A. An insurer may invest any of its funds in bonds, notes or other evidences of indebtedness which are secured by first mortgages or deeds of trust upon improved, unencumbered real property located in the United States, or which are secured by first mortgages or deeds of trust upon leasehold estates having an expired term of not less than twenty-one (21) years, inclusive of the term which may be provided by an enforceable option of renewal, in improved, unencumbered real property located in the United States. B. Real property shall not be deemed to be encumbered within the meaning of this section by reason of the existence of instruments reserving mineral, oil or timber rights, rights-of-way, sewer rights, rights in walls, nor by reason of any liens for taxes or assessments not delinquent, nor by reason of building restrictions or other restrictive covenants, nor when such real property is subject to lease under which rents or profits are reserved to the owner, if in any event the security for such loan is a first lien upon such real property and if there is no condition or right of reentry or forfeiture under which, in the case of real property other than leaseholds, such lien can be cut off, subordinated, or otherwise disturbed or under which, in the case of leaseholds, the insurer is unable to continue the lease in force for the duration of the loan. C. 1. No such mortgage loan or loans made or acquired by an insurer on any one property shall, at the time of investment by the insurer, exceed eighty percent (80%) of the value, or if the loan is for purchase money, the lesser of eighty percent (80%) of the value or purchase price of the real property or leasehold securing the same, except that such loan or loans may equal the amount of any guaranty by the United States of America or by any agency or instrumentality of the United States of America or by any private insurance company licensed as an authorized insurer by the Insurance Department of the State of Oklahoma to write mortgage insurance. Additionally, no single mortgage loan to any individual shall exceed three percent (3%) of the company's admitted assets, with no more than thirty-five percent (35%) of the company's admitted assets invested in total aggregate amount in mortgage loans; provided, however, that an insurer may invest up to forty-five percent (45%) of the company's admitted assets invested in total aggregate amount in mortgage loans if the portfolio average loan to value is seventy- five percent (75%) or less of fair market value. The calculation of admitted assets and portfolio average loan to value is based on the insurer's annual statement as of December 31 last preceding the date of investment, or as shown by a current financial statement on file with the Commissioner. 2. Mortgage loans made or acquired by an insurer prior to December 31, 1992, shall be in compliance with the limitation provided in this subsection for total aggregate investment of admitted assets in mortgage loans by December 31, 1997. Mortgage loans made or acquired by an insurer on or after December 31, 1992, but prior to September 1, 1993, shall be in compliance with the limitations for investment of admitted assets in single mortgage loans to individuals and total aggregate investments of admitted assets in mortgage loans provided in this subsection by December 31, 1997. Insurers shall maintain accurate and adequate records reflecting the provisions of this section and submit such records with quarterly and annual statements. D. No such mortgage loan or loans shall be made or acquired by an insurer except after an appraisal made by a qualified appraiser for the purpose of such investment. No change or modification shall be made to such appraisal by any mortgage underwriter unless such person is licensed or certified as an appraiser pursuant to the Oklahoma Certified Real Estate Appraisers Act or unless such person has been provided by the person who made the appraisal written consent to make the modification. Such modification shall be disclosed to the seller and buyer and/or the seller's agent. E. No such mortgage loan or loans made or acquired by an insurer after July 1, 2006, shall be made or acquired by an insurer unless the mortgages or mortgage loans are upon improved, unencumbered real property permitted as an investment pursuant to Section 1624 of this title. F. No mortgage loan upon a leasehold shall be made or acquired pursuant to this section unless the terms thereof shall provide for amortization payments to be made by the borrower on the principal thereof at least once in each year in amounts sufficient completely to amortize the loan within a period of four-fifths (4/5) of the term of the leasehold, inclusive of the term which may be provided by an enforceable option of renewal, which is unexpired at the time the loan is made, but in no event exceeding thirty-five (35) years. G. Subject to specific limitations otherwise applicable, no more than an aggregate of thirty-five percent (35%), except as provided in paragraph 1 of subsection C of this section, of the company's admitted assets may be invested in mortgage loans pursuant to this section, purchase money mortgages pursuant to Section 1623 of this title, and real property pursuant to Section 1624 of this title. Added by Laws 1957, p. 289, § 1622, operative July 1, 1957. Amended by Laws 1965, c. 123, § 15; Laws 1974, c. 83, § 1, emerg. eff. April 19, 1974; Laws 1993, c. 79, § 6, eff. Sept. 1, 1993; Laws 1993, c. 360, § 4, eff. Sept. 1, 1993; Laws 2006, c. 264, § 49, eff. July 1, 2006; Laws 2017, c. 287, § 3, eff. Nov. 1, 2017; Laws 2021, c. 274, § 1, emerg. eff. April 27, 2021.
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