2005 Nevada Revised Statutes - Chapter 682A — Investments

CHAPTER 682A - INVESTMENTS

NRS 682A.010 Scope.

NRS 682A.020 Eligibleinvestments.

NRS 682A.030 Generalqualifications.

NRS 682A.040 Authorizationand record of investments.

NRS 682A.050 Diversification.

NRS 682A.060 Publicobligations.

NRS 682A.070 Obligationsand stock of certain federal and international agencies.

NRS 682A.080 Corporateobligations.

NRS 682A.090 Definitions;net earnings.

NRS 682A.100 Preferredor guaranteed stock.

NRS 682A.110 Commonstocks.

NRS 682A.120 Insurancestocks.

NRS 682A.130 Stocksof subsidiaries.

NRS 682A.140 Commontrust funds; mutual funds.

NRS 682A.150 Bankersacceptances and bills of exchange.

NRS 682A.160 Equipmenttrust obligations or certificates.

NRS 682A.170 Loanssecured by policy.

NRS 682A.180 Collateralloans.

NRS 682A.190 Savingsand share accounts.

NRS 682A.200 Miscellaneousinvestments; records.

NRS 682A.210 Specialaccounts.

NRS 682A.220 Specialinvestments of title insurers.

NRS 682A.230 Mortgagesand deeds of trust.

NRS 682A.240 Realproperty.

NRS 682A.250 Timelimited for disposal of real property.

NRS 682A.260 Timelimited for disposal of other ineligible property and securities.

NRS 682A.270 Failureto dispose of real property, personal property or securities: Effect; penalty.

NRS 682A.280 Prohibitedinvestments and underwriting.

NRS 682A.290 Investmentsof foreign insurers.

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NRS 682A.010 Scope. This chapter, with the exception of NRS 682A.290, applies only to domesticinsurers.

(Added to NRS by 1971, 1617)

NRS 682A.020 Eligibleinvestments.

1. Insurers may invest in or lend their funds on thesecurity of, and may hold as invested assets, only eligible investments asprescribed in this chapter.

2. Any particular investment held by an insurer onJanuary 1, 1972, which was a legal investment at the time it was made, andwhich the insurer was legally entitled to possess immediately before January 1,1972, shall be deemed to be an eligible investment.

3. Any particular investment held by a successororganization to the State Industrial Insurance System that was established bysection 79 of chapter 642, Statutes of Nevada 1981, at page 1449, which was alegal investment of the System made before January 1, 2000, and which thesuccessor organization is legally entitled to possess on or after January 1,2000, shall be deemed to be an eligible investment of the successororganization.

4. Eligibility of an investment must be determined asof the date of its making or acquisition, except as stated in subsections 2 and3.

5. Any investment limitation based upon the amount ofthe insurers assets or particular funds must relate to such assets or funds asshown by the insurers annual statement as of December 31 next preceding thedate of acquisition of the investment by the insurer, or as shown by a currentfinancial statement resulting from merger of another insurer, bulk reinsuranceor change in capitalization.

6. No insurer may pay any commission or brokerage forthe purchase or sale of property in excess of that usual and customary at thetime and in the locality where such purchases or sales are made, and completeinformation regarding all payments of commission and brokerage must be reportedin the next annual statement.

(Added to NRS by 1971, 1617; A 1999, 1832)

NRS 682A.030 Generalqualifications.

1. No security or investment (other than real andpersonal property acquired under NRS682A.240 (real property) shall be eligible for acquisition unless it is interestbearing or interest accruing or entitled to dividends or is otherwise incomeearning, is not then in default in any respect, and the insurer is entitled toreceive for its exclusive account and benefit the interest or income accruingthereon.

2. No security or investment shall be eligible forpurchase at a price above its fair value or market value.

3. No provision of this chapter shall prohibit theacquisition by an insurer of other or additional securities or property ifreceived as a dividend or as a lawful distribution of assets, or upon a debt orjudgment, or under a lawful and bona fide agreement of bulk reinsurance, mergeror consolidation. Any security or property so acquired which is not otherwisean eligible investment under this chapter shall be disposed of pursuant to NRS 682A.250 if real property, orpursuant to NRS 682A.260 if personalproperty or securities.

(Added to NRS by 1971, 1618)

NRS 682A.040 Authorizationand record of investments.

1. An insurer shall not make any investment or loan(other than policy loans or annuity contract loans of a life insurer) unlessthe same is authorized or ratified by the insurers board of directors or by acommittee thereof charged with supervision of investments and loans.

2. The insurer shall maintain a full record of eachinvestment, showing, among other pertinent information, the name of anyofficer, director or principal stockholder of the insurer having any direct,indirect or contingent interest in the securities, loan or propertyconstituting the investment, or in the person in whose behalf the investment ismade, and the nature of such interest.

(Added to NRS by 1971, 1618)

NRS 682A.050 Diversification. An insurer shall only invest in or hold as assetscategories of investments within applicable limits as follows:

1. One person. An insurer shall not at any one timehave any combination of investments in or loans upon the security ofobligations, property or securities of any one person (other than its lawfulsubsidiary) aggregating over 10 percent of the insurers assets. This shall notapply as to general obligations of the United States of America or of anystate, or of Canada or any province thereof, or of the United States of Mexico,or include policy loans made under NRS682A.170.

2. Voting stock. An insurer shall not invest in orhold at any one time more than 10 percent of the outstanding voting stock ofany corporation, except as to voting rights of preferred stock during defaultof dividends. This subsection does not apply to stock of a subsidiary of theinsurer acquired under NRS 682A.130,or to controlling stock of an insurer acquired under NRS 682A.120.

3. Minimum capital. An insurer shall invest andmaintain invested funds not less in amount that the minimum paid-in capitalstock required under this Code of a domestic stock insurer transacting likekinds of insurance, only in cash and the securities provided for under thefollowing sections: NRS 682A.060(public obligations), NRS 682A.070(obligations, stock of certain federal and international agencies), NRS 682A.080 (corporate obligations), NRS 682A.160 (equipment trust certificates).

4. Revenue bonds of public utilities. An insurer shallnot have invested at any one time more than 25 percent of its assets in revenuebonds of public utilities described in NRS682A.080.

5. Corporate obligations. An insurer shall not haveinvested at any one time more than 20 percent of its assets in other corporateobligations described in NRS 682A.080.

6. Equipment trust certificates. An insurer shall nothave invested at any one time more than 20 percent of its assets in equipmenttrust certificates described in NRS682A.160.

7. Real property encumbrances. An insurer shall not atany one time have more than 50 percent of its assets invested in obligationssecured by real property mortgages, trust deeds, contracts of purchase or othersimilar encumbrances of real property.

8. Other specific limits. Limits as to investments inthe category of real property shall be as provided in NRS 682A.240; and other specific limitsshall apply as stated in this chapter dealing with other respective kinds ofinvestments.

(Added to NRS by 1971, 1618)

NRS 682A.060 Publicobligations.

1. An insurer may invest in bonds or other evidencesof indebtedness, not in default as to principal or interest, which are validand legally authorized obligations issued, assumed or guaranteed by the UnitedStates of America or by any state thereof, or by Canada or any of the provincesthereof, or by the United States of Mexico or any of the states thereof, or byany county, city, town, village, municipality or district therein or by anypolitical subdivision thereof or by a public instrumentality of one or more ofthe foregoing, if, by statutory or other legal requirements applicable thereto,such obligations are payable, as to both principal and interest, from:

(a) Taxes levied or required to be levied upon alltaxable property or all taxable income within the jurisdiction of suchgovernmental unit; or

(b) Adequate special revenues pledged or otherwiseappropriated or by law required to be provided for the purpose of such payment;but not including any obligation payable solely out of special assessments onproperties benefited by local improvements unless adequate security isevidenced by the ratio of assessment to the value of the property or theobligation is additionally secured by an adequate guaranty fund required bylaw.

2. An insurer may invest in bonds or other evidencesof indebtedness of political subdivisions of states of the United States ofAmerica or provinces of Canada payable from ad valorem taxes levied on alltaxable property situated therein only if the total amount of such indebtednessafter deducting sinking funds and all debts incurred for self-sustaining publicworks does not exceed 10 percent of the actual value of all taxable propertytherein on the basis of which the last assessment was made before the date ofsuch investment.

(Added to NRS by 1971, 1619)

NRS 682A.070 Obligationsand stock of certain federal and international agencies. An insurer may invest in the obligations, and in stockthat are stated, issued, assumed or guaranteed by the following agencies of the United States, or in which the Federal Government is a participant, whetheror not those obligations are guaranteed by the Federal Government:

1. Farm Loan Bank.

2. Commodity Credit Corporation.

3. Federal Intermediate Credit Banks.

4. Federal Land Banks.

5. Central Bank for Cooperatives.

6. Federal Home Loan Banks, and stock thereof.

7. Federal National Mortgage Association, and stockthereof if acquired in connection with the sale of loans for mortgages to thatassociation.

8. United States Postal Service.

9. International Bank for Reconstruction andDevelopment.

10. Inter-American Development Bank.

11. Asian Development Bank.

12. African Development Bank.

13. Any other similar agency of, or participated inby, the United States and of similar financial stability.

(Added to NRS by 1971, 1620; A 1971, 1938; 1985, 654)

NRS 682A.080 Corporateobligations.

1. An insurer may invest any of its funds inobligations other than those eligible for investment under NRS 682A.230, relating to real propertymortgages, if they are issued, assumed or guaranteed by any solvent institutionand are qualified under any of the following:

(a) Obligations which are secured by adequatecollateral security and bear fixed interest if, during each of any 3, includingthe last 2, of the 5 fiscal years next preceding the date of acquisition by theinsurer, the net earnings of the issuing, assuming or guaranteeing institutionavailable for its fixed charges, as defined in NRS 682A.090, have been not less than 11/2 times the total of its fixed charges for that year. In determining theadequacy of collateral security, not more than one-third of the total value ofthe required collateral may consist of stock other than stock meeting therequirements of NRS 682A.100, relatingto preferred or guaranteed stock.

(b) Fixed interest-bearing obligations, other thanthose described in paragraph (a), if the net earnings of the issuing, assumingor guaranteeing institution available for its fixed charges for a period of 5fiscal years next preceding the date of acquisition by the insurer haveaveraged per year not less than 1 1/2 times its average annual fixed chargesapplicable to that period and if, during the last year of that period, the netearnings have been not less than 1 1/2 times its fixed charges for that year.

(c) Adjustment, income or other contingent interestobligations if the net earnings of the issuing, assuming or guaranteeinginstitution available for its fixed charges for a period of 5 fiscal years nextpreceding the date of acquisition by the insurer have averaged per year notless than 1 1/2 times the sum of its average annual fixed charges and itsaverage annual maximum contingent interest applicable to such period and if,during each of the last 2 years of that period, the net earnings have not beenless than 1 1/2 times the sum of its fixed charges and maximum contingent interestfor such year.

(d) Capital stock and other securities of:

(1) A state development corporation organizedunder the provisions of chapter 670 of NRS.

(2) A corporation for economic revitalizationand diversification organized under the provisions of chapter 670A of NRS, if the insurer is a memberof the corporation, and to the extent of its loan limit established under NRS 670A.200.

2. No insurer may invest in any such bonds orevidences of indebtedness in excess of 10 percent of any issue of such bonds orevidences of indebtedness or, subject to subsection 1 of NRS 682A.050, relating todiversification, more than an amount equal to 10 percent of the insurersadmitted assets in any issue.

(Added to NRS by 1971, 1620; A 1975, 1828; 1983,1281; 2003, 3288)

NRS 682A.090 Definitions;net earnings.

1. Certain terms used are defined for the purposes ofthis chapter as follows:

(a) Fixed charges includes interest on funded andunfunded debt, amortization of debt discount and rentals for leased properties.

(b) Institution includes corporations, joint-stockassociations and business trusts.

(c) Net earnings available for fixed charges meansnet income after deducting operating and maintenance expenses, taxes other thanfederal and state income taxes, depreciation and depletion, but excludingextraordinary nonrecurring items of income or expense appearing in the regularfinancial statements of such institutions.

(d) Obligation includes bonds, debentures, notes orother evidences of indebtedness.

2. If net earnings are determined in reliance uponconsolidated earnings statements of parent and subsidiary institutions, suchnet earnings shall be determined after provision for income taxes ofsubsidiaries and after proper allowance for minority stock interest, if any;and the required coverage of fixed charges shall be computed on a basisincluding fixed charges and preferred dividends of subsidiaries other thanthose payable by such subsidiaries to the parent corporation or to any other ofsuch subsidiaries, except that if the minority common stock interest in thesubsidiary corporation is substantial, the fixed charges and preferreddividends may be apportioned in accordance with regulations prescribed by theCommissioner.

(Added to NRS by 1971, 1621)

NRS 682A.100 Preferredor guaranteed stock.

1. An insurer may invest in preferred or guaranteedstocks or shares of any solvent institution if all of the prior obligations andprior preferred stocks, if any, of the institution at the date of acquisitionof the investment by the insurer are eligible as investments under this chapterand if the net earnings of the institution available for its fixed chargesduring either of the last 2 years have been, and during each of the last 5years have averaged, not less than 1 1/2 times the sum of its average annualfixed charges, if any, its average annual maximum contingent interest, if any,and its average annual preferred dividend requirements. For the purposes ofthis section, the computation refers to the fiscal years immediately precedingthe date of acquisition of the investment by the insurer, and the termpreferred dividend requirement means cumulative or noncumulative dividends,whether paid or not.

2. No insurer may invest in any such preferred orguaranteed stocks in an amount in excess of 35 percent of the particular issueof guaranteed or preferred stock or, subject to subsection 1 of NRS 682A.050, more than an amount equalto 10 percent of the insurers admitted assets in any one issue.

(Added to NRS by 1971, 1622; A 2001, 2188; 2003, 3289)

NRS 682A.110 Commonstocks.

1. An insurer may invest up to 35 percent of itsassets in nonassessable common stocks, other than insurance stocks, of anysolvent corporation, except that bank or trust company stocks may be assessableand any stocks may be assessable for taxes if the corporation has had netearnings available for dividends on the stock in each of the 5 fiscal yearsnext preceding acquisition by the insurer. If the issuing corporation has notbeen in legal existence for all of the 5 fiscal years but was formed as aconsolidation or merger of two or more businesses of which at least one was inoperation on a date 5 years before the investment, the test of eligibility ofits common stock under this section must be based upon consolidated pro formastatements of the predecessor or constituent institutions.

2. Any amount invested in a fund or trust under NRS 682A.140 must not be included incomputing the amounts prescribed in subsection 1.

(Added to NRS by 1971, 1622; A 2001, 2188; 2003, 3289)

NRS 682A.120 Insurancestocks.

1. An insurer may invest in the stocks of othersolvent insurers formed under the laws of this or another state, which stocksmeet the applicable requirements of NRS682A.100 (preferred or guaranteed stock) and NRS 682A.110 (common stocks).

2. With the Commissioners advance written consent aninsurer may acquire and hold the controlling interest in the outstanding votingstock of another insurer formed under the laws of this or another state. Allstocks under this subsection shall be subject to the limitation as to amount asprovided in NRS 682A.130. The Commissionershall not give his consent to any such acquisition if he finds that it wouldnot be in the best interests of the insurers involved, or of their respectivepolicyholders or stockholders, or that such acquisition would materially tendto lessen competition or to result in any monopoly in the insurance business.

(Added to NRS by 1971, 1622)

NRS 682A.130 Stocksof subsidiaries.

1. An insurer may invest in the stock of a subsidiaryinsurance corporation formed or acquired by it, or in the stock of a subsidiarybusiness corporation formed and engaged solely in any one or more of thefollowing businesses:

(a) A business necessary and incidental to theconvenient operation of the insurers insurance business or to the administrationof any of its lawful affairs;

(b) Providing any actuarial, computer, data processing,accounting, claims, appraisal, collection, sales, loss prevention or safetyengineering and similar services;

(c) Real property management and development;

(d) Premium financing;

(e) Financing of agents of the insurer;

(f) Acting as investment adviser and principalunderwriter or investment adviser or principal underwriter of a managementcompany or management companies (mutual funds), registered as such under theInvestment Company Act of 1940;

(g) Financial and investment counseling services;

(h) Administration of self-insurance plans;

(i) Administration of self-insured pension and similarplans, or the self-insured portions of such plans;

(j) Securities broker-dealer;

(k) Escrow services;

(l) Trust services with respect to funds payable orpaid by it under its insurance contracts;

(m) Bank, savings and loan association or thriftcompany; or

(n) Insurance agency.

2. For the purposes of this section, a subsidiary isa corporation of which the insurer owns sufficient stock to give it effectivecontrol.

3. All of the insurers investments under this sectionshall be deemed to be common stocks for the purposes of the limitation imposedby NRS 682A.110 on the percentage ofadmitted assets which may be invested in common stock.

(Added to NRS by 1971, 1623; A 1991, 255; 2001, 2189)

NRS 682A.140 Commontrust funds; mutual funds. An insurer mayinvest in:

1. A banks common trust fund as defined in section584 of the United States Internal Revenue Code of 1954; and

2. The securities of any open-end management typeinvestment company or investment trust registered with the Securities andExchange Commission under the Investment Company Act of 1940, as from time totime amended, if such investment company or trust has assets of not less than$25,000,000 at the date of investment by the insurer.

(Added to NRS by 1971, 1623)

NRS 682A.150 Bankersacceptances and bills of exchange. An insurermay invest in bankers acceptances and bills of exchange of the kinds andmaturities made eligible by law for rediscount with Federal Reserve Banks, andgenerally accepted by banks or trust companies which are members of the FederalReserve System.

(Added to NRS by 1971, 1624)

NRS 682A.160 Equipmenttrust obligations or certificates. An insurermay invest in equipment trust obligations or certificates adequately securedand evidencing an interest in transportation equipment, wholly or in partwithin the United States of America or Canada, which obligations orcertificates carry the right to receive determined portions of rental, purchaseor other fixed obligatory payments to be made for the use or purchase of suchtransportation equipment.

(Added to NRS by 1971, 1624)

NRS 682A.170 Loanssecured by policy. A life insurer may lend toits policyholder, upon pledge of the policy as collateral security, any sum notexceeding the cash surrender value of the policy, or may lend against pledge orassignment of any of its supplementary contracts or other contracts orobligations, so long as the loan is adequately secured by such pledge orassignment. Loans so made are eligible investments of the insurer.

(Added to NRS by 1971, 1624)

NRS 682A.180 Collateralloans. An insurer may lend and thereby investits funds upon the pledge of securities eligible for investment under thischapter. As of the date made, the loan must not exceed in amount 90 percent ofthe market value of the collateral pledged.

(Added to NRS by 1971, 1624; A 2005, 2120)

NRS 682A.190 Savingsand share accounts. An insurer may invest inshare or savings accounts of thrift companies, credit unions or savings andloan associations, or in savings accounts of banks, and in any one suchinstitution only to the extent that the investment is insured by the FederalDeposit Insurance Corporation, the National Credit Union Share Insurance Fundor a private insurer approved pursuant to NRS677.247 or 678.755.

(Added to NRS by 1971, 1624; A 1983, 154; 1993, 2818;1999, 1548; 2001, 2189)

NRS 682A.200 Miscellaneousinvestments; records.

1. An insurer may make loans or investments nototherwise expressly permitted under this chapter, in an aggregate amount notover 10 percent of the insurers admitted assets and not over 5 percent ofthose assets as to any one such loan or investment, if the loan or investmentfulfills the requirements of NRS 682A.030and otherwise qualifies as a sound investment. No such loan or investment maybe represented by:

(a) Any item described in NRS 681B.020, or any loan or investmentotherwise expressly prohibited.

(b) Agents balances, or amounts advanced to or owingby agents, except as to policy loans, mortgage loans and collateral loansotherwise authorized under this chapter.

(c) Any category of loans or investments expresslyeligible under any other provision of this chapter.

(d) Any asset acquired or held by the insurer under anyother category of loans or investments eligible under this chapter.

2. The insurer shall keep a separate record of allloans and investments made under this section.

(Added to NRS by 1971, 1624; A 2001, 2189; 2005, 2120)

NRS 682A.210 Specialaccounts. The amounts allocated to eachseparate account established by the insurer pursuant to NRS 688A.390 (separate accounts), togetherwith accumulations thereon, may be invested or reinvested in accordance withthe provisions of NRS 688A.390.

(Added to NRS by 1971, 1625)

NRS 682A.220 Specialinvestments of title insurers.

1. A title insurer may invest funds in an amount notexceeding 50 percent of its subscribed capital stock in its abstract plant andequipment and in stocks of abstract companies.

2. In all statements and proceedings required fordetermination of the insurers condition, such investments shall be valued atthe actual cost thereof, or at such lesser value as the insurer may estimate.

(Added to NRS by 1971, 1625)

NRS 682A.230 Mortgagesand deeds of trust.

1. An insurer may invest in bonds or notes secured bymortgages or deeds of trust representing first or second liens upon realproperty located in this or another state, or in Canada, subject to thefollowing conditions:

(a) The amount loaned, or the aggregate amount of bondsissued upon the security of a mortgage or deed of trust, must not at the timeof the investment exceed 85 percent of the fair market value of the realproperty. The value of the property must be substantiated by the appraisal of arecognized or experienced real estate appraiser acceptable to the Commissioner.Before making the investment, a certificate of the value of the property, basedon the appraisal, must be executed by the insurers board of directors or by aninvestment committee of the board of directors making or authorizing theinvestment on the insurers behalf.

(b) There must have been no default as to payment ofany part of the principal or interest of any such bond or note.

(c) The total investment in any one such note, or bondor bonds secured by the same real property, must not exceed $100,000 or 5percent of the insurers assets, whichever is greater.

(d) In applying the limitation under paragraph (a),there may be excluded from the amount invested that portion of the investmentwhich is guaranteed by the Executive Director for Veterans Services pursuantto the Servicemens Readjustment Act of 1944, as amended, or insured by theFederal Housing Administrator or other agency of the Government of the UnitedStates, or by an agency of the Government of Canada.

2. Improved real property means all farmland whichhas been reclaimed and is used for the purpose of husbandry, whether fortillage or pasture, and all real property within the limits of an incorporatedvillage, town or city on which permanent buildings suitable for residence orcommercial use are situated.

3. For the purposes of this section, real propertyshall not be deemed to be encumbered:

(a) By reason of the existence of taxes or assessmentswhich are not delinquent, instruments creating or reserving mineral, oil ortimber rights, rights-of-way, joint driveways, sewer rights, rights in walls,or by reason of building restrictions or other restrictive covenants; or

(b) When such real property is subject to lease inwhole or in part whereby rents or profits are reserved to the owner, if thesecurity for such investment is a full and unrestricted first lien upon suchreal property and there is no condition or right of reentry or forfeiture underwhich such investments can be cut off, subordinated or otherwise disturbed.

(Added to NRS by 1971, 1625; A 2005, 2121)

NRS 682A.240 Realproperty.

1. A domestic insurer may invest in real property onlyif used for the purposes or acquired in any manner, and within limits, setforth below:

(a) The building in which it has its principal office,the land upon which the building stands, and such other real property as may berequisite for the insurers convenient accommodation in the transaction of itsbusiness. The amount so invested, and apportioned as to space actually sooccupied or used, must not aggregate more than 15 percent of the insurersassets; but the Commissioner may authorize an insurer to increase the investmentin such amount as he may determine if, upon proper showing made upon a hearingheld by him, he finds that the 15-percent limitation is insufficient to providereasonable and convenient accommodation for the insurers business.

(b) Real property acquired in satisfaction or partpayment of loans, mortgages, liens, judgments, decrees or debts previouslyowing to the insurer in the due course of its business.

(c) Real property acquired in part payment of theconsideration on the sale of other real property owned by it, if thetransaction has effected a net reduction in the insurers investments in realproperty.

(d) Real property acquired by gift or devise, orthrough merger, consolidation or bulk reinsurance of another insurer under thisCode.

(e) Additional real property and equipment incidentalthereto, if necessary or convenient for the purpose of enhancing the sale orother value of real property previously acquired or held under this section.The additional real property and equipment, together with the real property forthe enhancement of which it was acquired, must be included together, for thepurpose of applicable investment limits, and is subject to disposal under NRS 682A.250 at the same time and underthe same conditions as apply to the enhanced real property.

(f) Real property, or any interest therein, acquired orheld by purchase, lease or otherwise, other than real property to be usedprimarily for mining, development of oil or mineral resources, recreational,amusement, hotel, motel or club purposes, acquired as an investment forproduction of income, or acquired to be improved or developed for investmentpurposes pursuant to an existing program therefor. The insurer may hold,mortgage, improve, develop, maintain, manage, lease, sell, convey and otherwisedispose of real property acquired by it under this section. An insurer may nothave at any one time invested in real property under this paragraph more than20 percent of its admitted assets.

2. Total investments of the insurer in real propertyunder this section may not at any time exceed 35 percent of the insurersadmitted assets.

(Added to NRS by 1971, 1626; A 1981, 632; 2001, 2190)

NRS 682A.250 Timelimited for disposal of real property.

1. Except as stated in subsection 2, or unless theinsurer elects to hold the real property as an investment under paragraph (f)of subsection 1 of NRS 682A.240:

(a) An insurer shall dispose of real property acquiredunder paragraph (a) of subsection 1 of NRS682A.240 within 5 years after it has ceased to be necessary for theconvenient accommodation of the insurer in the transaction of its business.

(b) An insurer shall dispose of real property acquiredunder paragraphs (b), (c) and (d) of subsection 1 of NRS 682A.240 within 3 years after thedate of acquisition, unless used or to be used for the insurers accommodationunder paragraph (a) of subsection 1 of NRS682A.240.

2. Upon proof satisfactory to him that the interestsof the insurer will suffer materially by the forced sale thereof, thecommissioner may by order grant a reasonable extension of the period, asspecified in such order, within which the insurer shall dispose of anyparticular parcel of such real property.

(Added to NRS by 1971, 1627)

NRS 682A.260 Timelimited for disposal of other ineligible property and securities. Any personal property or securities lawfully acquired byan insurer which it could not otherwise have invested in or loaned its fundsupon at the time of such acquisition shall be disposed of within 3 years fromthe date of acquisition unless within such period the security has attained tothe standard of eligibility; but any security or personal property acquiredunder any agreement of bulk reinsurance, merger or consolidation may beretained for a longer period if so provided in the plan for such reinsurance,merger or consolidation as approved by the Commissioner under NRS 693A.330 to 693A.370, inclusive. Upon application bythe insurer and proof that forced sale of any such property or security wouldmaterially injure the interests of the insurer, the Commissioner may extend thedisposal period for an additional reasonable time.

(Added to NRS by 1971, 1627)

NRS 682A.270 Failureto dispose of real property, personal property or securities: Effect; penalty.

1. Any real property, personal property or securitieslawfully acquired and held by an insurer after expiration of the period fordisposal thereof or any extension of such period granted by the Commissioner asprovided in NRS 682A.250 and 682A.260 shall not be allowed as an assetof the insurer.

2. The insurer shall forthwith dispose of anyineligible investment unlawfully acquired by it, and the Commissioner shallsuspend or revoke the insurers certificate of authority if the insurer failsto dispose of the investment within such reasonable time as the Commissionermay, by his order, specify.

(Added to NRS by 1971, 1628)

NRS 682A.280 Prohibitedinvestments and underwriting.

1. In addition to investments excluded pursuant toother provisions of this Code, an insurer shall not acquire, invest in or lendits funds upon the security of:

(a) Issued shares of its own capital stock, except asprovided in NRS 693A.170 (purchase ofown shares by stock insurer). No such shares shall be considered as an asset ofthe insurer in any determination of its financial condition.

(b) Securities issued by any corporation or enterprisethe controlling interest of which is, or will after such acquisition by theinsurer be, held directly or indirectly by the insurer or any combination ofthe insurer and the insurers directors, officers, subsidiaries or controllingstockholders (other than a parent corporation), and the spouses and children ofany of the foregoing individuals. Investments in controlled insurancecorporations or subsidiaries under NRS682A.120 and 682A.130 are notsubject to the provisions of this section.

(c) Any note or other evidence of indebtedness of anydirector, officer, employee or controlling stockholder of the insurer, or ofthe spouse or child of any of the foregoing individuals, except as to policyloans authorized under NRS 682A.170.

(d) Any real property in which any officer or directorof the insurer has a financial interest.

2. No insurer shall underwrite or participate in theunderwriting of an offering of securities or property of any other person. Thissection shall not be deemed to prohibit the insurer from being a subsidiarywhich is the principal underwriter of a registered investment company (mutualfund).

3. No insurer shall enter into any agreement towithhold from sale any of its securities or property, and the disposition ofits assets shall at all times be within the control of the insurer.

(Added to NRS by 1971, 1628)

NRS 682A.290 Investmentsof foreign insurers.

1. A foreign or alien insurer may make investmentspermitted by the laws of its domicile if its portfolio of investments is of aquality substantially equal to that required under this chapter for similarfunds of like domestic insurers.

2. The provisions of this chapter do not prohibit aforeign or alien insurer from making investments in agricultural real propertyor ranches.

(Added to NRS by 1971, 1629; A 1981, 633)

 

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