(a) An insurer may invest in preferred or guaranteed stocks or shares of any solvent institution existing under the laws of the United States or of Canada, or of any state or province thereof, if at the date of the acquisition of the investment by the insurer:
(1) The net earnings of the institution available for its fixed charges during each of the last two (2) years have been, and during each of the last five (5) years have averaged, not less than one and one-half (11/2) times the sum of its average annual fixed charges, if any, its average annual maximum contingent interest, if any, and its average annual preferred dividend requirements; or
(2) The securities are:
(A) Rated "1" or "2" by the Securities Valuation Office of the National Association of Insurance Commissioners; or
(B) Exempt under the Purposes and Procedures Manual of the Securities Valuation Office of the National Association of Insurance Commissioners.
(b) For the purposes of this section, the computation shall refer to the fiscal years immediately preceding the date of acquisition of the investment by the insurer, and the term "preferred dividend requirement" shall be deemed to mean cumulative or noncumulative dividends, whether paid or not.
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