Section 1112 - Preferred or guaranteed stocksAn insurer may invest in the preferred or guaranteed stocks or shares of any solvent institution created or existing under the laws of the United States or of Canada, or of any state, province, district or territory thereof, if all of the prior obligations and prior preferred stocks, if any, of such institution at the date of acquisition by the insurer are eligible as investments under this chapter; and if qualified under subsection 1 or subsection 2 following: [1969, c. 132, §1(NEW).]
1. Preferred stocks or shares shall be deemed qualified if both of the following requirements are met: A. The earnings of such institution available for its fixed charges for a period of 5 fiscal years next preceding the date of acquisition by the insurer shall have averaged per year 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 applicable to such period; and [1969, c. 132, §1(NEW).]B. During either of the last 2 years of such period such net earnings shall have been not less than 1 1/2 times the sum of its fixed charges, contingent interest and preferred dividend requirements for such year. The term "preferred dividend requirements" shall be deemed to mean cumulative or noncumulative dividends whether paid or not. [1969, c. 132, §1(NEW).] [1969, c. 132, §1(NEW).]
2. Guaranteed stocks or shares shall be deemed qualified if the assuming or guaranteeing institution meets the requirements of section 1109, subsection 3, (corporate obligations), construed so as to include as a fixed charge the amount of guaranteed dividends of such issue or the rental covering the guarantee of such dividends. [1969, c. 132, §1(NEW).]
1969, c. 132, § 1 (NEW) .