SECTIONS 1170-1182 - California Statutes

INSURANCE CODE

SECTION 1170-1182

1170. Domestic incorporated insurers may invest their assets in the
purchase of any of the securities specified in this article, or in
loans upon such securities, if those purchases or loans conform to
all the following conditions:
(a) Such securities are not in default as to principal or interest
at the date of investment.
(b) In the case of a purchase, the purchase price does not exceed
the market value of the securities at the date of investment.
(c) In the case of a loan not governed by the provisions of
Section 1194.81, the amount loaned does not exceed eighty-five per
cent of such market value at the date of investment.

1171. Such insurers may invest in obligations of the United States
or obligations for which the faith and credit of the United States
are pledged for payment of principal and interest.

1171.5. Such insurers may invest in obligations of the United
States Postal Service.

1172. Such insurers may invest in obligations of the Dominion of
Canada, or the Commonwealth of Puerto Rico, or of any province of the
Dominion of Canada, or of any political subdivision of the
Commonwealth of Puerto Rico, or obligations for which are pledged the
faith and credit either of the dominion, or the commonwealth, or of
any province of the dominion, or of any political subdivision of the
commonwealth, for the payment of principal and interest, if within 10
years immediately preceding the investment such province or such
political subdivision was not in default for more than 90 days in the
payment of principal or interest upon any legally authorized
obligation issued by it.

1173. Such insurers may invest in obligations issued under
authority of law by any county, municipality, or school district in
this State or in any other state, or in any province of the Dominion
of Canada or in any political subdivision of the Commonwealth of
Puerto Rico, if the obligor has not within two years next preceding
the investment defaulted for more than 90 days in the payment of any
part of either principal or interest upon any legally authorized
obligation issued by it, and the obligations of the state or province
or political subdivision in which it is located are legal for
investment under the provisions of Sections 1172 or 1174.

1174. Such insurers may invest in obligations of this State or
those for which the faith and credit of this State are pledged for
the payment of principal and interest, and in obligations of any
other State in the United States, if within ten years immediately
preceding the investment such State was not in default for more than
ninety days in the payment of any part of principal or interest of
any debt duly authorized by the Legislature of such State to be
contracted by such State since the first day of January, 1878.

1175. Such insurers may invest in bonds of any permanent road
division in this state, or any district organized under the laws of
this state, when such bonds are legal investments for savings banks
of this state, or have been certified as legal investments for
savings banks pursuant to Division 10 (commencing with Section 20000)
of the Water Code, or when the statutes or laws providing for the
issuance of such bonds provide that such bonds shall be entitled to
the same force or value or use as bonds issued by any municipality,
or such law specifically states that such bonds shall be legal
investments for either savings banks, insurance companies, all trust
funds, state school funds or any funds which may be invested in bonds
of cities, counties, cities and counties, school districts, or
municipalities in the state, or when such bonds have been
investigated and approved by a commission or board now or hereafter
authorized by law to conduct such investigation and give such
approval when such law specifies that upon that approval the bonds
are legal investments for insurers, or which the commissioner
approves in writing as legal for investment of the funds of insurers.
The commissioner in determining whether to approve any bonds as
legal investments which do not otherwise qualify as such pursuant to
any part of this code, shall, at the expense of any insurer
requesting approval, make an adequate independent investigation of
such bonds and the security therefor. A copy of the data secured in
such investigation and the resulting opinion of the commissioner
shall be furnished to the insurer.

1175.5. Such insurers may invest in bonds of any county water
district operating under Division 12 of the Water Code.

1176.5. Such insurers may make, invest in or purchase loans which
are guaranteed by the United States or any agency thereof pursuant to
the provisions of the "Servicemen's Readjustment Act of 1944" or any
act of Congress supplementary or amendatory thereof.

1176.6. None of the provisions of the Insurance Code limiting or
restricting loans by insurers or prescribing the security therefor
shall apply to any loans which are fully guaranteed by the United
States or any agency thereof pursuant to the provisions of the
"Servicemen's Readjustment Act of 1944" or any act of Congress
supplementary or amendatory thereof; and in any case in which payment
of a portion of any loan is guaranteed by the United States or any
agency thereof pursuant to the provisions of the "Servicemen's
Readjustment Act of 1944" or any act of Congress supplementary or
amendatory thereof, the guaranteed portion of such loan shall not be
deemed a part of said loan for the purposes of any provision of the
Insurance Code limiting the amount which may be loaned by an insurer
upon the security of real property or improvements thereon shall be
applicable to such loan.

1177. Such insurers may invest in notes or bonds secured by
mortgage guaranteed as to payment by a policy of mortgage insurance,
and mortgage participation certificates issued by a mortgage insurer
in accordance with the provisions of this code.

1178. Such insurers may invest in collateral trust bonds or notes,
secured by any of the following:
(a) A deposit of obligations authorized for investment by this
article or Articles 4, 5, or 6 of this chapter having a market value
at least fifteen per cent in excess of the par value of the
collateral trust bonds or notes issued.
(b) A deposit of obligations authorized for investment by this
article or Articles 4, 5, or 6 of this chapter, together with other
securities, the combined market value of the deposit being at least
twenty per cent in excess of the par value of the collateral trust
bonds or notes issued, with the par value of the collateral trust
bonds or notes not exceeding the market value of the deposited
obligations which are authorized for investment by this article or
Articles 4, 5, or 6 of this chapter.
(c) A deposit of obligations authorized for investment by this
article, or Articles 4, 5, or 6 of this chapter, together with other
securities, and conforming to the following requirements:
(1) The combined market value of the deposit is at least thirty
per cent in excess of the par value of the collateral trust bonds or
notes issued.
(2) The par value of such collateral trust bonds or notes issued
does not exceed the market value of deposited obligations authorized
for investment by this article.
(3) The deposited collateral consists of obligations authorized
for investment by this article, or Articles 4, 5, or 6 of this
chapter, having a market value of at least seventy-five per cent of
the par value of such collateral trust bonds or notes issued.

1179. Such insurers may invest in farm loan bonds, consolidated
farm loan bonds, collateral trust debentures, consolidated
debentures, or other obligations issued under the Federal Farm Loan
Act, approved July 17, 1916, as amended (Title 12 U.S.C. Sections 636
to 1012 inclusive, and Sections 1021 to 1129 inclusive), and the
Farm Credit Act of 1933, as amended (Title 12 U.S.C. Sections 1131 to
1138f inclusive), and the Farm Credit Act of 1971 (Title 12 U.S.C.
Sections 2001 to 2259 inclusive). Under this section such insurers
may invest in farm loan bonds and consolidated farm loan bonds issued
by federal land banks, consolidated collateral trust debentures and
all other debentures issued by federal intermediate credit banks,
debentures issued by the Central Bank for Cooperatives and
consolidated debentures issued by banks for cooperatives.

1180. Such insurers may invest in bonds issued under the "Home
Owners' Loan Act of 1933"; bonds, debentures and notes issued by any
federal home loan bank, or consolidated federal home loan bank notes,
bonds and debentures issued by the Federal Home Loan Bank Board in
accordance with the provisions of the Federal Home Loan Bank Act, and
mortgage, mortgage participation, pass-through or trust
certificates, or obligations or other securities issued or guaranteed
by the Federal Home Loan Mortgage Corporation, pursuant to Section
305 or Section 306 of the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. Secs. 1454, 1455), by the Government National Mortgage
Association, pursuant to Section 306 or Section 313 or Title III of
the National Housing Act (12 U.S.C. Secs. 1721, 1723(e)), or by the
Federal National Mortgage Association pursuant to 12 U.S.C. Sections
1717-1719.

1181. Such insurers may also invest in registered warrants of this
State, issued pursuant to law.

1182. Domestic incorporated insurers may invest in an account or
accounts in one or more banks, savings and loan associations, or
credit unions to the extent the account or accounts are insured by an
agency or instrumentality of the federal government. As used in this
section, an account may include a certificate of deposit.