Marvin Mandel, Governor                         849

of acquisition by such insurer shall have averaged per year not less
than one and one-half 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 ap-
plicable to such period; and

(B) During either of the last two years of such period such net
earnings shall have been not less than one and one-half times the
sum of its fixed charges, contingent interest and preferred dividend
requirements for such year. The term "preferred dividends re-
quirements" shall be deemed to mean cumulative or noncumulative
dividends whether paid or not.

(ii) Guaranteed stocks or shares shall be deemed qualified if
the assuming or guaranteeing institution meets the requirements
of paragraph (ii) of subsection (2) of this section construed so as
to include as a fixed charge the amounts of guaranteed dividends
of such issue or the rental covering the guarantee of such dividends.

(4)     Trustees' or receivers' obligations.—(i) Certificates, notes
or other obligations issued by trustees or receivers of any institu-
tion created or existing under the laws of the United States or of
any state, district or territory thereof, which, or the assets of which,
are being administered under the direction of any court having
jurisdiction, if such obligation is adequately secured as to principal
and interest.

(ii) Equipment trust obligations or certificates which are ade-
quately secured or other adequately secured instruments evidencing
an interest in transportation equipment wholly or in part within
the United States and a right to receive determined portions of
rental, purchase or other fixed obligatory payments for the use or
purchase of such transportation equipment.

(5)    Acceptances and bills of exchange.—Bank and bankers'
acceptances and other bills of exchange of the kind and maturities
made eligible, pursuant to law, for purchase in the open market by
federal reserve banks.

(6)    Mortgage loans.—(i) Bonds or evidences of indebtedness
other than those described in subsection (2) of this section which
are secured by first mortgages or deeds of trust upon unencumbered
fee-simple or improved leasehold real property located in the United
States. Real property shall not be deemed to be encumbered within
the meaning of this section, by reason of the existence of instru-
ments reserving mineral, oil or timber rights, rights of way, sewer
rights, rights in walls, nor by reason of any liens for taxes or
assessments not yet due, nor by reason of building restrictions
or other restrictive covenants, nor when such real property is sub-
ject to lease under which rents or profits are reserved to the owner,
if in any event the security for such loan is a first lien upon such
real property and if there is no condition or right of reentry or
forfeiture, under which such lien can be cut off, subordinated or
otherwise disturbed. No such mortgage loan or loans made or ac-
quired by an insurer on any one property shall, at the time of
investment by the insurer, exceed two thirds of the value of the
real property securing the same. No such mortgage loan or loans
shall be made or acquired by an insurer except after an appraisal
made by an appraiser for the purpose of such investment. No