HERBERT R. O'CONOR, GOVERNOR. 1719

(a) Bonds, notes or other evidences of indebtedness issued
or guaranteed by the government of the country in which such
alien insurer was organized or by any province or other major
political subdivision thereof and not in default as to principal
or interest, may be recognized as reserve investments under
Sub-section (3) in an amount not exceeding the minimum
capital required of a domestic stock insurer hereafter organ-
ized to do the same kind or kinds of insurance business.

(b) Bonds, notes or other valid and legally authorized obli-
gations issued, assumed or guaranteed by the Dominion of
Canada or any province thereof which are not in default as to
principal or interest may be included in the trusteed assets of
such alien insurer in an amount not exceeding ten per cent of
the total admitted assets of the United States branch of such
insurer.

8. VALUATION OF INVESTMENTS.

(1) The investments of every stock and mutual insurance
company and Lloyds Association, other than a life insurance
company or a fraternal benefit association, authorized to do
business in this State, except securities subject to amortiza-
tion and except as otherwise provided in this Act, shall be
valued, in the discretion of the Commissioner, at their market
value, or at their appraised value, or at prices determined by
him as representing their fair market value. If the Commis-
sioner finds that in view of the character of investments of
any such insurer authorized to do business in this State it
would be prudent for such insurer to establish a special re-
serve for possible losses or fluctuations in the values of its
investments, he may require such insurer to establish such
reserve, reasonable in amount, and may require that such
reserve be maintained and reported in any statement or report
of the financial condition of such insurer. The Commissioner
may, in connection with any examination or required financial
statement of an authorized insurer, require such insurer to
furnish him a complete financial statement and audited report
of the financial condition of any corporation of which the
securities are owned wholly or partly by such insurer and
may cause an examination to be made of any subsidiary or
affiliate of such insurer.

(2) The stock of an insurance company shall be valued at
its book value as shown by its last annual statement or the
last report on examination, whichever is more recent. The
book value of a share of common stock of an insurance com-
pany shall be ascertained by dividing (a) the amount of its
capital and surplus less the value of all of its preferred stock,
if any, outstanding, by (b) the number of shares of its com-