Investments And Regulation

Definition of "Investments and regulation"

Curtis White & Vivid Mortgage real estate agent

Written by

Curtis White & Vivid Mortgageelite badge icon

Keller Williams Legendary

Life insurance:

  1. Bonds most state regulations permit life insurance company investments in debentures, mortgage bonds, and blue chip corporate bonds.
  2. Stocks(a) preferred stock investment is limited to 20% of the total stock of any one company, not exceeding 2% of a company's admitted assets; (b) common stock investment is limited to the lesser amount of 1% of the ADMITTED ASSETS or the policy owner's surplus.
  3. Mortgage investment is unlimited in first mortgages on residential, commercial, and industrial real estate.
  4. Real Estate investment is limited to 10% of admitted assets.
Valuation of the assets in a typical state is accomplished in the following manner: stocks or bonds in default (principal or interest) cannot be valued at greater than market value; bonds not in default valued according to their purchase price adjusted to equal par at maturity; preferred and common stocks of firms in good financial condition are valued according to purchase price; preferred and common stocks in companies not in good financial condition are valued at market price; and real estate, mortgages, and policy loans are valued at book value. Property and casualty insurance:
  1. DOMESTIC INSURERS and FOREIGN INSURERS must invest according to the minimum capitalization requirement in federal, state, or municipal bonds.
  2. Company funds in excess of minimum capitalization and reserve requirements can be invested in federal, state, or municipal bonds as well as stocks or real estate. The insurance company is limited in its investment in any one firm up to no more than 10% of its admitted assets; its real estate investment can be no more than 10% of its admitted assets.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Organization following the format of Lloyd's of London. ...

worth of each accumulation unit at the end of each valuation period for a variable annuity. This value is similar to that of the net asset value for a mutual fund. ...

Figure used in calculating a worker's primary insurance amount (PIA) to determine Social Security benefits in the following manner: calculate the number of years between the worker's ...

Report developed by or supplied by a credit agency to an insurer dealing with the financial standing and character of an insurance applicant. These factors are carefully weighted by the ...

Investment risk associated with the possibility that there is a rise in the interest rates after a fixed income security has been purchased resulting in a decline in that security's price. ...

Maximum limit of liability of an insurance company for a particular claim or kind of loss that is applicable in general to all such claims or losses. This maximum limit of liability is ...

clause found in health insurance contracts that requires the insured to pay a specified percentage of the covered health care expenses. ...

Minimum amount of coverage for which a company will write a liability insurance policy. ...

Same as term Floater: coverage for property which moves from location to location either on a scheduled or unscheduled basis. If the floater covers scheduled property, coverage is listed ...

Popular Insurance Questions