An insurer may buy certain U.S.-linked bonds and securities, but some purchases are capped at 10%, 45%, or 5% of admitted assets.
§601.7. Bonds A. Notwithstanding the limitations contained in R.S. 22:601.6, an insurer may acquire obligations issued, assumed, guaranteed, or insured by the following: (1) The United States. (2) A government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States. (3) Mortgage-backed securities, including collateralized mortgage obligations, backed by mortgages guaranteed by federal and federally sponsored agencies such as the Government National Mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation and loans against manufactured or mobile homes or collateralized debt obligations backed by mortgage-backed securities. Mortgage-backed securities includes prime, subprime, and Alt-A mortgages, as well as home-equity loans, home-equity lines of credit, and re-REMICs. Included are bonds issued and guaranteed by, or only guaranteed by, the respective agency, and loans guaranteed by the United States Department of Veteran Affairs or the United States Department of Agriculture's Rural Development Housing and Community Facilities Programs. (4) A state, if the instruments are general obligations of the state. (5) Student loan notes or other obligations which are guaranteed or insured as to principal by the Louisiana Student Financial Assistance Commission or any other authorized agency or instrumentality of the state of Louisiana or by any authorized agency or instrumentality of the United States government. (6) Federal farm loan bonds issued by federal land banks. (7) Federal intermediate credit banks. (8) Banks for cooperatives. (9) Listed bond funds. B. An insurer may acquire mortgage-backed securities, not backed by federal and federally sponsored agencies, originated in the United States, where the collateral consists of loans pertaining to nonmultifamily homes, including prime, subprime, and Alt-A mortgages, as well as home-equity loans, home-equity lines of credit, and re-REMICs. The acquisition of any one security shall not exceed ten percent of admitted assets, nor shall an insurer invest in aggregate more than forty-five percent of its admitted assets in securities described in this Subsection and R.S. 22:601.10(B). C. An insurer may acquire equipment trust obligations or certificates, or pass-through certificates, which are adequately secured evidencing an interest in equipment operated wholly or in part within the United States and have a right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the equipment. Obligations, certificates, or pass-through certificates described in this Subsection shall have a minimum quality rating by the NAIC's SVO of one or two. D. Any insurer may acquire asset-backed securities having a current and continuing minimum quality rating of NAIC one or two by one or more of the nationally recognized securities rating organizations or a rating by the NAIC's SVO. No domestic insurer shall invest in excess of five percent of its admitted assets in any one issue of asset-backed obligations. E. In addition to those investments eligible pursuant to Subsections A, B, C, and D of this Section, an insurer may acquire bond obligations that are not foreign investments. Acts 2021, No. 165, §1, eff. Jan. 1, 2022.