38.2-1437.1 - Mortgage pass-through securities. - Virginia Statutes

§ 38.2-1437.1. Mortgage pass-through securities.

A domestic insurer may invest in mortgage pass-through securities backed by apool of mortgages of the kind, class and investment quality as those eligiblefor investment under §§ 38.2-1434 through 38.2-1437, under the followingconditions:

1. The servicer of the pool of mortgages shall be a business entity createdunder the laws of the United States or any state;

2. The pool of mortgages is assigned to a business entity, other than a soleproprietorship, having a net worth of at least five million dollars, astrustee for the benefit of the holders of the securities;

3. A domestic insurer shall not invest under this section more than twopercent of its admitted assets in securities backed by any single mortgagepass-through pool;

4. All mortgage pass-through securities acquired by a domestic insurer underthis section shall provide for flow-through of both principal and interestpayments payable on the underlying mortgage loan assets; mortgagepass-through securities promising principal-only, interest-only or residualinterests-only in the underlying mortgage assets shall not be acquired; and

5. The securities on the date of investment shall be high grade obligations.

(1992, c. 588; 1999, c. 483.)