{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1407.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1407.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1407.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1407.html"}],"law_id":87237,"edition_id":1,"section_id":87237,"structure_id":13283,"section_number":"38.2-1407","catch_line":"Prohibited investments","history":"1983, c. 457, \u00a7 38.1-217.8; 1986, c. 562; 1992, c. 588; 2011, c. 198.","full_text":"A\n\nNo domestic insurer shall invest in or loan funds secured by:1\n\nIssued shares of its own capital stock without the Commission’s approval. This approval shall be based on an evaluation that indicates the investment does not adversely affect the insurer or its policyholders. The insurer shall not invest in or own more than 20 percent of its outstanding issued stock, except for the purpose of mutualization;2\n\nSecurities of an insolvent entity;3\n\nSecurities that, by their terms, will subject the insurer to any assessment other than for taxes or for wages; however, the term “assessment” shall not include ordinary contractual payments or the transfer of collateral or margin made under derivative instruments invested in or owned under § 38.2-1428;4\n\nInvestments that, as determined by the Commission, are designed to evade any prohibition of this title; or5\n\nAny obligation or investment prohibited by § 38.2-1411.2.B\n\nNotwithstanding the provisions of this chapter, the Commission may order a domestic insurer to limit or withdraw from certain investments, or discontinue certain investment practices, to the extent the Commission finds that such investment or investment practice endangers the solvency of the insurer or is otherwise hazardous to policyholders, creditors or the public in this Commonwealth.","order_by":null,"text":{"0":{"id":312380,"text":"No domestic insurer shall invest in or loan funds secured by:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":312381,"text":"Issued shares of its own capital stock without the Commission’s approval. This approval shall be based on an evaluation that indicates the investment does not adversely affect the insurer or its policyholders. The insurer shall not invest in or own more than 20 percent of its outstanding issued stock, except for the purpose of mutualization;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":312382,"text":"Securities of an insolvent entity;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":312383,"text":"Securities that, by their terms, will subject the insurer to any assessment other than for taxes or for wages; however, the term “assessment” shall not include ordinary contractual payments or the transfer of collateral or margin made under derivative instruments invested in or owned under § 38.2-1428;","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":312384,"text":"Investments that, as determined by the Commission, are designed to evade any prohibition of this title; or","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":312385,"text":"Any obligation or investment prohibited by § 38.2-1411.2.","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"B"},"6":{"id":312386,"text":"Notwithstanding the provisions of this chapter, the Commission may order a domestic insurer to limit or withdraw from certain investments, or discontinue certain investment practices, to the extent the Commission finds that such investment or investment practice endangers the solvency of the insurer or is otherwise hazardous to policyholders, creditors or the public in this Commonwealth.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A5"}},"ancestry":[{"id":13283,"edition_id":1,"name":"General Provisions","identifier":"1","label":"article","depth":3,"order_by":1,"parent_id":13282,"metadata":{},"date_created":"2026-06-26 03:44:34","date_modified":"2026-06-26 03:44:34","permalink":{"id":211889,"object_type":"structure","relational_id":13283,"identifier":"1","token":"38.2\/14\/1","url":"\/38.2\/14\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13282,"edition_id":1,"name":"Investments","identifier":"14","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:44:34","date_modified":"2026-06-26 03:44:34","permalink":{"id":211887,"object_type":"structure","relational_id":13282,"identifier":"14","token":"38.2\/14","url":"\/38.2\/14\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":64362,"structure_id":13283,"section_number":"38.2-1400","catch_line":"Scope and purpose of chapter","url":"\/38.2-1400\/","token":"38.2\/14\/1\/38.2-1400","metadata":false},{"id":57145,"structure_id":13283,"section_number":"38.2-1401","catch_line":"Definitions","url":"\/38.2-1401\/","token":"38.2\/14\/1\/38.2-1401","metadata":false},{"id":58035,"structure_id":13283,"section_number":"38.2-1402","catch_line":"Authority to invest; classification of investments by category","url":"\/38.2-1402\/","token":"38.2\/14\/1\/38.2-1402","metadata":false},{"id":85308,"structure_id":13283,"section_number":"38.2-1403","catch_line":"Category 2 investments limits","url":"\/38.2-1403\/","token":"38.2\/14\/1\/38.2-1403","metadata":false},{"id":71387,"structure_id":13283,"section_number":"38.2-1404","catch_line":"Classification of existing investments","url":"\/38.2-1404\/","token":"38.2\/14\/1\/38.2-1404","metadata":false},{"id":80503,"structure_id":13283,"section_number":"38.2-1405","catch_line":"Dates of determination","url":"\/38.2-1405\/","token":"38.2\/14\/1\/38.2-1405","metadata":false},{"id":72007,"structure_id":13283,"section_number":"38.2-1406","catch_line":"Investment conversions","url":"\/38.2-1406\/","token":"38.2\/14\/1\/38.2-1406","metadata":false},{"id":87237,"structure_id":13283,"section_number":"38.2-1407","catch_line":"Prohibited investments","url":"\/38.2-1407\/","token":"38.2\/14\/1\/38.2-1407","metadata":false},{"id":68250,"structure_id":13283,"section_number":"38.2-1408","catch_line":"Authorization of investments","url":"\/38.2-1408\/","token":"38.2\/14\/1\/38.2-1408","metadata":false},{"id":63266,"structure_id":13283,"section_number":"38.2-1409","catch_line":"Powers with respect to property","url":"\/38.2-1409\/","token":"38.2\/14\/1\/38.2-1409","metadata":false},{"id":54275,"structure_id":13283,"section_number":"38.2-1410","catch_line":"Items not deemed to be prior liens or encumbrances","url":"\/38.2-1410\/","token":"38.2\/14\/1\/38.2-1410","metadata":false},{"id":64344,"structure_id":13283,"section_number":"38.2-1411","catch_line":"Repealed","url":"\/38.2-1411\/","token":"38.2\/14\/1\/38.2-1411","metadata":false},{"id":60703,"structure_id":13283,"section_number":"38.2-1411.1","catch_line":"Investment limits generally","url":"\/38.2-1411.1\/","token":"38.2\/14\/1\/38.2-1411.1","metadata":false},{"id":82699,"structure_id":13283,"section_number":"38.2-1411.2","catch_line":"Investment limits in medium grade and lower grade obligations","url":"\/38.2-1411.2\/","token":"38.2\/14\/1\/38.2-1411.2","metadata":false}],"previous_section":{"id":72007,"structure_id":13283,"section_number":"38.2-1406","catch_line":"Investment conversions","url":"\/38.2-1406\/","token":"38.2\/14\/1\/38.2-1406","metadata":false},"next_section":{"id":68250,"structure_id":13283,"section_number":"38.2-1408","catch_line":"Authorization of investments","url":"\/38.2-1408\/","token":"38.2\/14\/1\/38.2-1408","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1407\/","history_text":"

This law was first created in 1983. The record of its establishment is cataloged in chapter 457 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1983 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1986, chapter 562; in 1992, chapter 588; in 2011, chapter 198<\/a>.<\/p>","references":[{"id":57145,"section_number":"38.2-1401","catch_line":"Definitions","order_by":null,"url":"\/38.2-1401\/"},{"id":58369,"section_number":"38.2-1444","catch_line":"Establishment of separate accounts for pension, retirement or profit-sharing plans; investment of funds in such accounts","order_by":null,"url":"\/38.2-1444\/"}],"refers_to":[{"id":69711,"section_number":"38.2-1428","catch_line":"Derivative instruments","order_by":null,"url":"\/38.2-1428\/"}],"permalink":{"id":211919,"object_type":"law","relational_id":87237,"identifier":"38.2-1407","token":"38.2\/14\/1\/38.2-1407","url":"\/38.2-1407\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1407\/","token":"38.2\/14\/1\/38.2-1407","dublin_core":{"Title":"Prohibited investments","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1407","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> No domestic insurer<\/span> shall invest in or loan funds secured by: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Issued shares of its own capital stock without the Commission<\/span>’s approval. This approval shall be based on an evaluation that indicates the investment does not adversely affect the insurer<\/span> or its policyholders. The insurer<\/span> shall not invest in or own more than 20 percent of its outstanding issued stock, except for the purpose of mutualization; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Securities of an insolvent entity; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Securities that, by their terms, will subject the insurer<\/span> to any assessment other than for taxes or for wages; however, the term “assessment” shall not include ordinary contractual payments or the transfer of collateral<\/span> or margin made under derivative instruments<\/span> invested in or owned under § 38.2-1428<\/a>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Investments that, as determined by the Commission<\/span>, are designed to evade any prohibition of this title; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Any obligation<\/span> or investment prohibited by § 38.2-1411.2<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Notwithstanding the provisions of this chapter, the Commission<\/span> may order<\/span> a domestic insurer<\/span> to limit or withdraw from certain investments, or discontinue certain investment practices, to the extent the Commission<\/span> finds that such investment or investment practice endangers the solvency of the insurer<\/span> or is otherwise hazardous to policyholders, creditors<\/span> or the public in this Commonwealth. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPROHIBITED INVESTMENTS (\u00a7 38.2-1407)\n\nA. No domestic insurer shall invest in or loan funds secured by:\n\n 1. Issued shares of its own capital stock without the Commission’s\n approval. This approval shall be based on an evaluation that indicates the\n investment does not adversely affect the insurer or its policyholders. The\n insurer shall not invest in or own more than 20 percent of its outstanding\n issued stock, except for the purpose of mutualization;\n\n 2. Securities of an insolvent entity;\n\n 3. Securities that, by their terms, will subject the insurer to any assessment\n other than for taxes or for wages; however, the term “assessment”\n shall not include ordinary contractual payments or the transfer of collateral\n or margin made under derivative instruments invested in or owned under §\n 38.2-1428;\n\n 4. Investments that, as determined by the Commission, are designed to evade\n any prohibition of this title; or\n\n 5. Any obligation or investment prohibited by § 38.2-1411.2.\n\nB. Notwithstanding the provisions of this chapter, the Commission may order a\ndomestic insurer to limit or withdraw from certain investments, or discontinue\ncertain investment practices, to the extent the Commission finds that such\ninvestment or investment practice endangers the solvency of the insurer or is\notherwise hazardous to policyholders, creditors or the public in this\nCommonwealth.\n\nHISTORY: 1983, c. 457, \u00a7 38.1-217.8; 1986, c. 562; 1992, c. 588; 2011, c. 198.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}