(a) (1) Except as otherwise specified in Section 1241, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer would hold more than 3 percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or 5 percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.

(2) The 3 percent limitation in paragraph (1) shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.

Terms Used In California Insurance Code 1242

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Domestic: means organized under the laws of this State, whether or not admitted. See California Insurance Code 26
  • Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Insurance Code 19

(b) A domestic insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer’s aggregate medium and lower grade investments do not comply with the limitations of Section 1196.1.

(Added by Stats. 2008, Ch. 129, Sec. 8. Effective January 1, 2009.)

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