1997 Alaska Statutes
Title 21 INSURANCE
Chapter 21.21. INVESTMENTS
Sec. 21.21.260. Real estate mortgages.

(a) An insurer may invest its funds in bonds, notes, or other evidences of indebtedness that are secured by first mortgages or deeds of trust upon improved real property located in the United States or Canada, or that are secured by first mortgages or deeds of trust upon leasehold estates having an unexpired term that may be provided by enforceable options of renewal in improved real property located in the United States or Canada. In all cases the security for the loan shall be a first lien upon the real property, and there may not be a condition or right of re-entry or forfeiture not insured against, under which, in the case of real property other than leaseholds, the lien can be cut off or subordinated or otherwise disturbed or under which, in the case of leaseholds, the insurer is unable to continue the lease in force for the duration of the loan. Nothing herein prohibits an investment by reason of the existence of a prior lien for ground rents, taxes, assessments, or other similar charges not yet delinquent. This section does not prohibit investment in mortgages or similar obligations when made under AS 21.21.240 .

(b) A mortgage loan or loans made or acquired by an insurer on any one property may not, at the time of investment by the insurer, exceed the larger of the following amounts as applicable:

(1) two-thirds of the value of the real property or leasehold securing the same; provided that if the real property or leasehold consists of one or two-family residential property, three-fourths of the value;

(2) the amount of any insurance or guaranty of the loan by the United States or by an agency or instrumentality of the United States; or

(3) the amounts provided in (1) of this subsection, plus the amount by which the excess of the loan over the amount is insured or guaranteed by the United States or by an agency or instrumentality of the United States, except that in the case of a purchase money mortgage given to secure the purchase price of real estate sold by the insurer, the amount loaned or invested may not exceed the unpaid portion of the purchase price.

(c) A mortgage loan or loans may not be made or acquired by an insurer except after an appraisal made by a qualified appraiser.

(d) A mortgage loan made or acquired by an insurer that is a participation or a part of a series of issue secured by the same mortgage or deed of trust is not a lawful investment under this section unless the entire series or issue that is secured by the same mortgage or deed of trust is held by the insurer, or unless the insurer holds all or part of a senior participation in the mortgage or deed of trust, giving it substantially the rights of a first mortgagee.

(e) A mortgage loan upon a leasehold may not be made or acquired under this section unless the terms provide for amortization payments to be made by the borrower on the principal at least once in each year in amounts sufficient to completely amortize the loan within a period of four-fifths of the term of the leasehold, inclusive of the term that may be provided by an enforceable option of renewal, that is unexpired at the time the loan is made, but in no event exceeding 35 years.

(f) In this section "improved real estate" means all farm land used for tillage, crop, or pasture, timberlands, and all real estate on which permanent improvements suitable for residence, institutional, commercial, or industrial use are situated.