TITLE 18

Insurance Code

Insurance

CHAPTER 13. INVESTMENTS


Except as to § 1329 of this title, this chapter applies to domestic insurers only.

18 Del. C. 1953, § 1301; 56 Del. Laws, c. 380, § 1.;

(a) Insurers shall invest in or lend their funds on the security of, and shall hold as invested assets, only eligible investments as prescribed in this chapter.

(b) Any particular investment held by an insurer on November 1, 1968, which was a legal investment at the time it was made, and which the insurer was legally entitled to possess immediately prior to such date, shall be deemed to be an eligible investment.

(c) An investment qualified, in whole or in part, for acquisition or holding as an eligible investment may be qualified or requalified at the time of acquisition or at a later date, in whole or in part, under any section of this chapter, if the relevant conditions contained in the section are satisfied at the time of qualification or requalification. In order for an investment, subsequent to the time of its acquisition, to be qualified or requalified, prior written approval of the Commissioner must be obtained.

(d) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the Commissioner or as shown by a current financial statement resulting from merger of another insurer, bulk reinsurance, or change in capitalization. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on its statutory balance sheet for:

(1) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;

(2) Cash received in a dollar roll transaction; and

(3) The amount reported as borrowed money in the most recently filed financial statement, to the extent not included in paragraphs (1) and (2) of this subsection.

(e) An insurer shall not invest in:

(1) Corporate obligations under § 1308 (c)(5) of this title;

(2) Bonds, notes or other evidences of indebtedness secured by second mortgages or deeds of trust under § 1323(a) of this title;

(3) Participations under § 1323(e) of this title;

(4) Secured obligations of institutions under § 1331 of this title; or

(5) Production payments under § 1332 of this title;

Unless such insurer possesses unimpaired capital and surplus (contributed and assigned) of not less than $7,500,000 (as shown by the insurer's annual statement as of December 31 next preceding the date of acquisition), which amount shall be invested in investments permitted under this chapter other than those specified in this subsection or § 1320 (miscellaneous investments) of this title.

18 Del. C. 1953, § 1302; 56 Del. Laws, c. 380, § 1; 63 Del. Laws, c. 363, § 19; 70 Del. Laws, c. 108, §§ 1, 2; 71 Del. Laws, c. 202, §§ 1, 2.;

(a) No security or investment, other than real and personal property acquired under § 1324 (real estate) of this title, shall be eligible for acquisition, unless it is interest bearing or interest accruing or entitled to dividends or is otherwise income earning, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon. A debt security will be considered to be income earning where, although bearing no fixed or contingent interest, it is issued at a discount and contains a specific maturity date on which redemption is to be made at a stated value. Stocks will be considered income earning although dividends are currently not being paid. Nothing in this section shall prohibit an insurer from giving or receiving a participating interest in a bond, note or other evidence of indebtedness acquired by such insurer under § 1323 of this title, or the acquisition by an insurer of warrants, options or similar rights to acquire securities if:

(1) The acquisition of such securities would then be permitted by this chapter (other than § 1320 of this title); or

(2) Such warrants, options or similar rights are acquired in connection with an investment otherwise permitted by this chapter.

(b) No security or investment shall be eligible for purchase at a price above its fair value or market value.

(c) Nothing in this chapter shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or upon a debt or judgment, or under a lawful and bona fide agreement of bulk reinsurance, merger or consolidation, or if acquired by it through the exercise of warrants, options or similar rights to acquire securities received by it in accordance with this chapter. Nothing in this chapter shall prevent any insurer from entering into an agreement for the purpose of protecting the interests of the insurer in securities lawfully held by it, or for the purpose of reorganization of a corporation which issued securities so held, and from depositing such securities with a committee or depositaries appointed under such agreement, nor from accepting stock, bonds or other securities or other property which may be distributed pursuant to any such agreement, or to any plan of reorganization or arrangement; and no provision of this chapter shall prevent any insurer from acquiring or holding any property acquired in satisfaction of any debt previously contracted, or that shall be obtained by sale or foreclosure of any security held by it. Any security or property so acquired which is not otherwise an eligible investment under this chapter shall be disposed of pursuant to § 1325 of this title if real estate, or pursuant to § 1326 of this title if personal property or securities.

(d) Except as provided in § 1305(5) of this title, the limitations of this chapter shall apply to all investments described in § 77r-1 of Title 15 of the United States Code [15 U.S.C. § 77r-1].

(e) For purposes of the investment limitations of this chapter, investments made by an insurer shall include investments made by that insurer's investment subsidiary.

18 Del. C. 1953, § 1303; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 1, 2; 63 Del. Laws, c. 363, § 12; 68 Del. Laws, c. 177, § 1; 71 Del. Laws, c. 202, § 3.;

An insurer shall not make any investment or loan (other than policy loans or annuity contract loans of a life insurer) unless the same is authorized or approved by the insurer's board of directors or by a committee thereof charged with supervision of investments and loans. The insurer shall maintain a full record of each investment.

18 Del. C. 1953, § 1304; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 3.;

An insurer shall invest in or hold as admitted assets categories of investments within applicable limits as follows only:

(1) One person. — An insurer shall not at any 1 time have any combination of investments in or loans upon the security of obligations, property or securities of any 1 person (other than its lawful subsidiary) aggregating over 10% of the insurer's assets. This shall not apply as to general obligations of the United States or of any state, or of Canada or any province thereof, or include policy loans made under § 1317 of this title.

(2) Voting stock. — An insurer may invest in and hold at any time not more than 50% of the outstanding voting stock of any corporation, except as to voting rights of preferred stock during periods of defaults of dividends. This restriction shall not apply to stock of a subsidiary of the insurer acquired under § 1313 of this title, or to controlling stock of an insurer acquired under § 1312(b) of this title. The cost of such investments in any 1 corporation shall not exceed 3% of the insurer's assets. The aggregate value of all stock acquired and held under this section shall not exceed 40% of the insurer's assets.

(3) Stocks.

a. A life insurer shall not:

1. Invest in any stocks under §§ 1311 (common stocks), 1312(a) (insurance stocks), and 1314 (common trust funds; mutual funds) of this title if the cost thereof, when added to the aggregate cost of all such investments then held by such insurer, would exceed 125% of its policyholders' surplus (as defined in § 511(a)(2) of this title), or hold at any 1 time investments under such sections having an aggregate market value exceeding 250% of such policyholders' surplus; and

2. Invest in any stocks under § 1310 (preferred and guaranteed stocks) of this title if the cost thereof, when added to the aggregate cost of all such stocks then held by such insurer, would exceed 20% of its assets, or hold at any 1 time stocks under such section having an aggregate market value exceeding 40% of its assets.

b. This provision shall not apply to stock of any controlled or subsidiary corporation under §§ 1312(b) and 1313 of this title.

c. The cost of such investments in any 1 corporation shall not exceed 3% of the insurer's assets.

(4) Mortgages. — An insurer shall not at any 1 time have more than 50% of its assets invested in obligations under § 1323 of this title, exclusive of that portion of such obligations guaranteed or insured by an agency of the United States government. The investment by an insurer in any 1 property shall not exceed 3% of the insurer's assets.

(5) Certain mortgage pools. — An insurer may invest in and hold at any time up to 50% of its assets in certificates or other instruments evidencing participating interests in mortgage loans or pools thereof issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The cost of such investment in any 1 mortgage pool shall not exceed 7% of the insurer's assets.

(6) Other specific limits. — Limits as to investments in the category of real estate shall be as provided in § 1324 of this title, and other specific limits, if any, shall apply as stated in sections dealing with other respective kinds of investments. Upon a request in writing the Commissioner may permit an insurer to invest an amount up to 5% in excess of any specific investment limitation if determined by the Commissioner to be a sound and prudent investment. Notwithstanding any other limitations contained herein, no investment in a single person other than an investment deemed eligible under § 1302(b) of this title or as provided in § 1313 of this title, shall exceed 50% of policyholders' surplus without the written approval of the Commissioner.

18 Del. C. 1953, § 1305; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 4-6; 60 Del. Laws, c. 347, § 1; 61 Del. Laws, c. 150, § 1; 63 Del. Laws, c. 363, §§ 1, 13; 68 Del. Laws, c. 261, §§ 1-5; 69 Del. Laws, c. 373, § 1; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 494, § 1.;

An insurer may invest in bonds or other evidences of indebtedness, not in default as to principal or interest, which are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any state thereof, or by Canada or any of the provinces thereof, or by any county, city town, village, municipality or district therein or by any political subdivision thereof or by a public instrumentality of 1 or more of the foregoing, and in any such obligations issued, assumed or guaranteed by the federal government of Mexico, if, by statutory or other legal requirements applicable thereto, such obligations are payable, as to both principal and interest, from (1) taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of such governmental unit, or from (2) adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment; but not including any obligation payable solely out of special assessments on properties benefited by local improvements, unless adequate security is evidenced by the ratio of assessment to the value of the property or the obligation is additionally secured by an adequate guaranty fund required by law.

18 Del. C. 1953, § 1306; 56 Del. Laws, c. 380, § 1; 63 Del. Laws, c. 363, § 17.;

An insurer may invest in the obligations and/or stock where stated, issued, assumed or guaranteed by the following agencies of the government of the United States of America, or in which such government is a participant, whether or not such obligations are guaranteed by such government:

(1) Farm Loan Bank.

(2) Commodity Credit Corporation.

(3) Federal intermediate credit banks.

(4) Federal land banks.

(5) Central Bank for Cooperatives.

(6) Federal home loan banks, and stock thereof.

(7) Federal National Mortgage Association, and stock thereof.

(8) International Bank for Reconstruction and Development.

(9) Inter-American Development Bank.

(10) Asian Development Bank.

(11) African Development Bank.

(12) Any other similar agency of, or participated in by, the government of the United States of America and of similar financial quality.

18 Del. C. 1953, § 1307; 56 Del. Laws, c. 380, § 1; 58 Del. Laws, c. 158; 59 Del. Laws, c. 79, § 7; 66 Del. Laws, c. 20, § 1.;

(a) An insurer may invest any of its funds in obligations rated 1 or 2 by the SVO if they are issued, assumed or guaranteed by any solvent institution created or existing under the laws of the United States or Canada or of any state, district, province or territory thereof.

(b) An insurer may also invest any of its funds in any medium or lower grade obligations of any institution created or existing under the laws of the United States or Canada or of any state, district, province or territory thereof, provided, however, that:

(1) Without prior approval of the Commissioner, no insurer shall invest any of its funds in any medium grade or lower grade obligation of any institution if, after giving effect to any such acquisition, the aggregate amount of all medium grade and lower grade obligations then held by the insurer would exceed 20 percent of its admitted assets.

(2) Without the prior approval of the Commissioner, no insurer shall invest any of its funds in any lower grade obligation of any institution if, after giving effect to any such acquisition, the aggregate amount of all lower grade obligations then held by the insurer would exceed 10 percent of its admitted assets; provided, that no more than 3 percent of its admitted assets consists of obligations rated 5 or 6 by the Securities Valuation Office. In addition, without the Commissioner's prior approval, no insurers shall acquire any obligation rated 6 by the Securities Valuation Office and no more than 1 percent of its admitted assets may consist of obligations rated 6 by the Securities Valuation Office.

(3) Attaining the limit of any 1 category referred to in paragraph (2) of this subsection shall not preclude an insurer from investing any of its funds in obligations in other categories subject to the specific and multicategory limits. Nothing contained in this section shall prohibit an insurer from investing any of its funds in any obligation which it has committed to acquire if the insurer would have been permitted to invest any of its funds in that obligation pursuant to this section on that date on which such insurer committed to make such investment. For the purposes of determining limitations contained in this chapter, an insurer shall give appropriate recognition to any commitments to acquire investments. Notwithstanding the foregoing, an insurer may invest any of its funds in an obligation of an institution in which such insurer already has 1 or more investments, if such investment is made in order to protect an investment previously made in the obligations of such institution; provided, that such investment shall not exceed one-half of 1 percent of the insurer's admitted assets.

(c) An insurer may also invest any of its funds in obligations other than those permitted in subsections (a) or (b) of this section or those eligible for investment under § 1323 (real estate mortgages) of this title if they are issued, assumed or guaranteed by any solvent institution created or existing under the laws of the United States or Canada or of any state, district, province or territory thereof and are qualified under any of the following:

(1) Obligations which are secured by adequate collateral security and bear fixed interest, if during each of any 3, including either of the last 2, fiscal years of a period of not less than 3 nor more than 5 fiscal years next preceding the date of acquisition by such insurer, the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges, as defined in § 1309 of this title, shall have been not less than 11/4 times the total of its fixed charges for such year, or obligations which, at the date of acquisition by such insurer, are adequately secured and have investment qualities and characteristics wherein the speculative elements are not predominant. In determining the adequacy of collateral security not more than 1/3 of the total value of such required collateral shall consist of stock other than stock meeting the requirements of § 1310 (preferred or guaranteed stocks) of this title.

(2) Fixed interest-bearing obligations, other than those described in paragraph (1) of this section, or noninterest-bearing obligations issued at a discount and repayable at a stated value on a specific maturity date, if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of 5 fiscal years next preceding the date of acquisition by such insurer shall have averaged per year not less than 1 1/2 times its average annual fixed charges applicable to such period and if during either of the last 2 years of such period such net earnings shall have been not less than 1 1/2 times its fixed charges for such year.

(3) Adjustment, income or other contingent interest obligations including, without limitation, variable or adjustable rate interest obligations if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of 5 fiscal years next preceding the date of acquisition by the insurer have averaged per year not less than one and one-half times the sum of its average annual fixed charges and its average annual maximum contingent interest applicable to such period and if during either of the last 2 years of such period such net earnings have not been less than 1 1/2 times the sum of its fixed charges and maximum contingent interest for such year.

(4) Fixed interest-bearing obligations, other than those described in paragraphs (1) and (2) of this section, or noninterest-bearing obligations issued at a discount and repayable at a stated value on a specific maturity date, if (i) the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of 5 fiscal years next preceding the date of acquisition by such insurer shall have averaged per year not less than 11/4 times its average annual fixed charges applicable to such period and if during each of any 4 fiscal years of such period such net earnings shall have been not less than 11/4 times its fixed charges for such year, (ii) the net earnings of such institution available for its fixed charges during a period of not less than 7 nor more than 10 fiscal years next preceding the date of acquisition by such insurer shall have been such that for each of any 7 fiscal years of such period such net earnings shall have been not less than 11/4 times its fixed charges for such year, and (iii) the liquid assets of such institution shall have been not less than 105% of its liabilities (other than deferred income taxes, deferred investment tax credits, capital stock and surplus).

(5) Fixed interest-bearing obligations, other than those described in subdivisions (1), (2) and (4) of this section, or noninterest-bearing obligations issued at a discount and repayable at a stated value on a specific maturity date, if either: (i) The net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges during each of the 5 fiscal years next preceding the date of acquisition by such insurer shall have been not less than 125% of its fixed charges for such year, and (ii) the liquid assets of such institution as of the end of the fiscal year next preceding the date as of which determination thereof shall be made and as of the end of each of the 4 fiscal years next preceding such fiscal year shall have been not less than 95% of its liabilities (other than deferred income taxes, deferred investment tax credits, capital stock and surplus); or (i) the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of 5 fiscal years next preceding the date of acquisition by such insurer shall have averaged per year not less than 115% of its average annual fixed charges applicable to such period and during each of any 4 fiscal years of such period such net earnings shall have been not less than 115% of its fixed charges for such year and during any fiscal year of such 5-year period such net earnings shall have been not less than 105% of its fixed charges for such year, and (ii) the liquid assets of such institution as of the end of the fiscal year next preceding the date as of which determination thereof shall be made and as of the end of each of the 4 fiscal years next preceding such fiscal year shall have been not less than 105% of its liabilities (other than deferred income taxes, deferred investment tax credits, capital stock and surplus).

18 Del. C. 1953, § 1308; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 8-10; 63 Del. Laws, c. 363, §§ 2, 3; 70 Del. Laws, c. 108, § 3; 71 Del. Laws, c. 202, §§ 4-6.;

(a) Certain terms used are defined for the purposes of this chapter as follows:

(1) "Obligations" includes bonds, debentures, notes and other evidences of indebtedness (whether or not liability for payment extends beyond the security therefor) as well as participation interests in any of the foregoing.

(2) "Institution" includes corporations, joint-stock associations, investment partnerships, business joint ventures and business trusts, statutory trusts or similar entities.

(3) "Net earnings available for fixed charges" means net income after deducting operating and maintenance expenses, taxes (other than federal, state and other income taxes), depreciation and depletion, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of such institutions.

(4) "Fixed charges" includes interest on funded and unfunded debt, amortization of debt discount and rentals for leased properties, except that interest paid by a bank or trust company upon any deposit shall not be deemed a fixed charge of such institution.

(5) "Liquid assets" and "liabilities", as to the most recent fiscal year of an issuing, assuming or guaranteeing institution, shall be determined in reliance upon the latest regular financial statement of such institution prepared as of a date not more than 15 months prior to the date of acquisition of the obligations in question by an insurer and, as to any prior fiscal year of such institution, shall be determined in reliance upon the regular financial statement of such institution as of the close of the applicable fiscal year. If net earnings are determined in reliance upon consolidated earnings statements of parent and subsidiary institutions, "liquid assets" and "liabilities" shall be determined in reliance upon consolidated financial statements of parent and subsidiary institutions after treating any minority stock interest in such subsidiary institutions as a liability.

(6) "Liquid assets" means the sum of cash, receivables or portions thereof, as the case may be, payable on demand or not more than 12 years after the date as of which determination thereof shall be made for purposes of § 1308 of this title, and readily marketable securities, in each case less applicable reserves and unearned income.

(7) "Medium grade obligations" means obligations rated 3 by the Securities Valuation Office of the National Association of Insurance Commissioners.

(8) "Lower grade obligations" means obligations rated 4, 5 or 6 by the Securities Valuation Office of the National Association of Insurance Commissioners.

(9) "SVO" means the Securities Valuation Office of the NAIC or any successor office established by the NAIC."

(b) If net earnings are determined in reliance upon consolidated earnings statements of parent and subsidiary institutions, such net earnings shall be determined after provision for income taxes of subsidiaries in which the parent institution owns directly or indirectly less than 80% of all classes of voting stock, and after proper allowance for minority stock interest if any; and the required coverage of fixed charges shall be computed on a basis including fixed charges and preferred dividends of subsidiaries other than those payable by such subsidiaries to the parent corporation or to any other of such subsidiaries, except that if the minority common stock interest in the subsidiary corporation is substantial, the fixed charges and preferred dividends may be apportioned in accordance with regulations prescribed by the Commissioner.

(c) If the issuing, assuming or guaranteeing institution has not been in legal existence for the whole of the period for which earnings tests are being applied for purposes of § 1308, § 1310 or § 1311 of this title, but was formed as a consolidation or merger of 2 or more businesses of which at least 1 was in operation at the commencement of such period or such institution has acquired all or substantially all of the assets of a business or any divisional, branch or other unitary portion thereof which was in operation at the commencement of such period, the tests of eligibility under § 1308, § 1310 or § 1311 of this title, as the case may be, shall be based upon pro forma statements incorporating statements of the predecessor or constituent institutions or businesses or portions thereof.

18 Del. C. 1953, § 1309; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 11-13; 63 Del. Laws, c. 363, §§ 4-7; 70 Del. Laws, c. 108, § 4; 71 Del. Laws, c. 202, § 7; 73 Del. Laws, c. 329, § 61.;

An insurer may invest in preferred or guaranteed stocks or shares of any solvent institution existing under the laws of the United States or of Canada, or of any state or province thereof, if all of the prior obligations and prior preferred stocks, if any, of such institution at the date of acquisition of the investment by the insurer are eligible as investments under this chapter and are rated 1 or 2 by the SVO or if the net earnings of such institution available for its fixed charges during either of the last 2 years have been, and during each of the last 5 years have averaged, not less than 11/2 times the sum of its average annual fixed charges, if any, its average annual maximum contingent interest, if any, and its average annual preferred dividend requirements. For the purposes of this section such computation shall refer to the fiscal years immediately preceding the date of acquisition of the investment by the insurer, and the term "preferred dividend requirement" shall be deemed to mean cumulative or noncumulative dividends, whether paid or not.

18 Del. C. 1953, § 1310; 56 Del. Laws, c. 380, § 1; 71 Del. Laws, c. 202, § 8.;

An insurer may invest in common stocks, other than insurance stocks, of any solvent institution organized and existing under the laws of the United States or Canada, or of any state or province thereof, if during a period of 7 fiscal years next preceding the date of acquisition by such insurer the institution had aggregate net earnings available for the payment of dividends upon its common stock of no less than the aggregate sum which would have been sufficient to pay dividends of 4% per annum upon the par value (or in the case of common stocks without par value, upon the stated capital) of all of its shares of common stock outstanding during such period. As used in this section the term "common stock" includes transferable certificates of participation in business trusts and statutory trusts. An insurer may invest in or otherwise acquire and hold a limited partnership interest in any limited partnership formed pursuant to the laws of any state or the United States of America. No limited partnership interest shall be acquired under this section if the cost thereof would exceed 2% of the assets of such insurer nor if such cost, plus the book value on the date of such acquisition of all limited partnership interest then held by such insurer and acquired under this section, would exceed 10% of such assets.

18 Del. C. 1953, § 1311; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 14; 63 Del. Laws, c. 363, § 8; 73 Del. Laws, c. 329, § 62.;

(a) An insurer may invest in the stocks of other solvent insurers formed under the laws of this or another state, which stocks meet the applicable requirements of §§ 1310 (preferred or guaranteed stock) and 1311 (common stocks) of this title.

(b) With the Commissioner's advance written consent an insurer may acquire and hold the controlling interest in the outstanding voting stock of another stock insurer formed under the laws of this or another state. All stocks under this subsection shall be subject to the limitation as to amount as provided in § 1313 of this title. The Commissioner shall not give his/her consent to any such acquisition if the Commissioner finds that it would not be in the best interests of the insurers involved, or of their respective policyholders or stockholders, or that such acquisition would materially tend to lessen competition or to result in any monopoly in the insurance business.

18 Del. C. 1953, § 1312; 56 Del. Laws, c. 380, § 1; 70 Del. Laws, c. 186, § 1.;

(a) An insurer may invest in:

(1) The stock of subsidiary insurance corporations formed or acquired by it; or,

(2) in addition to the right to own stock in other corporations given insurers in § 1305(2) of this title, it may also invest in not less than a majority of the voting stock of a business corporation formed under the laws of this or another state or a foreign nation, the activities of which corporation are primarily supplementary and complementary to the convenient operation of the insurer's business or to the administration of its affairs, and corporations engaged or organized to engage in the marketing of financial, insurance or service products, the products to be subject to the approval of the Insurance Commissioner.

As used in this title, "subsidiaries" shall include, in addition to those such corporations where the insurer owns a majority of their stock, those corporations formed or acquired by an insurer where it owns less than a majority of such corporation's voting stock due to the laws of a foreign national which require the insurer to own less than a majority of the voting stock of such subsidiary insurance corporation if it is to operate in that nation.

(b) Limitations on investments in subsidiaries shall be as follows:

(1) Domestic insurers transacting insurance in any state of the United States of America and not establishing reserves and operating in accordance with § 1104 of this title.

a. All of the insurer's investments pursuant to paragraph (a)(1) of this section shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer.

b. All of the insurer's investments pursuant to paragraph (a)(2) of this section shall not at any time exceed the lesser of 10 percent of the insurer's admitted assets or 50 percent of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer. With prior approval of the Commissioner, an insurer may invest a greater amount in the securities of subsidiaries than permitted by paragraph (a)(2) of this section if after such investment the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer, will be reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs.

(2) Domestic insurers transacting insurance in foreign countries only, and not transacting insurance in any state of the United States of America and establishing reserves and operating in accordance with § 1104 of this title: All of the insurer's investments in subsidiaries shall not at any time exceed 100 percent of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer.

(c) All of the insurer's investments under this section, together with its investments in insurance stocks under § 1312(b) of this title, shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer."

18 Del. C. 1953, § 1313; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 15; 60 Del. Laws, c. 347, § 2; 66 Del. Laws, c. 179, § 1; 73 Del. Laws, c. 336, § 1; 74 Del. Laws, c. 188, § 1.;

An insurer may invest in:

(1) A bank's common trust fund as defined in § 584 of the United States Internal Revenue Code of 1954 [26 U.S.C. § 584]; and

(2) The securities of any open-end or closed-end management type investment company or investment trust registered with the Federal Securities and Exchange Commission under the Investment Company Act of 1940 [15 U.S.C. § 80a-1 et seq.] as from time to time amended, if such investment company or trust has assets of not less than $25,000,000 as at date of investment by the insurer.

18 Del. C. 1953, § 1314; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 16.;

An insurer may invest in bankers' acceptances and bills of exchange of the kinds and maturities made eligible by law for rediscount with Federal Reserve Banks, and generally accepted by banks or trust companies which are members of the Federal Reserve System.

18 Del. C. 1953, § 1315; 56 Del. Laws, c. 380, § 1.;

An insurer may invest in equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment used wholly or in part within the United States of America or Canada, which obligations or certificates carry the right to receive determined portions of rental, purchase or other fixed obligatory payments to be made for the use or purchase of such transportation equipment.

18 Del. C. 1953, § 1316; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 17.;

A life insurer may lend to its policyholder upon pledge of the policy as collateral security any sum not exceeding the cash surrender value of the policy, or may lend against pledge or assignment of any of its supplementary contracts or other contracts or obligations, so long as the loan is adequately secured by such pledge or assignment. Loans so made are eligible investments of the insurer.

18 Del. C. 1953, § 1317; 56 Del. Laws, c. 380, § 1.;

An insurer may lend and thereby invest its funds upon the pledge of securities eligible for investment under this chapter. As at date made, no such loan shall exceed in amount 100% of the market value of such collateral pledged. The amount so loaned shall be included pro rata in determining the maximum percentage of funds permitted under this chapter to be invested in the respective categories of securities so pledged.

18 Del. C. 1953, § 1318; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 18.;

An insurer may invest in share or savings accounts of savings and loan or building and loan associations, or in savings accounts of banks; and in any 1 such institution only to the extent that the investment is insured by the federal savings and loan insurance corporation or the federal deposit insurance corporation.

18 Del. C. 1953, § 1319; 56 Del. Laws, c. 380, § 1.;

(a) An insurer may make loans or investments not otherwise expressly permitted under this chapter, in an aggregate amount not over 10% of the insurer's assets, if such loan or investment fulfills the requirements of § 1303 of this title and otherwise qualifies as a sound investment. No such loan or investment shall be represented by:

(1) Any item described in § 1102 (assets not allowed) of this title, or any loan or investment otherwise expressly prohibited;

(2) Agents' balances or amounts advanced to or owing by agents, except as to policy loans, mortgage loans and collateral loans otherwise authorized under this chapter;

(3) Loans or investments expressly eligible under any other provision of this chapter;

(4) Any asset theretofore acquired or held by the insurer under any other category of loans or investments eligible under this chapter.

(b) The insurer shall keep a separate record of all loans and investments made under this section.

18 Del. C. 1953, § 1320; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 19, 20.;

(a) An insurer transacting insurance in a foreign country may invest funds required to meet its obligations in such country and in conformity with the laws thereof in the same kinds of securities and investments of or in such country as the insurer is authorized to invest in or acquire under other provisions of this chapter. Except as provided in the foregoing sentence and in subsection (b) of this section, an insurer may not invest more than 15% of its assets in securities or investments of or in foreign countries other than Canada nor invest more than an aggregate of 5% of its assets in securities or investments of or in a single foreign jurisdiction which has a sovereign debt rating of SVO 1 or 3% of its assets as to any other foreign jurisdiction. The Commissioner may promulgate regulations which permit, after thorough and appropriate review on a case-by-case basis, a life insurer domiciled in Delaware to increase its aggregate limit on foreign investments to 20%.

(b) If such an insurer is not doing business in any state of the United States of America, it may invest its funds as permitted by the laws of any jurisdiction where it does business. Negotiation and issuance of insurance on risks situated outside every such state, and changes in, communications concerning, and collection of premiums on insurance so issued shall not be deemed hereunder to be doing business in any such state.

(c) If such an insurer is not transacting insurance in the United States of America, it may establish 1 or more separate accounts and subaccounts thereto in respect to 1 or more jurisdictions outside the United States relating to insurance business conducted in such jurisdiction outside the United States. The insurer may allocate assets and make deposits thereto in respect of the whole or any part of the insurance business transacted by it in such jurisdiction for the purpose of segregating the insurer's assets for the benefit of policyholders of that jurisdiction, subject to the following:

(1) All amounts received by an insurer in respect of a class of insurance business written in that jurisdiction, after the establishment of a separate account in respect of that class or classes of business, shall be carried to and become assets of the separate account. The assets of each separate account shall be kept separate and distinct from other assets of the insurer.

(2) Subaccounts may be established within a separate account for classes of insurance business written in that jurisdiction. All amounts received by the insurer with respect to the class of insurance in a subaccount shall be carried to and become assets of such subaccount.

(3) The income, gains and losses, realized or unrealized, from assets allocated to a separate account or subaccount thereof shall be credited to or charged against such separate account or subaccount, without regard to other income, gains or losses of the insurer. To the extent that the value of the assets in such separate account or subaccount are in excess of the reserves, other contract liabilities, solvency and other requirements of the jurisdiction in which the separate account or subaccount is established, such excess may be withdrawn by the insurer.

(4) Amounts allocated to a separate account or subaccount thereof in the exercise of the power granted by this subsection shall be owned by the insurer and the insurer shall not be, nor hold itself out to be, a trustee with respect to such amounts.

(5) The assets of a separate account or subaccount shall not be available to meet any liabilities of the insurer other than policyholder liabilities, expenses, taxes and levies, directly related to such separate account or subaccounts. The assets of any separate account or subaccount equal to the reserves and other contract liabilities with respect to those accounts are excluded from the insurer's general assets and as such shall not be charged with other liabilities of the insurer which may arise out of any other business which the insurer may conduct other than the separate account or subaccount. In any dissolution or liquidation of an insurer which has established a separate account or subaccount under this subsection, the assets of the account shall be available only for meeting the policyholder liabilities of the company attributable to the business in respect of which such separate account or subaccount was established. Any assets which remain in any such account after the satisfaction of all policyholder liabilities of the account shall be made available to the appointed receiver.

(6) An insurer shall not mortgage or charge any of the assets of any separate account or subaccount thereof, except for the benefit of such separate account or subaccount.

(7) Assets of a readily determinable market value maintained in the separate account or subaccount shall be freely exchangeable in the discretion of the insurer at any time for assets of like value.

(8) Where an insurer wishes to establish a separate account in respect of a part of the insurance business of the insurer, the insurer shall apply to the Commissioner in writing for approval to establish the separate account, and shall indicate the proposed date and the part of the insurance business of the insurer in respect of which the separate account is to be established. The separate account shall take effect upon the approval of the Commissioner.

(9) A separate account or subaccount established under this subsection in respect of any part of the insurance business of an insurer shall continue to be maintained in accordance with this subsection for as long as the insurer has any outstanding obligations or liabilities in respect of that part of its business.

(10) Negotiation and issuance of insurance on risks situated outside the United States of America, and changes in, and communications concerning, and collection of premiums on insurance so issued shall not be deemed hereunder to be doing business or transacting insurance in the United States of America.

18 Del. C. 1953, § 1321; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 21; 63 Del. Laws, c. 363, § 18; 68 Del. Laws, c. 343, § 1; 71 Del. Laws, c. 202, § 9; 76 Del. Laws, c. 39, § 1.;

Repealed by 74 Del. Laws, c. 214, § 6, effective March 30, 2004.;

(a) An insurer may invest in bonds, notes or other evidences of indebtedness secured by first or second mortgages or deeds of trust representing first or second liens upon real estate, perpetual leases thereon or leasehold estates when the remaining term of such leasehold and enforceable renewals is not less than the term of such first or second lien, as the case may be, in the United States or Canada, subject to the following conditions:

(1) The amount loaned or the aggregate amount of bonds or other evidences of indebtedness issued upon the security of a mortgage or deed of trust (when added to the amount unpaid upon any prior first mortgage or deed of trust) shall not at the time of the investment exceed 75% of the fair market value of the real estate, as such value has been determined by a qualified appraiser for the purposes of the investment or at the time of issuance of the bonds or other evidences of indebtedness.

(2) In applying the limitation under (1) above, there may be excluded from the amount invested that portion of the investment which is guaranteed by the Administrator of Veterans' Affairs pursuant to the Servicemen's Readjustment Act of 1944 [38 U.S.C. § 1801 et seq.], as amended, or insured by the Federal Housing Administrator or other United States or Canadian government agency.

(3) Insurance not less comprehensive than fire and extended coverage must be carried on the improvements, if any, on the real estate, in an amount not less than 75% of the insurable value of the improvements or the unpaid balance of the investment, whichever is the lesser amount, and the policy or policies evidencing such insurance shall be endorsed to show the interest of the lender.

(4) No mortgage loan upon a leasehold shall be made or acquired by an insurer pursuant to this section unless the terms thereof shall provide for such payments of principal, whatever the period of the loan, so that at no time during the period of the loan shall the aggregate payments of principal theretofore required to be made under the terms of the loan be less than would have been necessary for a loan payable completely by the end of the lesser of a period of 4/5 of the period of the leasehold, inclusive of the period or periods which may be provided by enforceable options of renewal, which is unexpired at the time the loan is made or 40 years, through payments of interest only for 5 years and equal payments applicable first to interest and then to principal at the end of each year thereafter.

(5) The total investments of any insurer permitted under this subsection in bonds, notes or other evidences of indebtedness secured by second mortgages or deeds of trust and under subsection (e) of this section in participations evidencing participating interests in bonds, notes or other evidences of indebtedness which are so secured, shall not exceed 5% of its assets, and no such investment shall be made or acquired by an insurer if the mortgagor, without the approval of the insurer, may increase the principal amount of the indebtedness secured by the prior first mortgage except to the extent that the amount of such increase is applied in reduction of the investment held by the insurer.

(b) For the purposes of this section real estate shall not be deemed to be encumbered by reason of the existence of taxes or assessments which are not delinquent, instruments creating or reserving mineral, oil or timber rights, rights-of-way, joint driveways, sewer rights, rights in walls, or by reason of building restrictions or other restrictive covenants, or when such real estate is subject to lease in whole or in part whereby rents or profits are reserved to the owner.

(c) An insurer may invest in purchase money mortgages or like securities received by it upon the sale or exchange of real property acquired pursuant to § 1324.

(d) In addition to the foregoing and supplemental to § 1320 of this title, any such insurer may, to an aggregate amount not in excess of 5 percent of the assets of such insurer, make and hold loans upon real property, including leasehold estates therein, in any state of the United States, or in the District of Columbia or Puerto Rico, or in any province of the Dominion of Canada, notwithstanding the fact that such loans and the mortgages securing the same do not comply with the provisions of this section.

(e) A permissible investment under this section shall include a participation (meaning an instrument evidencing a participating interest in a bond, note or other evidence of indebtedness secured by first or second mortgage or deed of trust) if the entire indebtedness would qualify for investment under subsection (a) of this section and:

(1) The entire indebtedness secured by the same mortgage or deed of trust is held by such insurer; or

(2) The insurer holds a senior participation giving it substantially the rights of a first or second mortgagee and a position of priority over the other holders of participations in such indebtedness; or

(3) If each participation is of equal rank, the aggregate amount of the insurer's investment under this paragraph in all such participations does not exceed 20% of its assets.

18 Del. C. 1953, § 1324; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 22-24; 63 Del. Laws, c. 363, §§ 9-11.;

(a) A domestic insurer may invest in real estate only if used for the purposes or acquired in the manners, and within the limits, as follows:

(1) The building in which it has its principal office, the land upon which the building stands, and such other real estate as may be requisite for the insurer's convenient accommodation in the transaction of its business. The amount so invested and apportioned as to space actually so occupied or used shall not aggregate more than 10% of the insurer's assets;

(2) Real estate acquired in satisfaction of loans, mortgages, liens, judgments, decrees or debts previously owing to the insurer in the due course of its business;

(3) Real estate acquired in part payment of the consideration on the sale of other real estate owned by it, if such transaction shall have effected a net reduction in the insurer's investments in real estate;

(4) Real estate acquired by gift or devise, or through merger, consolidation or bulk reinsurance of another insurer under this title;

(5) The seller's interest in real estate subject to an agreement of purchase or sale, but the sum invested in any such interest shall not exceed two thirds of the fair value of such parcel;

(6) Additional real estate and equipment incident thereto, if necessary or convenient for the purpose of enhancing the sale or other value of real estate previously acquired or held under this section. Such real estate and equipment, together with the real estate for the enhancement of which it was acquired, shall be included, for the purpose of applicable investment limits, and shall be subject to disposal under § 1325 of this title at the same time and under the same conditions as apply to such enhanced real estate;

(7) Real estate, or any interest therein, acquired or held by purchase, lease or otherwise, acquired as an investment for production of income, or acquired to be improved or developed for such investment purposes pursuant to an existing program therefor. The insurer may hold, mortgage, improve, develop, maintain, manage, lease, sell, convey and otherwise dispose of real estate acquired by it under this provision. An insurer shall not have at any 1 time invested in real estate under this paragraph more than 15% of its assets. Real estate to be used primarily for agricultural, ranch, mining, development of oil and mineral resources, recreational, amusement, hotel, motel or club purposes shall in total not exceed 10% of an insurer's assets.

(b) All real estate owned by a domestic insurer under this section, other than as to seller's interest specified in subdivision (a)(5) of this section, shall not at any 1 time exceed 25% of the insurer's assets.

18 Del. C. 1953, § 1325; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 25, 26; 63 Del. Laws, c. 363, § 14.;

(a) Except as stated in subsection (b) of this section, or unless the insurer elects to hold the real estate as an investment under § 1324(a)(7) of this title:

(1) An insurer shall dispose of real estate acquired under § 1324(a)(1) of this title within 5 years after it has ceased to be necessary for the convenient accommodation of the insurer in the transaction of its business;

(2) An insurer shall dispose of real estate acquired under § 1324(a)(2), (3) and (4) of this title within 5 years after the date of acquisition, unless used or to be used for the insurer's accommodation under § 1324 (a)(1) of this title.

(b) The Commissioner may by order grant, from time to time, reasonable extensions of the period, as specified in any such order, within which an insurer shall dispose of any particular parcel of such real estate.

18 Del. C. 1953, § 1326; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 27.;

Any personal property or securities lawfully acquired by an insurer, which it could not otherwise have invested in or loaned its funds upon at the time of such acquisition, shall be disposed of within 5 years from date of acquisition, unless within such period the security has attained to the standard of eligibility; except, that any security or personal property acquired under any agreement of bulk reinsurance, merger or consolidation may be retained for a longer period if so provided in the plan for such reinsurance, merger or consolidation as approved by the Commissioner under Chapter 49 of this title. The Commissioner may by order grant, from time to time, reasonable extensions of the period, as specified in any such order, within which an insurer shall dispose of any such property or security.

18 Del. C. 1953, § 1327; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, §§ 28, 29.;

(a) Any real estate, personal property, or securities lawfully acquired and held by an insurer after expiration of the period for disposal thereof or any extension of such period granted by the Commissioner as provided in §§ 1325 and 1326 of this title, shall not be allowed as an asset of the insurer.

(b) The insurer shall forthwith dispose of any ineligible investment unlawfully acquired by it, and the Commissioner shall suspend or revoke the insurer's certificate of authority if the insurer fails to dispose of the investment within such reasonable time as the Commissioner may, by his/her order, specify.

18 Del. C. 1953, § 1328; 56 Del. Laws, c. 380, § 1; 70 Del. Laws, c. 186, § 1.;

(a) In addition to investments excluded pursuant to other provisions of this title, an insurer shall not invest in or lend its funds upon the security of:

(1) Issued shares of its own capital stock, except:

a. For the purpose of mutualization under § 4928 of this title; and

b. Where the insurer has first submitted a plan for such investment or loan to the commissioner and the Commissioner has not, within 20 days after such submission or within such additional reasonable period as the Commissioner may request, disapproved such plan as unfair or inequitable to the insurer's policyholders or stockholders;

(2) Securities issued by any corporation or enterprise the controlling interest of which is, or will after such acquisition by the insurer be, held directly or indirectly by the insurer or any combination of the insurer and the insurer's directors, officers, subsidiaries or controlling stockholders (other than a parent corporation), and the spouses and children of any of the foregoing individuals. Investments in controlled insurance corporations or subsidiaries under §§ 1312(b) and 1313 of this title are not subject to this provision;

(3) Any note or other evidence of indebtedness of any director, officer, employee or controlling stockholder of the insurer or of the spouse, or child of any of the foregoing individuals, except as to policy loans authorized under § 1317 of this title.

(b) No insurer shall underwrite or participate in the underwriting of an offering of securities or property of any other person.

(c) No insurer shall enter into any agreement to withhold from sale any of its securities or property, and the disposition of its assets shall at all times be within the control of the insurer.

18 Del. C. 1953, § 1329; 56 Del. Laws, c. 380, § 1.;

The investment portfolio of a foreign or alien insurer shall be as permitted by the laws of its domicile if of a quality substantially equal to that required under this chapter for similar funds of like domestic insurers.

18 Del. C. 1953, § 1330; 56 Del. Laws, c. 380, § 1.;

An insurer may invest in tangible personal property, or interests therein evidenced by trust certificates or other instruments, and a right to receive rental, charter hire, purchase or other payments for the use or purchase of such personal property adequate to return the investment and payable or guaranteed by 1 or more governmental units or instrumentalities whose obligations would qualify for investment under § 1306 of this title (public obligations) or 1 or more institutions whose obligations would qualify for investment under § 1308(a) or under § 1308(c)(2) or (4) of this title (corporate obligations). No insurer shall make an investment pursuant to this section if the aggregate amount so invested will exceed 5% of its assets or if the aggregate amount so invested as to which such rental, charter hire, purchase or other payments are payable or guaranteed by any 1 governmental unit or instrumentality other than the United States or Canada or any 1 institution will exceed 1% of such sets.

18 Del. C. 1953, § 1331; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 30; 71 Del. Laws, c. 202, § 10.;

(a) An insurer may invest in obligations which are secured by:

(1) An assignment of a right to receive rental, charter hire, purchase or other payments for the use or purchase of real or personal property adequate to return the investment and payable or guaranteed by 1 or more governmental units or instrumentalities whose obligations would qualify for investment under § 1306 of this title (public obligations) or 1 or more institutions whose obligations would qualify for investment under § 1308(a) or under § 1308(c)(2), (4) or (5) of this title (corporate obligations); and

(2) A mortgage on or secured interest in such real or personal property.

(b) No insurer shall make an investment pursuant to this section in obligations, other than those of institutions, if the aggregate amount so invested will exceed 10% of its assets or if the aggregate amount so invested as to which such rental, charter hire, purchase or other payments are payable or guaranteed by any 1 governmental unit or instrumentality or any 1 institution will exceed 5% of such assets. No insurer shall make any investment pursuant to this section in obligations of or in any affiliate (as defined in § 5002(3) of this title).

18 Del. C. 1953, § 1332; 56 Del. Laws, c. 380, § 1; 59 Del. Laws, c. 79, § 31; 63 Del. Laws, c. 363, § 15; 71 Del. Laws, c. 202, § 11.;

Production payments, or interests therein evidenced by trust certificates or other instruments, payable from oil, gas or other hydrocarbons in producing properties located in the United States or Canada or the adjacent continental shelf if an obligation secured by and payable from such production payment or interest therein would qualify for investment under § 1308(a) or under § 1308(c)(1) of this title as an obligation which is adequately secured and has investment qualities and characteristics wherein the speculative elements are not predominant. The term "production payments" shall be deemed to mean rights to oil, gas or other hydrocarbons in place or as produced which entitle the owner thereof to a specified fraction or percentage of production until a specified sum of money has been received. No insurer shall make an investment pursuant to this section if the aggregate amount so invested will exceed 15% of its assets.

63 Del. Laws, c. 363, § 16; 71 Del. Laws, c. 202, § 12.;

The Commissioner may issue such reasonable rules, regulations and orders as the Commissioner may deem necessary or desirable to effectuate the purposes of this chapter, including setting standards for the prudent use by domestic insurers of derivative instruments and other qualified financial contracts (as defined in § 5901 of this title), and setting standards (including without limitation any limits or conditions) for domestic insurers qualifying for, entering into advance agreements and reporting borrowings from any federal home loan bank, as defined in 12 U.S.C. § 1422(1)(A).

78 Del. Laws, c. 29, § 1; 79 Del. Laws, c. 207, § 1.;

An insurer may make additional loans or investments in excess of any aggregate investment limitation contained in this chapter in accordance with paragraph (1) of this section except for the aggregate limitations contained in §§ 1305(1) and 1313 of this title.

(1) An insurer may make additional loans or investments in accordance with the following:

a. A property and casualty insurer may invest an amount that is the lesser of:

1. Policyholder surplus less any surplus write-ins less 400% of the authorized control level risk-based capital; or

2. Ten percent of the insurer's cash and invested assets;

b. A life and health insurer may invest an amount that is the lesser of:

1. Policyholder surplus less surplus from separate accounts less any surplus write-ins less 450% of the authorized control level risk-based capital; or

2. Ten percent of the insurer's cash and invested assets.

No insurer shall make an investment pursuant to this section if the aggregate amount so invested will exceed 200% of the existing aggregate limitation stipulated in any section of this title.

(2) No such loan or investment shall be represented by:

a. Any item described in § 1102 (assets not allowed) of this title, or any loan or investment otherwise expressly prohibited in any section of this title;

b. Investments in derivatives.

(3) The insurer shall keep a separate record of all loans and investments made under this section.

(4) Unless otherwise specified, an investment limitation computed on the basis of an insurer's cash and invested assets shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the Commissioner or as shown by a current financial statement resulting from merger of another insurer, bulk reinsurance, or change in capitalization. For purposes of computing any limitation based upon cash and invested assets, the insurer shall deduct from the amount of its cash and invested assets the amount of the liability recorded on its statutory balance sheet for:

a. The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;

b. Cash received in a dollar roll transaction; and

c. The amount reported as borrowed money in the most recently filed financial statement, to the extent not included in paragraphs (4)a. and b. of this section.

78 Del. Laws, c. 56, § 1.;