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Texas Insurance Code - Section 425.116. Authorized Investments: Preferred Stock

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§ 425.116. AUTHORIZED INVESTMENTS:  PREFERRED STOCK.  (a) 
Subject to this section, an insurance company may invest in 
preferred stock of a business entity, as defined by Section 
425.110.
	(b)  An insurance company may invest in preferred stock only 
if:             
		(1)  the stock is rated by the securities valuation 
office;  and            
		(2)  the sum of the company's aggregate investment in 
preferred stock rated 3, 4, 5, or 6 and the company's investments 
under Section 425.110(d) does not exceed the limitations specified 
by Section 425.110(d).
	(c)  An insurance company's investments in the preferred 
stock of a single business entity may not exceed 20 percent of the 
company's capital and surplus.
	(d)  The aggregate amount of an insurance company's 
investments in preferred stock as to which there is not a sinking 
fund for the redemption and retirement of the stock that meets the 
standards established by the National Association of Insurance 
Commissioners may not exceed 10 percent of the company's assets.
	(e)  The aggregate amount of an insurance company's 
investments under this section may not exceed 40 percent of the 
company's assets.

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

Last modified: August 11, 2007