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| Home > Statutes > USA New Jersey |
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USA Statutes : new_jersey
Title : TITLE 17 CORPORATIONS AND INSTITUTIONS FOR FINANCE AND INSURANCE
Chapter : 17:24-1
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17:24-1. Investments by insurance companies generally
Any insurance company of this State for the purpose of investing its capital, surplus and other funds, or any part thereof, may:
a. Purchase or hold as collateral security or otherwise and sell and transfer any bonds or public stock issued, created or guaranteed by the United States, or any territory or insular possession thereof, or the Commonwealth of Puerto Rico, or by this State, or by any of the other states of the United States or the District of Columbia, or by Canada or any of the provinces thereof, or by any of the incorporated cities, counties, parishes, townships or other municipal corporations situated in any of the places hereinabove mentioned; or bonds authorized to be issued by any commission appointed by the Supreme Court of this State as the said court was constituted prior to September 15, 1948.
b. Purchase or hold real estate for business or residential purposes (other than as provided for in sections 17:19-8 to 17:19-12, inclusive, of this Title) as an investment for the production of income, and improve or otherwise develop such real estate; provided, that if the commissioner shall determine, after due hearing upon notice to any such insurance company, that the interests of such insurance company@s policyholders require that any specified real estate so purchased or held be disposed of, then such insurance company shall dispose of such real estate within such reasonable time as the commissioner shall direct; and provided further, the aggregate amount of such investments for the production of income, but excluding real estate held as provided for in said sections 17:19-8 to 17:19-12, inclusive, shall not exceed 5% of the total admitted assets of such insurance company as of December 31 next preceding. The term ~real estate for business or residential purposes~ as used in this subsection b. shall include any real property used or operated as a part of or in connection with a business or a residential development, and shall also include a leasehold of such real estate having an unexpired term of not less than 20 years, inclusive of the term or terms which may be provided by any enforceable option or options of extension or of renewal. Income produced by investment in any such leasehold shall be applied by such insurance company in a manner calculated to amortize the amount invested for acquisition and improvement thereof within a period not exceeding 8/10 of such unexpired term of the leasehold following such acquisition or improvement, or within a period of 40 years thereafter, whichever is less.
c. Invest in bonds or notes secured by mortgages or trust deeds on unencumbered fee simple or leasehold real estate, which shall include areas above the surface of the ground but not contiguous thereto, or any interest therein, located within the United States, any territory or insular possession thereof, the Commonwealth of Puerto Rico, or Canada, worth at least 1/3 more than the sum so invested. No loan may be made on leasehold real estate unless the terms of such loan provide for amortization payments to be made by the borrower on the principal thereof in amounts sufficient to completely amortize the loan within a period not exceeding 9/10 of the term of the leasehold, inclusive of the term or terms which may be provided by any enforceable option or options of extension or of renewal, which is unexpired at the time the loan is made. For the purpose of this subsection c., fee simple or leasehold real estate or any interest therein shall not be deemed to be encumbered within the meaning of this subsection c. by reason of the existence of taxes or assessments that are not delinquent, easements, profits or licenses, nor by reason of building restrictions or other restrictive covenants, nor when such real estate or interest therein is subject to lease in whole or in part whereby rents or profits are reserved to the owner; provided, that the security created by the mortgage or trust deed on such real estate or interest therein securing such bond or note is a first lien upon such real estate or interest therein. No insurance company shall, pursuant to this subsection c., invest in or loan upon the security of any one property more than $30,000.00 or more than 2% of its total admitted assets, whichever is the greater. The total investments of any insurance company made pursuant to this subsection c. shall not exceed 40% of its total admitted assets.
d. Invest in bonds or notes evidencing loans to veterans if the full amount of any such loan is guaranteed by the government of the United States or by the Administrator of Veterans@ Affairs pursuant to the Servicemen@s Readjustment Act of 1944, as heretofore or hereafter amended; and in the case of loans so guaranteed for less than the full amount thereof, the maximum amount which may be loaned or invested by any such insurance company pursuant to the provisions of any law of this State shall be increased by the amount so guaranteed.
e. Lend on or purchase mortgage or collateral trust bonds of railroad companies organized under the laws of said states, or the District of Columbia, or the Commonwealth of Puerto Rico, or Canada or any province thereof, or operated wholly or partly therein; or equipment trust certificates or obligations which are adequately secured or other adequately secured instruments evidencing an interest in transportation or municipal sanitation equipment wholly or in part within the United States or any territory or insular possession thereof, the Commonwealth of Puerto Rico or Canada and a right to receive determined portions of rental, purchase or other fixed obligatory payments for the use or purchase of such equipment; or certificates of receivers of any corporation where such purchase is necessary to protect an investment in the securities of such corporation theretofore made under authority of chapters 17 to 33 of this Title; or the bonds or other evidences of indebtedness of public utility companies organized under the laws of Canada or any province thereof; or the capital stock, bonds, securities or evidences of indebtedness created by any corporation of the United States or of any state, or of the District of Columbia, or of the Commonwealth of Puerto Rico or of Canada or of any province thereof; provided, that no purchase of any bond or evidence of indebtedness which is in default as to interest shall be made by such company unless such purchase is necessary to protect an investment theretofore made under authority of said chapters 17 to 33 in the securities of the corporation which issued, assumed or guaranteed such bond or evidence of indebtedness in default; provided further, that no purchase of the stock of any company of a class on which dividends have not been paid during each of the past 5 years preceding the time of purchase shall be made unless the stock so purchased shall represent a majority in control of all the stock then outstanding; and provided further, that in the case of the stock of a corporation resulting from or formed by merger or consolidation less than 5 years prior to such purchase, each consecutive year next preceding the effective date of such merger or consolidation during which dividends shall have been paid by any one or more of its constituent corporations on any or all classes of its or their stock in an aggregate amount sufficient to have paid dividends on that class of stock of the existing corporation whose stock is to be purchased, had such corporation then been in existence, shall be deemed a year during which dividends have been paid on such class of stock; provided, however, that nothing herein contained shall prohibit the purchase of stock of any class which is preferred, as to dividends, over any class the purchase of which is not prohibited by this section; and provided further, that no purchase of its own stock shall be made by any insurance company except for the purpose of the retirement of such stock or except as specifically permitted by any law of this State applicable by its terms only to insurance companies.
f. Invest in bonds or notes evidencing loans if the full amount of any such loan is insured by the government of the United States, or by the Administrator of the Farmers@ Home Administration pursuant to the Bankhead-Jones Farm Tenant Act of 1937 as heretofore or hereafter amended.
g. Make loans or investments not qualifying or permitted under the preceding subsections of this section to an amount, not including the amount of investments otherwise expressly authorized by law, not exceeding in the aggregate at any one time 5% of the total admitted assets of such insurance company as of December 31 next preceding.
Amended by L.1938, c. 359, p. 897, s. 1; L.1938, c. 368, p. 935, s. 1; L.1945, c. 226, p. 737, s. 2; L.1946, c. 116, p. 544, s. 1; L.1947, c. 358, p. 1162, s. 1; L.1950, c. 283, p. 946, s. 2; L.1952, c. 136, p. 483, s. 1; L.1953, c. 17, p. 242, s. 115; L.1955, c. 185, p. 744, s. 1; L.1962, c. 163, s. 1; L.1983, c. 81, s. 1, eff. March 2, 1983.
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