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S.B. 763
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VETOES
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(2) A life insurer may not include an amount from an investment made
under paragraph (1) of this subsection that exceeds 75% of the fair market value of
the real estate in reserve and capital stock investments under this subtitle unless the
real estate:
(i) is primarily improved by a residence; or
(ii) is farm property used for farming purposes and the loan amount
on any one farm property does not exceed $500,000.
(3) (i) Notwithstanding paragraph (1) of this subsection, but subject to
subparagraph (ii) of this paragraph, a life insurer may include an amount from an
investment made under paragraph (1) of this subsection not exceeding 95% of the fair
market value of the real estate if:
1. the real estate is improved by a dwelling primarily
intended for occupancy by not more than four families; and
2. a mortgage insurance company authorized to do business
in this State and not affiliated with the entity making the loan guarantees or insures
that part of the loan in excess of 85% of the fair market value of the real estate.
(ii) A life insurer may not place more than 3% of its admitted assets
in loans in which the amount of the loan exceeds 90% of the fair market value of the
security of the loan.
(4) A loan authorized by this subsection must provide for the
amortization of principal over a period of not more than 30 years, with payments to be
made at least annually.
(5) (i) If a loan is made on real estate improved by a building, the
improvements must be insured against loss by fire.
(ii) The fire insurance policy required by subparagraph (i) of this
paragraph shall:
1. contain the New York or Massachusetts standard
mortgage clause or its equivalent; and
2. be delivered to the mortgagee as additional security for
the loan.
(iii) A policy that insures against loss by fire and other coverages
satisfies the requirements of this subsection.
(6) The requirements of this section and any other law of the State that
require security on a loan, prescribe the nature, amount, or form of security on a loan,
or limit the interest rate on a loan do not apply if the reserve investments consist of
bonds, notes, or other evidences of indebtedness secured by mortgages or deeds of
trust that are guaranteed or insured by an instrumentality of the United States
under the National Housing Act, Servicemen's Readjustment Act of 1944, or
Bankhead-Jones Farm Tenant Act.
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- 4134 -
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