2013 South Carolina Code of Laws
Title 38 - Insurance
CHAPTER 12 - SOUTH CAROLINA INVESTMENTS LAWS
SECTION 38-12-230. Rated credit instruments; federally backed mortgages.

(A) An insurer may acquire rated credit instruments, subject to the limitation of subsection (B) of this section, as follows:

(1) Subject to the limitation of Section 38-12-220(B), but not subject to the limitations of Section 38-12-220(A)(1), (2), and (3), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by the United States or a government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.

(2) Subject to the limitations of Section 38-12-220(B), but not subject to the limitations of Section 38-12-220(A), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by Canada or a government- sponsored enterprise of Canada, if the instruments of the government- sponsored enterprise are assumed, guaranteed, or insured by Canada or are backed or supported otherwise by the full faith and credit of Canada. An insurer may not acquire an instrument pursuant to this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer pursuant to this subsection exceeds forty percent of its admitted assets.

(3)(a) Subject to the limitations of Section 38-12-220(B), but not subject to the limitations of Section 38-12-220(A), an insurer may acquire rated credit instruments, excluding asset-backed securities:

(i) issued by a government money market mutual fund, a class one money market mutual fund, a class one bond mutual fund, or a multilateral development bank; or

(ii) issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible pursuant to subsection (A)(1) of this section, or a state, if the instruments are general obligations of the state;

(b) An insurer may not acquire an instrument of any one fund, enterprise, entity, or state pursuant to this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer in any one fund, enterprise, entity, or state pursuant to this subsection exceeds ten percent of its admitted assets.

(4) Subject to the limitations of Section 38-12-220, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if as a result of and after giving effect to the investment, the aggregate amount of preferred stocks then held by the insurer pursuant to this subsection:

(a) does not exceed twenty percent of its admitted assets; and

(b) that are not sinking fund stocks or rated P1 or P2 by the SVO or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO does not exceed ten percent of its admitted assets.

(5) Subject to the limitations of Section 38-12-220, in addition to those investments eligible pursuant to items (1), (2), (3), and (4) of this subsection, an insurer may acquire rated credit instruments that are not foreign investments.

(B) An insurer may not acquire special rated credit instruments pursuant to this section if as a result of and after giving effect to the investment the aggregate amount of special rated credit instruments then held by the insurer exceeds five percent of its admitted assets. The director may identify, by regulation, certain special rated credit instruments that are exempt from the provisions of this subsection.

(C) Obligations of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and other mortgage-backed or mortgage-related securities as defined in Section 106 of Title I of SMMEA (15 U.S. Code Section 77r-1) may be invested in to the same extent as permitted pursuant to subsection (A)(1), whether or not they are rated credit instruments authorized in that subsection.

HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.