Ariz. Rev. Stat. § 20-533 – Qualification of securities or property as eligible investments

A. No security or investment, other than real and personal property acquired pursuant to section 20-556, shall be eligible for acquisition unless it is interest bearing or interest accruing or dividend or income paying, is not then in default as to principal or interest and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing on the security or investment, except as provided in subsection D of this section. Defaults in interest or income occurring subsequent to acquisition of an investment shall not affect allowance thereof as an asset.
B. No security or investment shall be eligible for purchase at a price above its market value.
C. No provision of this article shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or if acquired pursuant to a lawful and bona fide agreement of bulk reinsurance, merger or consolidation. Any investment so acquired through bulk reinsurance, merger or consolidation, which is not otherwise eligible under this article, is subject to the following conditions:
1. 1. The investment qualifies as an asset under the insurance laws of the jurisdiction of the insurer from which the investment was acquired.
2. 2. The insurer shall dispose of the investment within three years after the date of acquisition unless within the period the security has attained the necessary standard of eligibility pursuant to this article.
D. An insurer may invest any of its monies in debt securities which are not interest bearing or interest accruing if, after giving effect to the acquisition of the debt security, the aggregate cost of the securities, other than investments acquired pursuant to subsection C of this section, does not exceed ten per cent of the insurer's total assets.