Preferred or guaranteed stock.
1. An insurer may invest in preferred or guaranteed stocks or shares of any solvent institution if all of the prior obligations and prior preferred stocks, if any, of the institution at the date of acquisition of the investment by the insurer are eligible as investments under this chapter and if the net earnings of the institution available for its fixed charges during either of the last 2 years have been, and during each of the last 5 years have averaged, not less than 1 1/2 times the sum of its average annual fixed charges, if any, its average annual maximum contingent interest, if any, and its average annual preferred dividend requirements. For the purposes of this section, the computation refers to the fiscal years immediately preceding the date of acquisition of the investment by the insurer, and the term “preferred dividend requirement” means cumulative or noncumulative dividends, whether paid or not.
2. No insurer may invest in any such preferred or guaranteed stocks in an amount in excess of 35 percent of the particular issue of guaranteed or preferred stock or, subject to subsection 1 of NRS 682A.050, more than an amount equal to 10 percent of the insurer’s admitted assets in any one issue.
Last modified: February 27, 2006