26-7-107. Authorized investments.

(a) An insurer may invest in:

(i) Bonds or other evidences of indebtedness, not in default as to principal or interest, which are valid and legally authorized obligations issued, assumed or guaranteed by the United States or Canada or by any state, territory, possession or province thereof, or by any county, city, town, village, municipality or other political subdivision or public instrumentality of one (1) or more of the governmental units specified, if, by statutory or other legal requirements applicable thereto, the obligations are payable as to both principal and interest from:

(A) Taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of the governmental unit; or

(B) Adequate special revenues pledged or otherwise appropriated or by law required to be provided for that payment, but not including any obligation payable solely out of special assessments on properties benefited by local improvements unless adequate security is evidenced by the ratio of assessment to the value of the property or the obligation is additionally secured by an adequate guaranty fund required by law.

(ii) The obligations and stock if stated, issued, assumed or guaranteed by the following agencies of the United States government, or in which that government is a participant, whether or not it guarantees the obligations:

(A) Commodity credit corporation;

(B) Federal intermediate credit banks;

(C) Federal land banks;

(D) Banks for cooperatives;

(E) Federal home loan banks, and stock thereof;

(F) Federal national mortgage association and stock thereof when acquired in connection with sale of mortgage loans to the association;

(G) International bank for reconstruction and development;

(H) Inter-American development bank;

(J) Any other similar agency of, or participated in by, the United States government and of similar financial quality.

(iii) Obligations other than those eligible for investment under W.S. 26-7-107(a)(xii) if they are issued, assumed or guaranteed by any solvent institution created or existing under the laws of the United States or Canada or of any state, district, territory or province thereof, and are qualified under any of the following:

(A) Obligations which are secured by adequate collateral security and bear fixed interest if during each of any three (3), including the last two (2), of the five (5) fiscal years immediately preceding the date of the insurer's acquisition, the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges, as defined in W.S. 26-7-102, have been not less than one and one-fourth (1 1/4) times the total of its fixed charges for that year. In determining the adequacy of collateral security not more than one-third (1/3) of the total value of the required collateral shall consist of stock other than stock meeting the requirements of W.S. 26-7-107(a)(iv);

(B) Fixed interest-bearing obligations, other than those described in subparagraph (a)(iii)(A) of this section, if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years immediately preceding the date of the insurer's acquisition have averaged per year not less than one and one-half (1 1/2) times its average annual fixed charges applicable to that period and if during the last year of that period the net earnings have been not less than one and one-half (1 1/2) times its fixed charges for that year;

(C) Adjustment, income or other contingent interest obligations if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years immediately preceding the date of the insurer's acquisition have averaged per year not less than one and one-half (1 1/2) times the sum of its average annual fixed charges and its average annual maximum contingent interest applicable to that period and if during each of the last two (2) years of that period the net earnings have been not less than one and one-half (1 1/2) times the sum of its fixed charges and maximum contingent interest for each year.

(iv) 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 all of the prior obligations and prior preferred stocks, if any, of the institution at the date of the insurer's acquisition of the investment are eligible as investments under this chapter and if 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 (1 1/2) 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. For the purposes of this paragraph the computation shall refer to the fiscal years immediately preceding the date of the insurer's acquisition of the investment, and the term "preferred dividend requirement" means cumulative or noncumulative dividends, whether paid or not;

(v) Nonassessable common stocks, other than insurance stocks, of any solvent corporation organized and existing under the laws of the United States or Canada, or of any state or province thereof, if the corporation has had net earnings available for dividends on its stock in each of the five (5) fiscal years immediately preceding the insurer's investment therein. If the issuing corporation has not been in legal existence for the whole of the five (5) fiscal years but was formed as a consolidation or merger of two (2) or more businesses of which at least one (1) was in operation on a date five (5) years prior to the investment, the test of eligibility of its common stock under this paragraph shall be based upon consolidated pro forma statements of the predecessor or constituent institutions;

(vi) Stocks of other solvent insurers formed under the laws of this or another state, which stocks meet the applicable requirements of W.S. 26-7-107(a)(iv) and 26-7-107(a)(v). With the commissioner's advance written consent an insurer may acquire and hold the controlling interest in the outstanding voting stock of another stock insurer formed under the laws of this or another state, which stocks are limited as to amount as provided in W.S. 26-7-107(a)(vii). The commissioner shall not give his consent to any such acquisition if he finds it is not in the best interests of the insurers involved or of their policyholders or stockholders, or that the acquisition would materially tend to result in any monopoly in the insurance business;

(vii) Stock of a subsidiary insurance corporation it forms. All of the insurer's investments under this paragraph, together with its investments in insurance stocks under W.S. 26-7-107(a)(vi), shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its surplus to policyholders if other than a life insurer;

(viii) A bank's common trust fund as defined in section 584 of the United States Internal Revenue Code of 1954;

(ix) The securities of any open-end management type investment company or investment trust registered with the federal securities and exchange commission under the Investment Company Act of 1940 as from time to time amended, if the investment company or trust has assets of not less than twenty-five million dollars ($25,000,000.00) on the date of the insurer's investment;

(x) Equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, wholly or in part within the United States of America, which obligations or certificates carry the right to receive determined portions of rental, purchase or other fixed obligatory payments to be made for the use or purchase of the transportation equipment;

(xi) Share accounts, savings accounts of savings and loan associations or building and loan associations or in the savings accounts of banks;

(xii) First liens upon improved real property located in this or any other state or in Canada, subject to the following conditions:

(A) For liens on single family residence property the amount loaned shall not exceed seventy-five percent (75%) of the fair value of the property, and the loan shall be amortized within not more than thirty (30) years by payment of installments thereon at regular intervals not less frequent than every three (3) months;

(B) For liens on other improved real property the amount loaned shall not exceed sixty-six and two-thirds percent (66 2/3%) of the fair value of the property;

(C) No loan shall be made or acquired by the insurer unless the fair value of the property has been determined, for the purposes of the loan, by a qualified independent appraiser;

(D) In applying the limitations provided in subparagraphs (A) and (B) of this paragraph, the amount in which the loan is guaranteed by the administrator of veteran's affairs or insured by the federal housing administration or other United States or Canadian government agency may be excluded from the amount of the loan;

(E) Insurance not less comprehensive than fire and extended coverage shall be carried on the improvements on the property in an amount not less than the insurable value of the improvements, or the amount of the loan, whichever is less, and the policy evidencing the insurance endorsed to show the interest of the mortgagee. "Improved real property" means all farm lands used for tillage, crop, other than timber, or pasture, and all real property on which permanent improvements, installations or structures suitable for residence or construction of residences, or for commercial or industrial use, are situated;

(F) Subparagraphs (A), (B) and (C) of this paragraph do not apply to purchase money mortgages taken by the insurer upon sale of property theretofore owned by it and covering the real property. No such mortgage shall be for an amount exceeding the original unpaid balance of the purchase price.

(xiii) Real property as follows:

(A) The land and the buildings thereon occupied by it as its principal office and any other real property necessary in the transaction of its business, provided the amount so invested and apportioned as to space actually so occupied shall not aggregate more than fifteen percent (15%) of the insurer's assets;

(B) Acquired in satisfaction of loans, mortgages, liens, judgments, decrees or debts previously owing to the insurer in the course of its business;

(C) Acquired in part payment of the consideration of the sale of other real property it owns, if the transaction effects a net reduction in the insurer's investments in real property;

(D) Acquired by gift or devise or through merger, consolidation or bulk reinsurance of another insurer under this code;

(E) The seller's interest in real property subject to an agreement of purchase or sale, but the sum invested in the seller's interest shall not exceed two-thirds (2/3) of the fair value of the property;

(F) Improved real property, or any interest therein acquired or held by purchase, lease or otherwise, other than real property to be used primarily for agricultural, ranch, mining, development of oil or mineral resources, recreational, amusement, hotel, motel or club purposes, acquired as an investment for the production of income or acquired to be improved or developed for such investment purposes pursuant to an existing program therefor. The insurer may hold, improve, develop, maintain, manage, lease, sell and convey real property it acquires under this provision. An insurer shall not have at any time invested in real property under this subparagraph an amount exceeding fifteen percent (15%) of its assets. An investment in any single parcel of real estate acquired under this subparagraph after March 1, 1975, shall not exceed four percent (4%) of the company's assets;

(G) Additional real property and equipment incident to real property, if necessary or convenient for the purpose of enhancing the sale or other value of real property previously acquired or held under subparagraphs (B), (C), (D) or (F) of this paragraph. The real property and equipment shall be included, together with the real property for the enhancement of which it was acquired, for the purpose of applicable investment limits, and is subject to disposal at the same time and under the same conditions applying to the enhanced real property under W.S. 26-7-112;

(H) All real property owned by the insurer under this section, except as to seller's interest specified in subparagraph (E) of this paragraph, shall not at any time exceed thirty percent (30%) of the insurer's assets.

(xiv) Common stock, preferred stock, debt obligations, and other securities of one (1) or more subsidiary business corporations formed under the laws of this state and necessary and incidental to the insurer's insurance business or to the administration of any of its investments. The amount of the investment is governed by W.S. 26-44-102(b);

(xv) Nonassessable common stocks, other than insurance stocks, of any solvent corporation organized and existing under the laws of any foreign country, any such investment to be subject to the limitations of W.S. 26-7-106. At any one time, the aggregate amount of foreign investments shall not exceed twenty percent (20%) of the insurer's admitted assets.