Texas Insurance Code 424.066 – Authorized Investments: Obligations Secured by Real Property Loans
(a) Subject to this section, an insurer may invest the insurer’s funds in excess of minimum capital and surplus in a bond, note, or evidence of indebtedness, or a participation in a bond, note, or evidence of indebtedness, that is secured by a valid first lien on real property or a leasehold estate in real property located in the United States or in any state, commonwealth, territory, or possession of the United States.
(b) The amount of an obligation secured by a first lien on real property or a leasehold estate in real property may exceed 90 percent of the value of the real property or leasehold estate only if:
(1) the amount does not exceed 100 percent of the value of the real property or leasehold estate and the insurer or one or more wholly owned subsidiaries of the insurer owns, in the aggregate, a 10 percent or greater equity interest in the real property or leasehold estate;
(2) the amount does not exceed 95 percent of the value of the real property and:
(A) the property contains only a dwelling designed exclusively for occupancy by not more than four families for residential purposes; and
(B) the portion of the unpaid balance of the obligation that exceeds 90 percent of the value of the real property is guaranteed or insured by a mortgage guaranty insurer authorized to engage in business in this state; or
(3) the amount exceeds 90 percent of the value of the real property only to the extent the obligation is insured or guaranteed by:
(A) this state;
(B) the United States;
(C) the Federal Housing Administration under the National Housing Act (12 U.S.C. § 1701 et seq.), as amended; or
(D) any other agency or instrumentality of the United States.
Terms Used In Texas Insurance Code 424.066
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- 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.
- Property: means real and personal property. See Texas Government Code 311.005
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- United States: includes a department, bureau, or other agency of the United States of America. See Texas Government Code 311.005
(c) The term of an obligation secured by a first lien on a leasehold estate in real property and improvements located on the property may not exceed a period equal to four-fifths of the unexpired term of the leasehold estate, and the obligation must fully amortize during that period. The term of the leasehold estate may not expire sooner than the 10th anniversary of the expiration date of the term of the obligation.
(d) An obligation secured by a first lien on a leasehold estate in real property and improvements located on the property must be payable in equal monthly, quarterly, semiannual, or annual payments of principal plus accrued interest to the date of the principal payment.
(e) An insurer’s investment in a single obligation under this section may not exceed 10 percent of the insurer’s capital and surplus. An insurer’s aggregate investments under this section may not exceed 30 percent of the insurer’s assets.