                                 CODE OF VIRGINIA

BUSINESS ENTITY OBLIGATIONS (§ 38.2-1421)

A. High grade. A domestic insurer may invest in any high grade obligations
issued, assumed or guaranteed by any solvent business entity that is not in
default as to principal or interest on the date of investment and which is
created or existing under the laws of the United States or any state.

B. Medium grade. A domestic issuer may invest in medium grade obligations
issued, assumed or guaranteed by any solvent business entity that is not in
default as to principal or interest on the date of investment and which is
created or existing under the laws of the United States or any state.

C. Lower grade. A domestic insurer may invest in lower grade obligations rated 4
by the Securities Valuation Office of the National Association of Insurance
Commissioners or, if not rated by the Securities Valuation Office, rated in an
equivalent grade by a national rating agency recognized by the Commission that
are issued, assumed or guaranteed by any solvent business entity that is not in
default as to principal or interest on the date of investment and which is
created or existing under the laws of the United States or any state.

D. As used in this section, &#8220;business entity obligations&#8221; shall not
include any mortgage pass-through securities described in &#xA7; 38.2-1437.1.

HISTORY: 1983, c. 457, § 38.1-217.24; 1986, c. 562; 1992, c. 588; 1998, c. 414.