2006 Minnesota Statutes

67A.231 DEPOSIT OF FUNDS; INVESTMENT; LIMITATIONS.
The directors of any township mutual insurance company may authorize the treasurer to
invest any of its funds and accumulations in:
(a) Bonds, notes, mortgages, or other obligations guaranteed by the full faith and credit of
the United States of America and those for which the credit of the United States is pledged to
pay principal, interest or dividends, including United States agency and instrumentality bonds,
debentures, or obligations;
(b) Bonds, notes, evidence of indebtedness, or other public authority obligations guaranteed
by this state;
(c) Bonds, notes, evidence of the indebtedness or other obligations guaranteed by the full
faith and credit of any county, municipality, school district, or other duly authorized political
subdivision of this state;
(d) Bonds or other interest bearing obligations, payable from revenues, provided that the
bonds or other interest bearing obligations are at the time of purchase rated among the highest four
quality categories used by a nationally recognized rating agency for rating the quality of similar
bonds or other interest bearing obligations, and are not rated lower by any other such agency; or
obligations of a United States agency or instrumentality that have been rated in one of the two
highest categories established by the Securities Valuation Office of the National Association of
Insurance Commissioners. A company may not invest more than 20 percent of its admitted
assets in the obligations of any one corporation. This is not applicable to bonds or other interest
bearing obligations in default as to principal;
(e) Investments in the obligations stated in paragraphs (a), (b), (c), and (d), may be made
either directly or in the form of securities of, or other interests in, an investment company
registered under the Federal Investment Company Act of 1940. Investment company shares
authorized pursuant to this subdivision shall not exceed 20 percent of the company's surplus.
These obligations must be carried at the lower of cost or market on the annual statement filed with
the commissioner and adjusted to market on an annual basis;
(f) Loans upon improved and unencumbered real property in this state worth at least twice
the amount loaned thereon, not including buildings, unless insured by property insurance policies
payable to and held by the security holder;
(g) Real estate, including land, buildings and fixtures, located in this state and used primarily
as home office space for the insurance company;
(h) Demand or time deposits or savings accounts in federally insured depositories located in
any state to the extent that the deposit or investment is insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration. An additional deposit not to exceed
50 percent of the township mutual insurance company's policyholder surplus may be located in
these depositories if covered by private deposit insurance written by an insurer licensed by the
Department of Commerce;
(i) Guarantee fund certificates of a mutual insurer which reinsures the business of the
township mutual insurance company. The commissioner may by rule limit the amount of
guarantee fund certificates which the township mutual insurance company may purchase and this
limit may be a function of the size of the township mutual insurance company;
(j) Up to $1,500 in stock of an insurer which issues directors and officers liability insurance
to township mutual insurance company directors and officers;
(k) Up to $10,000 in shares of stock of the National Association of Mutual Insurance
Companies bank, subject to the commissioner's approval; and
(l) Overnight repurchase agreements with the depository that handles the company's primary
accounts under paragraph (h). The repurchase agreements must be collateralized by securities
that the company is otherwise authorized to invest in under this section. The securities must
have an aggregate market value of at least 105 percent of the total amount invested under the
repurchase agreement.
History: 1981 c 127 s 1; 1987 c 337 s 112; 1995 c 214 s 16; 1997 c 222 s 8; 1998 c 297 s
2; 1999 c 52 s 1