Ch. 36

1995 LAWS OF MARYLAND

THE RESERVE INVESTMENTS OF AN INSURER MAY INCLUDE BANK AND
BANKERS' ACCEPTANCE AND OTHER BILLS OF EXCHANGE OF THE KIND AND
MATURITIES MADE ELIGIBLE BY LAW FOR PURCHASE IN THE OPEN MARKET BY
FEDERAL RESERVE BANKS.

(J) FIRST MORTGAGE LOANS OR DEEDS OF TRUST.

(1)      THIS SUBSECTION DOES NOT APPLY TO OBLIGATIONS ELIGIBLE FOR
INVESTMENT UNDER SUBSECTION (E) OF THIS SECTION.

(2)      (I) THE RESERVE INVESTMENTS OF AN INSURER MAY INCLUDE
BONDS OR EVIDENCES OF INDEBTEDNESS THAT ARE SECURED BY FIRST
MORTGAGES OR DEEDS OF TRUST ON UNENCUMBERED FEE-SIMPLE OR IMPROVED
LEASEHOLD REAL PROPERTY LOCATED IN THE UNITED STATES.

(II) FOR PURPOSES OF SUBPARAGRAPH (I) OF THIS PARAGRAPH,
REAL PROPERTY IS NOT CONSIDERED ENCUMBERED BECAUSE OF:

1.        THE EXISTENCE OF INSTRUMENTS RESERVING MINERAL,
OIL, OR TIMBER RIGHTS, RIGHTS-OF-WAY, SEWER RIGHTS, OR RIGHTS IN WALLS;

2.        LIENS FOR TAXES OR ASSESSMENTS NOT YET DUE;

3.      . BUILDING RESTRICTIONS OR OTHER RESTRICTIVE
COVENANTS; OR

4.        LEASES ON THE REAL PROPERTY UNDER WHICH RENTS
OR PROFITS ARE RESERVED TO THE OWNER IF THE SECURITY FOR THE LOAN IS A
FIRST LIEN ON THE REAL PROPERTY AND IF THERE IS NO CONDITION OR RIGHT OF
REENTRY OR FORFEITURE UNDER WHICH THE LIEN MAY BE CUT OFF,
SUBORDINATED, OR OTHERWISE DISTURBED.

(3)      AT THE TIME OF INVESTMENT BY THE INSURER, A MORTGAGE LOAN
MADE OR ACQUIRED BY AN INSURER ON ANY ONE PROPERTY MAY NOT EXCEED
80% OF THE VALUE OF THE REAL PROPERTY SECURING THE LOAN.

(4)      A MORTGAGE LOAN MAY NOT BE MADE OR ACQUIRED BY AN
INSURER UNLESS AN APPRAISAL IS MADE BY AN APPRAISER FOR THE PURPOSE OF
THE INVESTMENT.                                                                                                   

(5)      A MORTGAGE LOAN MADE OR ACQUIRED BY AN INSURER THAT IS A
PARTICIPATION OR A PART OF A SERIES OF ISSUE SECURED BY THE SAME
MORTGAGE OR DEED OF TRUST IS NOT A LAWFUL INVESTMENT UNDER THIS
SUBSECTION UNLESS:

(I)       THE ENTIRE SERIES OR ISSUE THAT IS SECURED BY THE SAME
MORTGAGE OR DEED OF TRUST IS HELD BY THE INSURER; OR

(II)     THE INSURER HOLDS A PARI PASSU PARTICIPATION INTEREST
IN THE MORTGAGE OR DEED OF TRUST AND HAS THE RIGHTS OF A FIRST
MORTGAGEE.

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