(a) (1) An insurer may acquire under this section investments, or engage in investment practices, of any kind that are not specifically prohibited by this subsection or elsewhere in the Arkansas Insurance Code, or engage in investment practices, without regard to any aggregate limitation in this subchapter, but an insurer shall not admit an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments then held by the insurer under this section would exceed the lesser of:

(A) Ten percent (10%) of its admitted assets; or

(B) Seventy-five percent (75%) of its total capital and surplus.

(2) This additional authority shall not apply to the following investments:

(A) Medium grade or lower grade-rated credit instruments;

(B) Mortgages or mortgage loans;

(C) Total of real estate, both home office and real estate held for investment income, except with the Insurance Commissioner's advance approval;

(D) Foreign investments and foreign currency exposures; and

(E) Derivatives.

(3) As used in subsection (a) of this section, "insurer" means licensed domestic life and/or accident and health insurers or other licensed domestic reporting entities which transact life and/or accident or health contracts or plans in this state.

(b) (1) An insurer may acquire under this section investments, or engage in investment practices, of any kind that are not specifically prohibited by this subchapter, or engage in investment practices, without regard to any aggregate limitation in this subchapter, but an insurer shall not admit an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments then held by the insurer under this section would exceed the lesser of:

(A) Ten percent (10%) of its admitted assets; or

(B) Seventy-five percent (75%) of its total capital and surplus.

(2) This additional authority shall not apply to the following investments:

(A) Medium grade or lower grade-rated credit instruments;

(B) Equity interests;

(C) Mortgages or mortgage loans;

(D) Total of real estate, both home office and real estate held for investment income, except with the commissioner's advance approval;

(E) Foreign investments and foreign currency exposures; and

(F) Derivatives.

(4) As used in subsection (b) of this section, "insurer" means domestic property, casualty, surety and/or marine, financial guaranty, and mortgage guaranty insurers, and domestic insurers transacting title insurance.

(c) If upon enactment, the immediate application of the provisions of this section would have the effect of reducing the admitted asset value of assets held by a particular insurer, the insurer may continue to reflect as admitted those assets that would be admissible but for the enactment of the provisions of this section, until December 31, 2004.