Ch. 678

LAWS OF MARYLAND

Annotated Code of Maryland

(1986 Replacement Volume and 1988 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 48A - Insurance Code

104.

The reserve investments of an insurer shall consist of the
following classes of assets subject to the limit, if any, set
forth with regard to each type or class of asset:

(6) (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
instruments 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 subject 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 acquired by an
insurer on any one property shall, at the time of investment by
the insurer, exceed [two thirds] 85 80 PERCENT 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 such mortgage loan made or acquired by an insurer
which is a participation or a part of a series of issue secured
by the same mortgage or deed of trust shall be a lawful
investment under this paragraph unless the entire series or issue
which is secured by the same mortgage or deed of trust is held by
such insurer or unless the insurer holds a [senior] PARI PASSU
participation INTEREST in such mortgage or deed of trust [giving
it substantially] AND HAS the rights of a first mortgagee. Except
as otherwise provided in this section, no domestic insurer shall
invest in or loan upon the security of any one property more than
twenty-five thousand dollars or more than two per centum of its
total admitted assets, whichever is the greater. In no event
shall the total investments of any such insurer in the kinds
permitted under this subdivision exceed forty per centum of its
total admitted assets.

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