38.2-1422 - Obligations secured by certain leases. - Virginia Statutes

§ 38.2-1422. Obligations secured by certain leases.

A. A domestic insurer may invest in obligations of any solvent company otherthan companies referred to in § 38.2-1419, incorporated under the laws of theUnited States or of any state if:

1. The obligations are secured by an assignment to the insurer of a lease,and the rents payable under the lease, of real or personal property or bothto (i) a domestic governmental entity; (ii) Canada, or any province ofCanada; or (iii) one or more companies incorporated under the laws of theUnited States, any state, Canada or any province of Canada;

2. The rentals assigned are sufficient to repay the indebtedness within theunexpired term of the lease, excluding any term that may be provided by anenforceable option of renewal;

3. The lessee on any lease securing an obligation under this section, or theguarantor of the lease, is an entity whose obligations would be eligible forinvestment by an insurer in accordance with §§ 38.2-1415, 38.2-1421 or §38.2-1425;

4. The lessee or guarantor has not defaulted in payment of interest orprincipal on any of its obligations during the five fiscal years immediatelypreceding the date of investment; and

5. A first lien on the interest of the lessor in the unencumbered leasedproperty is obtained as additional security for any obligation acquiredpursuant to this section.

B. No domestic insurer shall invest under this section more than two percentof the insurer's admitted assets in the obligations of any one businessentity or in the obligations secured by leases to any one business entity.

(1983, c. 457, § 38.1-217.25; 1986, c. 562; 1992, c. 588.)