(a) An insurer may invest in mortgage-backed securities, including without limitation collateralized mortgage obligations and other obligations for the payment of money secured by participation certificates or loans secured, directly or indirectly, by real estate mortgages or deeds of trust if, at the time the investment is made:

(1) The entity issuing the obligation is not in default in the payment of interest on the obligation;

(2) The specific investment within that collateralized mortgage obligation is not a zero coupon class, residual interest, or a class designated as principal or interest only;

(3)

(A) The obligation, participation certificate, or loan is fully guaranteed or insured, as to principal and interest, by the United States, an agency or instrumentality of the United States, or any state or territory of the United States or any agency thereof.

(B) The aggregate value of any one (1) issue of an obligation under subdivision (a)(3)(A) of this section shall not exceed five percent (5%) of the insurer's admitted assets; or

(4)

(A) The obligation, participation certificate, or loan is held by the issuer directly or through a trustee for the benefit of the obligee.

(B) The aggregate value of any one (1) issue of an obligation under subdivision (a)(4)(A) of this section shall not exceed three percent (3%) of the insurer's admitted assets.

(b)

(1) The aggregate value of an insurer's investments under subdivision (a)(3)(A) of this section shall not exceed fifty percent (50%) of the insurer's admitted assets.

(2) The aggregate value of an insurer's investments under subdivision (a)(4)(A) of this section shall not exceed fifteen percent (15%) of the insurer's admitted assets unless the insurer received prior approval from the Insurance Commissioner for a specified amount not to exceed thirty percent (30%) of the insurer's admitted assets.

(c) An insurer may invest up to ten percent (10%) of its assets in zero coupon, residual interest, or principal-and-interest-only classes of mortgage-backed securities if the underlying mortgages pledged to the repayment of principal and interest of the mortgage-backed securities are unconditionally guaranteed as to timely repayment of principal and interest by the United States or any agency or instrumentality of the United States.

(d) For purposes of the "one person" diversification restriction under § 23-63-805(1), mortgage-backed securities issued by the United States or any agency or instrumentality of the United States shall not be considered investments in or loans upon the security of the obligations, property, or securities of the United States or any agency or instrumentality of the United States.