(1) Domestic insurance companies may invest in lawfully issued interest-bearing bonds, including bonds which provide for imputed interest payable at maturity, revenue bonds, and debentures, and other evidences of indebtedness:

(a) Of the United States or any agency or instrumentality thereof, or of any state, territory, district, or political subdivision of the United States;

(b) Guaranteed or insured as to the payment of principal and interest by the United States or any agency or instrumentality thereof, or by any state, territory, district, or political subdivision of the United States;

(c) Of counties, districts, townships, municipalities, and political subdivisions within the states, territories, and districts of the United States; except that investment in special improvement district obligations shall be limited to those which have received a designation or rating equivalent to or better than those specified in subsection (2)(b) of this section or, if not so designated or rated, have a credit enhancement approved by the commissioner;

(d) Of the Dominion of Canada and provinces and districts thereof and of counties, districts, townships, municipalities, and political subdivisions thereof, or guaranteed or insured asto the payment of principal and interest by the dominion of Canada or by any province or district thereof;

(e) Of solvent institutions created under the laws of the United States or of any state, territory, or district thereof, or of the dominion of Canada or any province thereof, which institutions are not referenced in paragraph (a), (b), (c), or (d) of this subsection (1) and which are not in default in the payment of interest on any of their bonds at the time the investment is made; but the aggregate value of all bonds and other evidences of indebtedness of any one such institution which may be admitted assets under this section shall not exceed three percent of the domestic insurance company's admitted assets, except as to those bonds and other evidences of indebtedness of insurance companies admitted to do business in any state of the United States or in the District of Columbia, for coinsurance or reinsurance purposes, in which case they shall not exceed the greater of three percent of the domestic insurance company's admitted assets or five percent of the debtor insurance company's admitted assets, or except as may be otherwise authorized under section 10-3-802;

(f) Of farm credit banks and banks for cooperatives, or other similar corporations organized under the laws of the United States;

(g) Repealed.

(h) Issued by, or guaranteed or insured as to the payment of principal and interest by, any foreign government other than those listed in paragraph (d) of this subsection (1); except that the aggregate value of all such bonds and other evidences of indebtedness which may be admitted assets pursuant to this paragraph (h) and paragraph (i) of this subsection (1) shall not exceed twenty percent of the domestic insurance company's admitted assets, and except that the aggregate amount of foreign investments that may be admitted assets pursuant to this paragraph (h) and to paragraph (i) of this subsection (1) in a single foreign jurisdiction shall not exceed:

(I) Ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating from a nationally recognized statistical rating organization recognized by the securities valuation office of the national association of insurance commissioners equivalent to securities valuation office rating 1 in the then current purposes and procedures manual of the securities valuation office; or

(II) Three percent of its admitted assets as to any other foreign jurisdiction.

(i) Of solvent foreign institutions other than those specified in paragraphs (e) and (j) of this subsection (1) which are not in default in the payment of interest on any of their bonds at the time the investment is made; except that the aggregate value of all such bonds and other evidences of indebtedness which may be admitted assets pursuant to this paragraph (i) and paragraph (h) of this subsection (1) shall not exceed twenty percent of the domestic insurance company's admitted assets, and except that the aggregate amount of foreign investments that may be admitted assets pursuant to this paragraph (i) and to paragraph (h) of this subsection (1) in a single foreign jurisdiction shall not exceed:

(I) Ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating from a nationally recognized statistical rating organization recognized by the securities valuation office of the national association of insurance commissioners equivalent to securities valuation office rating 1 in the then current purposes and procedures manual of the securities valuation office; or

(II) Three percent of its admitted assets as to any other foreign jurisdiction.

(j) Issued by, or guaranteed or insured as to the payment of principal and interest by, the international bank for reconstruction and development, the inter-American development bank, the African development bank, or the Asian development bank; but the aggregate value of all bonds and other evidences of indebtedness which may be admitted assets pursuant to this paragraph (j) shall not exceed five percent of the domestic insurance company's admitted assets.

(2) Domestic insurance companies 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, the entity issuing the obligation is not in default in the payment of interest on the obligation and:

(a) The obligation or each participation certificate or loan is fully guaranteed or insured as to principal and interest by the United States or by any state, territory, or district thereof, or by any agency, instrumentality, or political subdivision of one or more of the foregoing; but the aggregate value of any one issue of such obligations which may be admitted assets pursuant to this paragraph (a) shall not exceed five percent of the domestic insurance company's admitted assets; or

(b) The obligations have received a "1" or "2" quality designation by the securities valuation office of the national association of insurance commissioners as set forth in its most recently published valuations of securities manual or are rated investment grade in Standard Poor's (at least BBB-) or Moody's (at least Baa3) bond guides, or have received comparable designations or ratings in the event the method of presenting such designations or ratings later changes or such designations or ratings are provided by successor entities, or have received comparable investment grade designations or ratings by any similar organization approved by the commissioner; but the aggregate value of any one issue of such obligations which may be admitted assets pursuant to this paragraph (b) shall not exceed three percent of the domestic insurance company's admitted assets.