§ 1404. Types of reserve investments permitted for non-life insurers.\n(a) In addition to the investments specified in subsection (b) hereof,\nbut excluding any investment prohibited by the provisions of paragraph\none, three, four, six, eight, nine or ten of subsection (a) of section\none thousand four hundred seven of this article, the reserve investments\nof a domestic insurer authorized to make investments under the authority\nof this section shall consist of the following:\n (1) Government obligations. Obligations which are not in default as to\nprincipal or interest, which are valid and legally authorized, and which\nare issued, assumed, guaranteed or insured by:\n (A) the United States or by any agency or instrumentality thereof,\n (B) any state of the United States,\n (C) any territory or possession of the United States or any other\ngovernmental unit in the United States, or\n (D) any agency or instrumentality of any governmental unit referred to\nin subparagraphs (B) and (C) of this paragraph, provided that\nobligations to be eligible under this paragraph shall be by law\n(statutory or otherwise) payable, as to both principal and interest,\nfrom taxes levied or by law required to be levied or from adequate\nspecial revenues pledged or otherwise appropriated or by law required to\nbe provided for the purpose of such payment, but in no event shall\nobligations be eligible for investment under this paragraph if payable\nsolely out of special assessments on properties benefited by local\nimprovements.\n (2) Obligations of American institutions.\n (A) Obligations which are issued by any solvent American institution\nor which are assumed or guaranteed by any solvent American institution\n(other than an insurance company) and which are not in default as to\nprincipal or interest provided such obligations:\n (i) are adequately secured by collateral security having a market\nvalue not less than the principal amount thereof and have investment\nqualities and characteristics wherein the speculative elements are not\npredominant, or\n (ii) are rated A or higher (or the equivalent thereto) by a securities\nrating agency recognized by the superintendent, or if not so rated, are\nsimilar in structure and in all material respects to other obligations\nof the same institution which are so rated, or\n (iii) are insured by one or more authorized insurance companies (other\nthan the investing insurer or any parent, subsidiary or affiliate of\nsuch insurer) who are licensed to insure obligations in this state and,\nafter considering such insurance, are rated Aaa (or the equivalent\nthereto) by a securities rating agency recognized by the superintendent,\nor\n (iv) have been given the highest quality designation by the Securities\nValuation Office of the National Association of Insurance Commissioners.\n (B) No investment in or loan upon the obligations of any institution,\nother than an institution which issues mortgage related securities, and\nno investment in any one mortgage related security, made pursuant to the\nprovisions of this paragraph shall exceed five per centum of the\nadmitted assets of such insurer as shown by its last statement on file\nwith the superintendent.\n (3) Preferred or guaranteed shares of American institutions. (A)\nPreferred or guaranteed shares issued or guaranteed by a solvent\nAmerican institution if all of the institution's obligations are\neligible as investments under item (ii) or (iv) of subparagraph (A) of\nparagraph two of this subsection.\n (B) No investment in the preferred or guaranteed shares of any\ninstitution made pursuant to the provisions of this paragraph shall\nexceed two percent of such insurer's admitted assets as shown by its\nlast statement on file with the superintendent.\n (4) Loans secured by real property. (A) Loans secured by first or\nsecond mortgages which are liens on improved real property in the United\nStates (including leasehold estates having an unexpired te
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