{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1411.2.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1411.2.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1411.2.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1411.2.html"}],"law_id":82699,"edition_id":1,"section_id":82699,"structure_id":13283,"section_number":"38.2-1411.2","catch_line":"Investment limits in medium grade and lower grade obligations","history":"1992, c. 588; 2000, c. 187.","full_text":"A\n\nNo domestic insurer shall acquire, directly or indirectly, any medium grade or lower grade obligations of any business entity if, after giving effect to any such acquisition, the aggregate amount of all medium grade and lower grade obligations then held by the domestic insurer would exceed twenty percent of its admitted assets, provided that:1\n\nNo more than ten percent of its admitted assets consists of lower grade obligations;2\n\nNo more than three percent of its admitted assets consists of lower grade obligations rated five or six by the Securities Valuation Office of the National Association of Insurance Commissioners; and3\n\nNo more than one percent of its admitted assets consists of lower grade obligations rated six by the Securities Valuation Office of the National Association of Insurance Commissioners.\n\t\t\t\tAttaining or exceeding the limit of any one category shall not preclude an insurer from acquiring obligations in other categories subject to the specific and multi-category limits.B\n\nNo domestic insurer may invest more than an aggregate of one percent of its admitted assets in medium grade obligations issued, guaranteed or insured by any one business entity nor may it invest more than one-half of one percent of its admitted assets in lower grade obligations issued, guaranteed or insured by any one business entity. In no event may a domestic insurer invest more than one percent of its admitted assets in any medium or lower grade obligations issued, guaranteed or insured by any one business entity.C\n\nNothing contained in this section shall prohibit a domestic insurer from acquiring any obligation which it has committed to acquire if the insurer would have been permitted to acquire that obligation pursuant to the provisions of this chapter on the date on which such insurer committed to purchase that obligation.D\n\nNotwithstanding the foregoing, a domestic insurer may acquire any obligation of a business entity in which the insurer already has one or more obligations, if the obligation is acquired in order to protect an investment previously made in the obligations of the business entity; however, all such acquired obligations shall not exceed one-half of one percent of the insured’s admitted assets.E\n\nNothing contained in this section shall prohibit a domestic insurer from acquiring any obligation as a result of a restructuring of any obligation already held.F\n\nNothing contained in this section shall require a domestic insurer to sell or otherwise dispose of any obligations legally acquired prior to July 1, 1992.G\n\nThe Board of Directors of any domestic insurer which acquires or invests, directly or indirectly, more than two percent of its admitted assets in medium grade or lower grade obligations of any individual business entity, shall adopt a written plan for the making of such investments. The plan shall contain, in addition to guidelines with respect to the quality of the issues invested in, diversification standards including, but not limited to, standards for issuer, industry, duration, liquidity and geographic location.H\n\nIf the Commission finds that economic or other conditions render any rating of any obligation by the Securities Valuation Office of the National Association of Insurance Commissioners obsolete or unreflective of a diminished creditworthiness of the business entity issuing such obligations, the Commission may assign the obligations to a lower grade based on the findings of a national rating agency recognized by the Commission.","order_by":null,"text":{"0":{"id":296278,"text":"No domestic insurer shall acquire, directly or indirectly, any medium grade or lower grade obligations of any business entity if, after giving effect to any such acquisition, the aggregate amount of all medium grade and lower grade obligations then held by the domestic insurer would exceed twenty percent of its admitted assets, provided that:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":296279,"text":"No more than ten percent of its admitted assets consists of lower grade obligations;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":296280,"text":"No more than three percent of its admitted assets consists of lower grade obligations rated five or six by the Securities Valuation Office of the National Association of Insurance Commissioners; and","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":296281,"text":"No more than one percent of its admitted assets consists of lower grade obligations rated six by the Securities Valuation Office of the National Association of Insurance Commissioners.\n\t\t\t\tAttaining or exceeding the limit of any one category shall not preclude an insurer from acquiring obligations in other categories subject to the specific and multi-category limits.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"B"},"4":{"id":296282,"text":"No domestic insurer may invest more than an aggregate of one percent of its admitted assets in medium grade obligations issued, guaranteed or insured by any one business entity nor may it invest more than one-half of one percent of its admitted assets in lower grade obligations issued, guaranteed or insured by any one business entity. In no event may a domestic insurer invest more than one percent of its admitted assets in any medium or lower grade obligations issued, guaranteed or insured by any one business entity.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A3","next_prefix":"C"},"5":{"id":296283,"text":"Nothing contained in this section shall prohibit a domestic insurer from acquiring any obligation which it has committed to acquire if the insurer would have been permitted to acquire that obligation pursuant to the provisions of this chapter on the date on which such insurer committed to purchase that obligation.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"6":{"id":296284,"text":"Notwithstanding the foregoing, a domestic insurer may acquire any obligation of a business entity in which the insurer already has one or more obligations, if the obligation is acquired in order to protect an investment previously made in the obligations of the business entity; however, all such acquired obligations shall not exceed one-half of one percent of the insured’s admitted assets.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"7":{"id":296285,"text":"Nothing contained in this section shall prohibit a domestic insurer from acquiring any obligation as a result of a restructuring of any obligation already held.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"8":{"id":296286,"text":"Nothing contained in this section shall require a domestic insurer to sell or otherwise dispose of any obligations legally acquired prior to July 1, 1992.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"9":{"id":296287,"text":"The Board of Directors of any domestic insurer which acquires or invests, directly or indirectly, more than two percent of its admitted assets in medium grade or lower grade obligations of any individual business entity, shall adopt a written plan for the making of such investments. The plan shall contain, in addition to guidelines with respect to the quality of the issues invested in, diversification standards including, but not limited to, standards for issuer, industry, duration, liquidity and geographic location.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"10":{"id":296288,"text":"If the Commission finds that economic or other conditions render any rating of any obligation by the Securities Valuation Office of the National Association of Insurance Commissioners obsolete or unreflective of a diminished creditworthiness of the business entity issuing such obligations, the Commission may assign the obligations to a lower grade based on the findings of a national rating agency recognized by the Commission.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"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":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},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1411.2\/","history_text":"

This law was first created in 1992. The record of its establishment is cataloged in chapter 588 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 1992 \u201cActs\u201d aren\u2019t available online. It has been modified 1 time. 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. That modification is as follows: in 2000, chapter 187<\/a>.<\/p>","references":[{"id":69711,"section_number":"38.2-1428","catch_line":"Derivative instruments","order_by":null,"url":"\/38.2-1428\/"}],"refers_to":false,"permalink":{"id":211943,"object_type":"law","relational_id":82699,"identifier":"38.2-1411.2","token":"38.2\/14\/1\/38.2-1411.2","url":"\/38.2-1411.2\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1411.2\/","token":"38.2\/14\/1\/38.2-1411.2","dublin_core":{"Title":"Investment limits in medium grade and lower grade obligations","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1411.2","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> No domestic insurer<\/span> shall acquire, directly or indirectly, any medium grade or lower grade obligations<\/span> of any business entity<\/span> if, after giving effect to any such acquisition, the aggregate amount of all medium grade and lower grade obligations<\/span> then held by the domestic insurer<\/span> would exceed twenty percent of its admitted assets<\/span>, provided that: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> No more than ten percent of its admitted assets<\/span> consists of lower grade obligations<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> No more than three percent of its admitted assets<\/span> consists of lower grade obligations<\/span> rated five or six by the Securities Valuation Office of the National Association of Insurance<\/span> Commissioners<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> No more than one percent of its admitted assets<\/span> consists of lower grade obligations<\/span> rated six by the Securities Valuation Office of the National Association of Insurance<\/span> Commissioners<\/span>.\n\t\t\t\tAttaining or exceeding the limit of any one category shall not preclude an insurer<\/span> from acquiring obligations in other categories subject to the specific and multi-category limits. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> No domestic insurer<\/span> may invest more than an aggregate of one percent of its admitted assets<\/span> in medium grade obligations<\/span> issued, guaranteed or insured by any one business entity<\/span> nor may it invest more than one-half of one percent of its admitted assets<\/span> in lower grade obligations<\/span> issued, guaranteed or insured by any one business entity<\/span>. In no event may a domestic insurer<\/span> invest more than one percent of its admitted assets<\/span> in any medium or lower grade obligations<\/span> issued, guaranteed or insured by any one business entity<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Nothing contained in this section shall prohibit a domestic insurer<\/span> from acquiring any obligation<\/span> which it has committed to acquire if the insurer<\/span> would have been permitted to acquire that obligation<\/span> pursuant to the provisions of this chapter on the date on which such insurer<\/span> committed to purchase that obligation<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> Notwithstanding the foregoing, a domestic insurer<\/span> may acquire any obligation<\/span> of a business entity<\/span> in which the insurer<\/span> already has one or more obligations, if the obligation<\/span> is acquired in order<\/span> to protect an investment previously made in the obligations of the business entity<\/span>; however, all such acquired obligations shall not exceed one-half of one percent of the insured’s admitted assets<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> Nothing contained in this section shall prohibit a domestic insurer<\/span> from acquiring any obligation<\/span> as a result of a restructuring of any obligation<\/span> already held. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Nothing contained in this section shall require a domestic insurer<\/span> to sell or otherwise dispose of any obligations legally acquired prior to July 1, 1992. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> The Board of Directors of any domestic insurer<\/span> which acquires or invests, directly or indirectly, more than two percent of its admitted assets<\/span> in medium grade or lower grade obligations<\/span> of any individual business entity<\/span>, shall adopt a written plan for the making of such investments. The plan shall contain, in addition to guidelines with respect to the quality of the issues<\/span> invested in, diversification standards including, but not limited to, standards for issuer, industry, duration, liquidity and geographic location. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> If the Commission<\/span> finds that economic or other conditions render any rating of any obligation<\/span> by the Securities Valuation Office of the National Association of Insurance<\/span> Commissioners<\/span> obsolete or unreflective of a diminished creditworthiness of the business entity<\/span> issuing such obligations, the Commission<\/span> may assign the obligations to a lower grade based on the findings<\/span> of a national rating agency recognized by the Commission<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nINVESTMENT LIMITS IN MEDIUM GRADE AND LOWER GRADE OBLIGATIONS (\u00a7 38.2-1411.2)\n\nA. No domestic insurer shall acquire, directly or indirectly, any medium grade\nor lower grade obligations of any business entity if, after giving effect to any\nsuch acquisition, the aggregate amount of all medium grade and lower grade\nobligations then held by the domestic insurer would exceed twenty percent of its\nadmitted assets, provided that:\n\n 1. No more than ten percent of its admitted assets consists of lower grade\n obligations;\n\n 2. No more than three percent of its admitted assets consists of lower grade\n obligations rated five or six by the Securities Valuation Office of the\n National Association of Insurance Commissioners; and\n\n 3. No more than one percent of its admitted assets consists of lower grade\n obligations rated six by the Securities Valuation Office of the National\n Association of Insurance Commissioners.\n \t\t\t\tAttaining or exceeding the limit of any one category shall not preclude an\n insurer from acquiring obligations in other categories subject to the specific\n and multi-category limits.\n\nB. No domestic insurer may invest more than an aggregate of one percent of its\nadmitted assets in medium grade obligations issued, guaranteed or insured by any\none business entity nor may it invest more than one-half of one percent of its\nadmitted assets in lower grade obligations issued, guaranteed or insured by any\none business entity. In no event may a domestic insurer invest more than one\npercent of its admitted assets in any medium or lower grade obligations issued,\nguaranteed or insured by any one business entity.\n\nC. Nothing contained in this section shall prohibit a domestic insurer from\nacquiring any obligation which it has committed to acquire if the insurer would\nhave been permitted to acquire that obligation pursuant to the provisions of\nthis chapter on the date on which such insurer committed to purchase that\nobligation.\n\nD. Notwithstanding the foregoing, a domestic insurer may acquire any obligation\nof a business entity in which the insurer already has one or more obligations,\nif the obligation is acquired in order to protect an investment previously made\nin the obligations of the business entity; however, all such acquired\nobligations shall not exceed one-half of one percent of the insured’s\nadmitted assets.\n\nE. Nothing contained in this section shall prohibit a domestic insurer from\nacquiring any obligation as a result of a restructuring of any obligation\nalready held.\n\nF. Nothing contained in this section shall require a domestic insurer to sell or\notherwise dispose of any obligations legally acquired prior to July 1, 1992.\n\nG. The Board of Directors of any domestic insurer which acquires or invests,\ndirectly or indirectly, more than two percent of its admitted assets in medium\ngrade or lower grade obligations of any individual business entity, shall adopt\na written plan for the making of such investments. The plan shall contain, in\naddition to guidelines with respect to the quality of the issues invested in,\ndiversification standards including, but not limited to, standards for issuer,\nindustry, duration, liquidity and geographic location.\n\nH. If the Commission finds that economic or other conditions render any rating\nof any obligation by the Securities Valuation Office of the National Association\nof Insurance Commissioners obsolete or unreflective of a diminished\ncreditworthiness of the business entity issuing such obligations, the Commission\nmay assign the obligations to a lower grade based on the findings of a national\nrating agency recognized by the Commission.\n\nHISTORY: 1992, c. 588; 2000, c. 187.","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}}