(6) Repealed by SessionLaws 1993, c. 452, s. 11.
(e) As used insubsections (d), (f), (g), and (h) of this section, "medium to lowerquality obligations" means obligations designated a 3, 4, 5, or 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(f) Each insurer shallpossess and maintain adequate documentation to establish that its investmentsin medium to lower quality obligations do not exceed the limitations undersubsection (d) of this section.
(g),(h) Repealed by SessionLaws 2005‑215, s. 7, effective July 20, 2005.
(i) Failure to obtainthe Commissioner's prior written approval shall result in any investments inexcess of those permitted by subsection (d) of this section not being allowedas an asset of the insurer.
(j) The Commissionermay limit the extent of an insurer's deposits with any financial institution ifthe Commissioner determines that the financial solvency of the insurer isthreatened by a deposit in excess of insured limits.
(k) The provisions ofthis section supersede any inconsistent provision of section 106 of theSecondary Mortgage Market Enhancement Act of 1984, 15 U.S.C. § 77r‑1, tothe extent permitted by that Act. (1991, c. 681, s. 29; 1993, c. 452, ss. 10‑13;c. 504, s. 43; 1993 (Reg. Sess., 1994), c. 678, s. 12; 1998‑212, s.26B(i); 2001‑215, s. 3; 2001‑223, ss. 8.1, 8.2; 2005‑215, s.7.)
(a) Every insurer mustmaintain an amount equal to its entire policyholder‑related liabilitiesand the minimum capital and surplus required to be maintained by the insurerunder this Chapter invested in coin or currency of the United States and ininvestments authorized under this Chapter, other than the investmentsauthorized under G.S. 58‑7‑183 or G.S. 58‑7‑187, exceptG.S. 58‑7‑187(b)(1).
(b) Investmentseligible under subsection (a), except investments acquired under G.S. 58‑7‑183,are subject to the following limitations, other limitations of this section,and any other limitations that are expressly provided for in any provisionunder which the investment is authorized:
(1) The cost ofinvestments made by insurers in stock authorized by G.S. 58‑7‑173shall not exceed twenty‑five percent (25%) of the insurer's admittedassets, provided that no more than twenty percent (20%) of the insurer'sadmitted assets shall be invested in common stock; and the cost of aninvestment in stock of any one corporation shall not exceed three percent (3%)of the insurer's admitted assets. Notwithstanding any other provision in thisChapter, the financial statement carrying value of all stock investments shallbe used for the purpose of determining the asset value against which thepercentage limitations are to be applied. Investments in the voting securitiesof a depository institution, or any company that controls a depositoryinstitution, shall not exceed five percent (5%) of the insurer's admittedassets. As used in this subdivision, "depository institution" has thesame meaning as in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. §1813; and includes any foreign bank that maintains a branch, an agency, or acommercial lending company in the United States.
(2) The cost of Canadianinvestments authorized by G.S. 58‑7‑173 shall not exceed fortypercent (40%) of the insurer's admitted assets in the aggregate, provided thatno more than twenty‑five percent (25%) of the insurer's admitted assetsshall be invested in Canadian investments authorized by G.S. 58‑7‑173(11).
(c) The cost ofinvestments made by an insurer in mortgage loans authorized by G.S. 58‑7‑179with any one person, or in mortgage‑backed securities authorized by G.S.58‑7‑173(1), (2), (8), or (17), and backed by a single collateralpool, shall not exceed three percent (3%) of the insurer's admitted assets. Aninsurer shall not invest in additional mortgage loans or mortgage‑backedsecurities without the Commissioner's consent if the admitted value of allthose investments held by the insurer exceeds an aggregate of sixty percent(60%) of the admitted assets of the insurer. Within the aggregate sixty percent(60%) limitation, the admitted value of all mortgage‑backed securitiespermitted by G.S. 58‑7‑173(17) shall not exceed thirty‑fivepercent (35%) of the admitted assets of the insurer. The admitted value ofother mortgage loans permitted by G.S. 58‑7‑179 shall not exceedforty percent (40%) of the admitted assets of the insurer. Mortgage‑backedsecurities authorized by G.S. 58‑7‑173(1), (2), or (8) shall onlybe subject to the single collateral pool limitation and the sixty percent (60%)aggregate limitation. No later than January 31, 1999, an insurer that hasmortgage investments that exceed the limitations specified in this subsectionshall submit to the Commissioner a plan to bring the amount of mortgageinvestments into compliance with the specified limitations by January 1, 2004.
(d) Without theCommissioner's prior written approval, the cost of investments permitted underG.S. 58‑7‑173 and G.S. 58‑7‑178, and that areclassified as medium to lower quality obligations, other than obligations ofsubsidiaries or affiliated corporations as that term is defined in G.S. 58‑19‑5,shall be limited to:
(1) No more than twentypercent (20%) of an insurer's admitted assets;
(2) No more than tenpercent (10%) of an insurer's admitted assets in obligations designated a 4, 5,or 6 in accordance with the Purposes and Procedures Manual of the NAICSecurities Valuation Office;
(3) No more than threepercent (3%) of an insurer's admitted assets in obligations designated a 5 or 6in accordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office; and
(4) No more than onepercent (1%) of an insurer's admitted assets in obligations designated a 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(5),(6) Repealed by SessionLaws 1993, c. 452, s. 11.
(e) As used insubsections (d), (f), (g), and (h) of this section, "medium to lowerquality obligations" means obligations designated a 3, 4, 5, or 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(f) Each insurer shallpossess and maintain adequate documentation to establish that its investmentsin medium to lower quality obligations do not exceed the limitations undersubsection (d) of this section.
(g),(h) Repealed by SessionLaws 2005‑215, s. 7, effective July 20, 2005.
(i) Failure to obtainthe Commissioner's prior written approval shall result in any investments inexcess of those permitted by subsection (d) of this section not being allowedas an asset of the insurer.
(j) The Commissionermay limit the extent of an insurer's deposits with any financial institution ifthe Commissioner determines that the financial solvency of the insurer isthreatened by a deposit in excess of insured limits.
(k) The provisions ofthis section supersede any inconsistent provision of section 106 of theSecondary Mortgage Market Enhancement Act of 1984, 15 U.S.C. § 77r‑1, tothe extent permitted by that Act. (1991, c. 681, s. 29; 1993, c. 452, ss. 10‑13;c. 504, s. 43; 1993 (Reg. Sess., 1994), c. 678, s. 12; 1998‑212, s.26B(i); 2001‑215, s. 3; 2001‑223, ss. 8.1, 8.2; 2005‑215, s.7.)
(a) Every insurer mustmaintain an amount equal to its entire policyholder‑related liabilitiesand the minimum capital and surplus required to be maintained by the insurerunder this Chapter invested in coin or currency of the United States and ininvestments authorized under this Chapter, other than the investmentsauthorized under G.S. 58‑7‑183 or G.S. 58‑7‑187, exceptG.S. 58‑7‑187(b)(1).
(b) Investmentseligible under subsection (a), except investments acquired under G.S. 58‑7‑183,are subject to the following limitations, other limitations of this section,and any other limitations that are expressly provided for in any provisionunder which the investment is authorized:
(1) The cost ofinvestments made by insurers in stock authorized by G.S. 58‑7‑173shall not exceed twenty‑five percent (25%) of the insurer's admittedassets, provided that no more than twenty percent (20%) of the insurer'sadmitted assets shall be invested in common stock; and the cost of aninvestment in stock of any one corporation shall not exceed three percent (3%)of the insurer's admitted assets. Notwithstanding any other provision in thisChapter, the financial statement carrying value of all stock investments shallbe used for the purpose of determining the asset value against which thepercentage limitations are to be applied. Investments in the voting securitiesof a depository institution, or any company that controls a depositoryinstitution, shall not exceed five percent (5%) of the insurer's admittedassets. As used in this subdivision, "depository institution" has thesame meaning as in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. §1813; and includes any foreign bank that maintains a branch, an agency, or acommercial lending company in the United States.
(2) The cost of Canadianinvestments authorized by G.S. 58‑7‑173 shall not exceed fortypercent (40%) of the insurer's admitted assets in the aggregate, provided thatno more than twenty‑five percent (25%) of the insurer's admitted assetsshall be invested in Canadian investments authorized by G.S. 58‑7‑173(11).
(c) The cost ofinvestments made by an insurer in mortgage loans authorized by G.S. 58‑7‑179with any one person, or in mortgage‑backed securities authorized by G.S.58‑7‑173(1), (2), (8), or (17), and backed by a single collateralpool, shall not exceed three percent (3%) of the insurer's admitted assets. Aninsurer shall not invest in additional mortgage loans or mortgage‑backedsecurities without the Commissioner's consent if the admitted value of allthose investments held by the insurer exceeds an aggregate of sixty percent(60%) of the admitted assets of the insurer. Within the aggregate sixty percent(60%) limitation, the admitted value of all mortgage‑backed securitiespermitted by G.S. 58‑7‑173(17) shall not exceed thirty‑fivepercent (35%) of the admitted assets of the insurer. The admitted value ofother mortgage loans permitted by G.S. 58‑7‑179 shall not exceedforty percent (40%) of the admitted assets of the insurer. Mortgage‑backedsecurities authorized by G.S. 58‑7‑173(1), (2), or (8) shall onlybe subject to the single collateral pool limitation and the sixty percent (60%)aggregate limitation. No later than January 31, 1999, an insurer that hasmortgage investments that exceed the limitations specified in this subsectionshall submit to the Commissioner a plan to bring the amount of mortgageinvestments into compliance with the specified limitations by January 1, 2004.
(d) Without theCommissioner's prior written approval, the cost of investments permitted underG.S. 58‑7‑173 and G.S. 58‑7‑178, and that areclassified as medium to lower quality obligations, other than obligations ofsubsidiaries or affiliated corporations as that term is defined in G.S. 58‑19‑5,shall be limited to:
(1) No more than twentypercent (20%) of an insurer's admitted assets;
(2) No more than tenpercent (10%) of an insurer's admitted assets in obligations designated a 4, 5,or 6 in accordance with the Purposes and Procedures Manual of the NAICSecurities Valuation Office;
(3) No more than threepercent (3%) of an insurer's admitted assets in obligations designated a 5 or 6in accordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office; and
(4) No more than onepercent (1%) of an insurer's admitted assets in obligations designated a 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(5),(6) Repealed by SessionLaws 1993, c. 452, s. 11.
(e) As used insubsections (d), (f), (g), and (h) of this section, "medium to lowerquality obligations" means obligations designated a 3, 4, 5, or 6 inaccordance with the Purposes and Procedures Manual of the NAIC SecuritiesValuation Office.
(f) Each insurer shallpossess and maintain adequate documentation to establish that its investmentsin medium to lower quality obligations do not exceed the limitations undersubsection (d) of this section.
(g),(h) Repealed by SessionLaws 2005‑215, s. 7, effective July 20, 2005.
(i) Failure to obtainthe Commissioner's prior written approval shall result in any investments inexcess of those permitted by subsection (d) of this section not being allowedas an asset of the insurer.
(j) The Commissionermay limit the extent of an insurer's deposits with any financial institution ifthe Commissioner determines that the financial solvency of the insurer isthreatened by a deposit in excess of insured limits.
(k) The provisions ofthis section supersede any inconsistent provision of section 106 of theSecondary Mortgage Market Enhancement Act of 1984, 15 U.S.C. § 77r‑1, tothe extent permitted by that Act. (1991, c. 681, s. 29; 1993, c. 452, ss. 10‑13;c. 504, s. 43; 1993 (Reg. Sess., 1994), c. 678, s. 12; 1998‑212, s.26B(i); 2001‑215, s. 3; 2001‑223, ss. 8.1, 8.2; 2005‑215, s.7.)
