                                 CODE OF VIRGINIA

PROHIBITED INVESTMENTS (§ 38.2-1407)

A. No domestic insurer shall invest in or loan funds secured by:

   1. Issued shares of its own capital stock without the Commission&#8217;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. Securities of an insolvent entity;

   3. Securities that, by their terms, will subject the insurer to any assessment
   other than for taxes or for wages; however, the term &#8220;assessment&#8221;
   shall not include ordinary contractual payments or the transfer of collateral
   or margin made under derivative instruments invested in or owned under &#xA7;
   38.2-1428;

   4. Investments that, as determined by the Commission, are designed to evade
   any prohibition of this title; or

   5. Any obligation or investment prohibited by &#xA7; 38.2-1411.2.

B. 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.

HISTORY: 1983, c. 457, § 38.1-217.8; 1986, c. 562; 1992, c. 588; 2011, c. 198.