40-2b09. Real estate bonds, mortgages, tax lien certificates.
40-2b09
40-2b09. Real estate bonds, mortgages, tax lien certificates.Any life insurance company heretofore or hereafter organized under anylaw of this state may invest by loans or otherwise with the direction orapproval of a majority of its board of directors or authorized committeethereof, any of its funds, or any part thereof in:
(a) Bonds, notes, obligations or other evidences of indebtednesssecured by mortgages or deeds of trust which are a first lien uponunencumbered real property and appurtenances thereto within the UnitedStates of America, or any insular or territorial possession of theUnited States, or the Dominion of Canada, and upon leasehold estates inreal property wherein the term of such including any options to extendis not less than 15 years beyond the maturity of the loan asmade or extended. At the date of acquisition thetotal indebtedness secured by such lien shall not exceed 80% of themarket value of the property upon which it is alien, unless that portion of the total indebtedness in excess of 80%of market value is insured by a mortgageinsurance company authorized by the commissioner of insurance to dobusiness in this state. These limitations shall not apply to obligationsdescribed in subsections (b), (c), (d), (e) and (f). For the purpose of this section amortgage or deed of trust shall not be deemed to be other than a firstlien upon property within the meaning of this section by reason of theexistence of taxes or assessments against real property andappurtenances thereto that are not delinquent, instruments creating orreserving mineral, oil, or timber rights, rights of way, jointdriveways, sewer rights, rights in walls or by reason of buildingrestrictions or other like restrictive covenants, or when such realestate is subject to lease in whole or in part whereby rents or profitsare reserved to the owner or when there is in existence a fixedobligation or lien against the property where an escrow account orindemnification bond is or has been established or obtained sufficientto cover the maximum liability created by such obligation or lien;
(b) bonds, notes, or other evidences of indebtedness representingloans and advances of credit that have been issued, guaranteed orinsured by the United States government or any agency or instrumentalitythereof or insured by any insurance company authorized to transact suchbusiness in this state. Any uninsured ornonguaranteed portion shall not exceed 75% of thetotal amount;
(c) contracts of sale, purchase money mortgages or deeds of trustsecured by property obtained through foreclosure, or in settlement orsatisfaction of any indebtedness;
(d) bonds, notes, obligations, or other evidences of indebtednesssecured by mortgages or deeds of trust which are a first lien uponunencumbered personal or real or both personal and real property,including a leasehold of real estate, under lease, purchase contract, orlease purchase contract to any governmental body or instrumentalitywhose obligations qualify under K.S.A. 40-2b01, 40-2b02 or 40-2b03, andamendments thereto, or to a corporation whoseobligations qualify underK.S.A. 40-2b05, and amendments thereto, if there is adequaterental, after making allowance of lessors' or sellers' obligations andliabilities, if any, under the terms of the lease or contract, toretire the loan as to payments of principal and interest and such rentalsare pledged or assigned to the lender;
(e) bonds, notes or other evidences of indebtedness representingloans and advances of credit that have been issued, guaranteed orinsured, in accordance with the terms and provisions of an act of thefederal parliament of the Dominion of Canada approved March 18, 1954,cited as the national housing act, 1954, as heretofore and hereafteramended;
(f) participation in mortgage lending is specifically permitted inthis section as between Kansas domiciled life insurance companies, or,between Kansas domiciled life insurance companies and life insurancecompanies organized under the laws of another country, state, orterritory and authorized to do business in the state of Kansas, or,between Kansas domiciled life insurance companies and banks, trustcompanies or savings and loan associations located within the state ofKansas, upon unencumbered real property and appurtenances thereto. At the date of acquisition the total indebtednessassumed by such lien shall not exceed 80% of themarket value of the property upon which it is a lien, unless thatportion of the total indebtedness in excess of80% of market value is insured by a mortgage insurance companyauthorized by the commissioner of insurance to do business in thisstate;
(g) first mortgages or deeds of trust upon improved real property tobe occupied as a personal residence by an officer of the insurer, if themortgage is at an interest rate that is no less than the prevailing rateof the insurer's existing portfolio of mortgage loans.Mortgages ordeeds of trust entered into pursuant to this subsection shall be subjectto the conditions set forth in subsection (a) relating tomortgages or deeds of trust generally;
(h) tax lien certificates issued by local taxing authorities, which forreporting in the annual statement may be pooled by state and year of issue, butthe amount invested shall not exceed 10% of the admitted assets of thecompany as shown by its last annual report or a more recent quarterly financialstatement filed with the commissioner of insurance.
History: L. 1972, ch. 179, § 9; L. 1983, ch. 156, § 8;L. 1996, ch. 22, § 1; July 1.