Terms Used In Louisiana Revised Statutes 22:601.9

  • Admitted assets: means assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner, but excluding assets of separate accounts, the investments of which are not subject to the provisions of this Subpart. See Louisiana Revised Statutes 22:601.1
  • Amortization: Paying off a loan by regular installments.
  • Appraisal: A determination of property value.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • directly: when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation. See Louisiana Revised Statutes 22:601.1
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Investment subsidiary: means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this Subpart applicable to the insurer. See Louisiana Revised Statutes 22:601.1
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Limited liability company: means a business organization, excluding partnerships and ordinary business corporations, organized or operating under the laws of the United States or any state thereof that limits the personal liability of investors to the equity investment of the investor in the business entity. See Louisiana Revised Statutes 22:601.1
  • Market value: means :

                (a) As to cash and letters of credit, the amounts thereof. See Louisiana Revised Statutes 22:601.1

  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate. See Louisiana Revised Statutes 22:601.1
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • NAIC: means the National Association of Insurance Commissioners. See Louisiana Revised Statutes 22:601.1
  • Obligation: means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, and other evidence of indebtedness for the payment of money, or participations, certificates, or other evidences of an interest in any of the foregoing, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment. See Louisiana Revised Statutes 22:601.1
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Option: means an agreement giving the buyer the right to buy or receive, known as a "call option" sell or deliver, known as a "put option" enter into, extend or terminate or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests. See Louisiana Revised Statutes 22:601.1
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Real estate: means :

                (a) Any of the following:

                (i) Immovable property. See Louisiana Revised Statutes 22:601.1

  • Secured location: means the contiguous real estate owned by one person. See Louisiana Revised Statutes 22:601.1
  • State: means a state, territory, or possession of the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. See Louisiana Revised Statutes 22:601.1
  • Trustee: A person or institution holding and administering property in trust.
  • Usury: Charging an illegally high interest rate on a loan. Source: OCC

            A. An insurer may acquire, either directly, indirectly through limited partnership interests and general partnership interests not otherwise prohibited, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments, obligations secured by mortgages on real estate, including leasehold estates in improved unencumbered immovable property having an unexpired term of not less than twenty-one years inclusive of the term which may be provided by an enforceable option of renewal, situated within the United States. A mortgage loan which is secured by other than a first lien is authorized under this Section if the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority, shall not, at the time of acquisition of the obligation, exceed:

            (1) Eighty percent of the fair market value of the real estate, if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of thirty years or less and periodic payments made no less frequently than annually. Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan shall be not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted pursuant to this Subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan.

            (a) The fair market value of the real estate shall be substantiated with an appraisal by a recognized and experienced real estate appraiser who is a member of a recognized appraisal organization, which the commissioner of insurance may accept if he is satisfied that the appraiser is competent and disinterested.

            (b) The amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans Affairs, or their successors.

            (2) As used in this Subsection, “improved unencumbered immovable property” means all farmland which has been reclaimed and is used for the purpose of husbandry, whether for tillage, pasture, or improved forestation, and all other immovable property on which permanent buildings suitable for residence or commercial use are situated, including but not limited to condominium property, as defined in La. Rev. Stat. 9:1121.101 et seq.

            B. These structures shall be insured for an amount not less than the appraised value of the structures, and the proceeds of the policy shall be payable to and held by the company or a trustee for its benefit. The insurance shall be continued in force for the duration of the loan.

            C. A mortgage loan that is held by an insurer under La. Rev. Stat. 22:601.2(D) or acquired pursuant to this Section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual or its successor publication shall continue to qualify as a mortgage loan under this Subpart.

            D. An insurer shall not acquire an investment pursuant to this Section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer pursuant to this Section would exceed five percent of its admitted assets in mortgage loans covering any one secured location.

            E. No insurer shall acquire an investment pursuant to this Section or La. Rev. Stat. 22:601.10(B) if, as a result of and after giving effect to the investment and any guarantees made by the insurer in connection with the investment, the aggregate amount of all investments then held by the insurer pursuant to this Section and La. Rev. Stat. 22:601.10(B) plus the guarantees then outstanding would exceed forty-five percent of its admitted assets.

            F. Notwithstanding any other provision of law to the contrary, a domestic insurer is entitled to the same benefits and exemptions relative to state usury laws, specifically La. Rev. Stat. 9:3500 and 3503, granted to banks and savings and loan associations pursuant to the Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.S.C. §§ 1735f–7, as amended. The rate of interest shall be fixed in writing, and testimonial proof of it shall not be admitted in any case.

            Acts 2021, No. 165, §1, eff. Jan. 1, 2022.

  Previous section
Next section  
 Subpart B-1 Contents