606                               LAWS OF MARYLAND                       [CH. 173

(10)    financing of insurance premiums;

(11)    any other business activity reasonably ancillary to an in-
surance business;

(12)    OWNING a corporation or corporations engaged or organ-
ized to engage exclusively in one or more of the businesses specified
in paragraphs (1) to (11) inclusive.

(b) In addition to investments in common stock permitted under
any other section of this Article, a domestic insurer may:

(1)    Invest in common stock of one or more subsidiaries in an
amount which together with the cost at the time of acquisition or
formation of other such subsidiary investments under this para-
graph does not exceed the lesser of five (5) percent of such insurer's
assets or forty percent (40%) of such insurer's surplus as regards
policy holders, provided that after such investment the insurer's sur-
plus as regards policy holders, considering such investment as if it
more a disallowed asset, will be reasonable in relation to the insurer's
outstanding liabilities and adequate to its financial needs, and pro-
vided further, as used in this paragraph, the term "cost" shall in-
clude all money or other consideration expended and obligations as-
sumed in the acquisition or formation of a subsidiary including all
organizational expenses and contribution to capital and surplus of
such subsidiary whether or not represented by the purchase of
capital stock or issuance of other securities;

(2)    If the insurer's total liabilities, as calculated for NAIC an-
nual statement purposes are less than ten (10) percent of assets,
invest any amount in common stock of one or more subsidiaries,
provided that after such investment the insurer's assets and surplus
as regards policyholders, considering such investment as if it were
a disallowed asset, will be reasonable in relation to the insurer's out-
standing liabilities and adequate to its financial needs;

(3)    Invest any amount in common stock of a subsidiary pro-
vided that such subsidiary limits investments in the common stock
of any one corporation or in any other asset so that the amount of
any one investment when multiplied by the percentage of the in-
surer's ownership in said subsidiary, plus the insurer's direct invest-
ment in such asset does not exceed any of the investment limitations
specified in paragraph 1 of this subsection or in Sections 86 through
107 of this Article applicable to the insurer; and

(4)    With the approval of the Commissioner, invest any amount
in common stock of one or more subsidiaries, provided that after
such investment the insurer's assets and surplus as regards policy-
holders, considering such investment as if it were a disallowed asset,
will be reasonable in relation to the insurer's outstanding liabilities
and adequate