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Texas Insurance Code - Section 424.066. Authorized Investments: Obligations Secured By Real Property Loans

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 424.066. Authorized Investments: Obligations Secured By Real Property Loans

§ 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. Section 1701 et seq.), as amended;  
or
			(D)  any other agency or instrumentality of the 
United States.             
	(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.

Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.           

Last modified: August 11, 2007