Chap. 11.—An ACT to amend and re-enact section 1 of an act entitled an act
to regulate investments of domestic life insurance companies, approved March
26, 1932. . [S. B. 10]
Approved September 2, 1933 -

1. Be it enacted by the General Assembly of Virginia, That section
one of an act entitled an act to regulate investments of domestic life
insurance companies, approved March twenty-sixth, nineteen hundred
and thirty-two, be amended and re-enacted so as to read as follows: —

Section 1. No domestic mutual life insurance company shall invest
its funds or assets, nor shall any domestic stock life insurance company
invest its funds or assets exclusive of an amount equal to its surplus and
its capital in excess of the minimum required by the laws of this State,
except

(a) In stock, bonds, treasury notes and other evidences of indebted-
ness of the United States government; or |

‘(b) In stock, bonds, or other evidences of indebtedness of the
District of Columbia or of any State of the United States, or of any
county, municipality or other political subdivision thereof ; or ,

(c) In bonds of the Dominion of Canada or of any province thereof
or of any municipality thereof having a population of at least one
hundred thousand, provided said bonds are payable both as to principal
and interest in gold coin of the United States of America ot the present
standard of weight and fineness, and provided, that the total investments
under this clause (c) shall not exceed ten per centum of the investing
company’s assets; or

(d) In loans secured by mortgages (including security deeds,
vendor’s liens and deeds of trust) in fee on improved unencumbered
real estate in the District of Columbia or in any State of the United
States where the amount loaned on such real estate does not exceed
sixty per centum of the fair market value of the real estate, as de-
termined by at least two competent and impartial appraisers; or.

(e) In loans secured by mortgages (including security deeds,
vendor’s liens and deeds of trust), upon leaseholds for a term of ninety-
nine years or longer, on improved unencumbered real estate in the Dis-
trict of Columbia, or in any State of the United States where the amount
loaned on stich leasehold does not exceed fifty per centum of the fair
market value of the leasehold estate, as determined by at least two com-
petent and impartial appraisers and only where at least fifty years of
the term is unexpired; or , |

(f£) In interest bearing bonds of any solvent institution which is
incorporated under the laws of the United States, or of any State
thereof, or the Dominion of Canada or any province thereof, where such
bonds are secured by adequate security or collateral at least two-thirds
in value of which security or collateral shall be other than common
stock, and where such corporation has not during any time within five
years next preceding such investment defaulted in the payment of in-
terest on such bonds and where for the five fiscal years preceding said
investment the average net annual income of such corporation, before
interest charges but after taxes, including income taxes, and after de-
ducting proper charges for replacements, depreciation and obsolescence,
has been at least one and one-half times the average annual interest for
the same period on such issue of bonds, on prior obligations and on
obligations of equal rank, and where the total investment in any one
issue of such bonds does not exceed two per centum of the investing
company’s assets, and where such bonds, if issued by a Canadian cor-
poration, are payable both as to principal and interest in gold coin of
the United States of the present standard of weight and fineness ; 01

(g) In the bonds, debentures or notes of any solvent institution in-
corporated under the laws of the United States, or of any State thereo!
(though such bonds, debentures or notes be not secured, as provided by
clause (f) hereof) where the average of the annual earnings, applicable
to dividends, of such institution during the period of five fiscal years
next preceding such investment shall equal at least four per centum upon
the par value (or, in case of stock having no par value, then upon the
value upon which such stock was issued) of the average amount of its
capital stock outstanding during such five-year period, and where such
institution, after taxes, including income taxes, and after deducting
proper charges for replacements, depreciation and obsolescence, has
not failed in any one of the five fiscal years next preceding such in-
vestment to earn a sum, applicable to interest on its outstanding in-
debtedness, equal at least to twice the amount of interest due for that
year upon its outstanding indebtedness, and where the total investment
in any one issue of such bonds, debentures or notes does not exceed two
per centum of the investing company’s assets, nor more than ten per
centum of the total issued and outstanding bonds, debentures or notes
of such institution; or

(h) In preferred or guaranteed stocks of any solvent institution in-
corporated under the laws of the United States, or of any State thereof,
where the average of the annual earnings, applicable to dividends, of
such institutions, or, in the case of guaranteed stocks, the guaranteeing
corporation, during the period of five fiscal years next preceding such
investment, shall equal at least four per centum upon the par value (or,
in the case of stock having no par value, then upon the value upon
which such stock was issued) of the average amount of its capital stock
outstanding during such five-year period, and where such institution or
guarantee corporation has not failed in any one of the five fiscal years
next preceding such investment to earn a sum applicable to dividends on
such preferred or guaranteed stocks equal at least to three times the
amount which may be required to pay the dividends for that year upon
the outstanding preferred or guaranteed stock, and where the bonds,
debentures or notes, if any, of such institution, qualify as a lawful in-
vestment under the provisions of clause (g) hereof, and where the total
investment in any one issue of such preferred or guaranteed stock does
not exceed two per centum of the investing company’s assets, nor more
than ten per centum of the total issued and outstanding preferred or
guaranteed stock of such institution; or

(1) In loans to any policyholder upon the security of the value of his
policy, the amount of which loan does not exceed the lawful reserve
which is held thereon ; or

(j) In conformity to the laws of a foreign country in which it may
be doing business, such investments to be in the same kinds of securities
in such foreign country that such company is allowed by law to invest
in in the United States, and not to exceed in amount the investing
company’s obligations in such foreign country ; or |

(k) Bonds of the Home Owners’ Loan Corporation, a corporation
created pursuant to an act of the Congress of the United States, ap-
proved June thirteenth, nineteen hundred and thirty-three.

(1) In loans upon the pledge of any of the aforesaid securities in
an amount which does not exceed ninety per centum of the market value
thereof.

(m) Any domestic life insurance company which shall own on the
effective date of this act, any stocks, bonds, notes or other evidences
of indebtedness, or loans upon the security thereof, which are not in-
cluded in clauses (a) to (1) hereof, shall dispose of such stocks, bonds,
notes or other evidences of indebtedness or loans within five years from
such date, but nothing herein contained shall be deemed to prevent
any such company from protecting its interests where circumstances
render it necessary to accept reorganization securities, where the plan
of reorganization and the securities are approved in writing by the
Commissioner of Insurance and Banking, or other official designated to
administer the insurance laws of this State. Any securities so accepted
and which are not of the classes authorized by this act shall be dis-
posed of as soon as practicable. In no case are they to be held for a
period exceeding five years. .

(n) A domestic life insurance company may purchase and hold real
property only for the following purposes and in the following manner:

(1) Such as shall be requisite for convenient accommodation in the
transaction of its business, including such as is used and/or held for
home office purposes.

(2) Such as shall have been conveyed to it in satisfaction of debts
previously contracted in course of its dealings.

(3) Such as shall have been purchased at sales on judgments or
decrees obtained for such debts, or upon foreclosure of real estate loans
owned by it. ,

All such real property specified in subdivisions two and three of
clause (n) of section one of this act, shall be sold and disposed of within
ten years after the company shall have acquired title to the same, and all
such property specified in subdivision one of such clause (n) shall be
sold and disposed of within ten years after the same shall have ceased to
be necessary for the present or future accommodation of its business, and
it shall not hold such property for a longer period unless it shall procure
a certificate from the Commissioner of Insurance and Banking, or other
official designated to administer the insurance laws ot this State, that its
interest will suffer materially by the forced sales thereof ; in which event,
the time for the sale may be extended to such time as the said official
shall direct in such certificate, but in no event to exceed an additional
period of five years; provided that as to real property purchased prior
to the effective date of this act, the periods herein provided shall not
commence to run until that date. Nothing in clause (n) of section one
of this act shall be deemed to prohibit a domestic life insurance company
from acquiring or holding legal title to real property as security for
loans made in good faith.

2. An emergency existing, this act shall be in force from its passage.