Virginia Code 38.2-1422: Obligations secured by certain leases.
A. A domestic insurer may invest in obligations of any solvent company other than companies referred to in § 38.2-1419, incorporated under the laws of the United States or of any state if:
Terms Used In Virginia Code 38.2-1422
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Business entity: means a corporation, association, partnership, joint venture, trust, church, or religious body. See Virginia Code 38.2-1401
- Company: means any association, aggregate of individuals, business, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- Date of investment: means the date on which funds are disbursed for an investment. See Virginia Code 38.2-1401
- Domestic governmental entity: means the United States, any state, or any municipality or district in any such state, or any political subdivision, civil division, agency or instrumentality of one or more of the foregoing. See Virginia Code 38.2-1401
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Insurer: means a company licensed pursuant to Chapter 10 (§ Virginia Code 38.2-1401
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- 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.
- Obligation: means a bond, debenture, note or other evidence of indebtedness. See Virginia Code 38.2-1401
- Option: includes an insurance futures option. See Virginia Code 38.2-1401
- Personal property: All property that is not real property.
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
- United States: includes the 50 states, the District of Columbia the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands and the United States Virgin Islands. See Virginia Code 1-255
1. The obligations are secured by an assignment to the insurer of a lease, and the rents payable under the lease, of real or personal property or both to (i) a domestic governmental entity; (ii) Canada, or any province of Canada; or (iii) one or more companies incorporated under the laws of the United States, any state, Canada or any province of Canada;
2. The rentals assigned are sufficient to repay the indebtedness within the unexpired term of the lease, excluding any term that may be provided by an enforceable option of renewal;
3. The lessee on any lease securing an obligation under this section, or the guarantor of the lease, is an entity whose obligations would be eligible for investment by an insurer in accordance with §§ 38.2-1415, 38.2-1421 or § 38.2-1425;
4. The lessee or guarantor has not defaulted in payment of interest or principal on any of its obligations during the five fiscal years immediately preceding the date of investment; and
5. A first lien on the interest of the lessor in the unencumbered leased property is obtained as additional security for any obligation acquired pursuant to this section.
B. No domestic insurer shall invest under this section more than two percent of the insurer’s admitted assets in the obligations of any one business entity or in the obligations secured by leases to any one business entity.
1983, c. 457, § 38.1-217.25; 1986, c. 562; 1992, c. 588.