Virginia Code 38.2-1437.1: Mortgage pass-through securities.
A domestic insurer may invest in mortgage pass-through securities backed by a pool of mortgages of the kind, class and investment quality as those eligible for investment under §§ 38.2-1434 through 38.2-1437, under the following conditions:
Terms Used In Virginia Code 38.2-1437.1
- 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
- Date of investment: means the date on which funds are disbursed for an investment. See Virginia Code 38.2-1401
- High grade obligations: means obligations which (i) are rated one or two by the Securities Valuation Office of the National Association of Insurance Commissioners or (ii) if not rated by the Securities Valuation Office, are rated in an equivalent grade by a national rating agency recognized by the Commission. See Virginia Code 38.2-1401
- Insurer: means a company licensed pursuant to Chapter 10 (§ Virginia Code 38.2-1401
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
- Trustee: A person or institution holding and administering property in trust.
- 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 servicer of the pool of mortgages shall be a business entity created under the laws of the United States or any state;
2. The pool of mortgages is assigned to a business entity, other than a sole proprietorship, having a net worth of at least five million dollars, as trustee for the benefit of the holders of the securities;
3. A domestic insurer shall not invest under this section more than two percent of its admitted assets in securities backed by any single mortgage pass-through pool;
4. All mortgage pass-through securities acquired by a domestic insurer under this section shall provide for flow-through of both principal and interest payments payable on the underlying mortgage loan assets; mortgage pass-through securities promising principal-only, interest-only or residual interests-only in the underlying mortgage assets shall not be acquired; and
5. The securities on the date of investment shall be high grade obligations.
1992, c. 588; 1999, c. 483.