Every insurer shall have and maintain investments, of the classes described in this section, to the extent of policyholder obligations and minimum capital, or guaranty fund, and surplus less, with respect to insurers other than life insurers, an amount equal to thirty percent of its surplus as regards policyholders. In no event may insurers, other than life insurers, have and maintain investments of the character described below less than an amount equal to seventy percent of policyholder obligations and one hundred percent of the minimum required capital, or guaranty fund, and surplus:

1. (a) Cash, cash funds, and interest accrued thereon on deposit or in savings accounts, under certificates of deposit, or in any other form, in solvent banks and trust companies which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation, but the cash or cash funds are not limited to, or by, the amount of insurance protection.
2. (b) Premiums in the course of collection, including due and deferred premiums of life insurers, other than from agencies or general agencies effectively owned or controlled by, or owning or controlling, the insurer, not more than three months past due, less commissions payable, and installment premiums to the extent of the unearned premium reserve carried on the policies to which the premiums apply, less commissions payable thereon. However, premium balances not more than ninety days past due from agencies or general agencies effectively owned or controlled by, or owning or controlling, the insurer are considered admitted assets of the insurer to the extent that balances due from the agency or general agency are represented by assets of the kinds described in this section as limited by Section 38-11-50.
3. (c) Reinsurance recoverables, not more than three months past due from solvent, authorized reinsurers, including deposits made with assuming reinsurers, or held by ceding insurers, under reinsurance agreements, but only to the extent that the deposits are available as offsets against liabilities assumed under the reinsurance agreements.
4. (d) Bonds, notes, warrants, and other securities which are the direct obligations of the United States or for which the faith and credit of the United States are pledged for the payment of principal and interest.

5. (e) Obligations or stock, where stated, of the following agencies or instrumentalities of the United States, whether or not such obligations are guaranteed by the government:

   1. (1) Commodity Credit Corporation.
   2. (2) Federal intermediate credit banks.
   3. (3) Federal land banks.
   4. (4) Central Bank for Cooperatives.
   5. (5) Federal home loan banks and their stock.
   6. (6) Federal National Mortgage Association and its stock when acquired in connection with sale of mortgage loans to the Federal National Mortgage Association.
   7. (7) Government National Mortgage Association.
   8. (8) Other agencies or instrumentalities of the United States approved by the director or his designee.
6. (f) Bonds, notes, warrants, and other securities which are the direct obligations of any state or territory of the United States or of the District of Columbia, or for which the full faith and credit of the state, territory, or District of Columbia have been pledged for the payment of principal and interest.
7. (g) Bonds, notes, warrants, and other securities which are valid and legally authorized obligations, issued, assumed, or guaranteed by any county, city, town, village, municipality, or district of any state or territory of the United States, or by any political subdivision thereof, or by any civil division or public instrumentality of the United States, any state or territory of the United States, or any county, city, town, or district of any state or territory, if, by statutory or other legal requirements applicable thereto, such obligations are payable, both as to principal and interest, from taxes levied, or required by such law to be levied, upon all taxable property or taxable income within the jurisdiction of the governmental unit, or from special revenues pledged or otherwise appropriated or by law required to be appropriated for the purpose of the payment, but not including any obligations payable solely out of special assessments on properties benefitted by local improvements. However, obligations payable out of special revenues pledged or otherwise appropriated or required by law to be appropriated for the purpose of the payment, are eligible for purposes of this section only if the obligations are eligible for amortization in accordance with regulations promulgated by the director after notice and hearing.
8. (h) Bonds, notes, warrants, or other securities of Canada, or of any of its provinces, or of any municipality in Canada, if the municipal obligations are required or permitted to be amortized in the annual statement prescribed by law, or any bonds fully guaranteed by Canada, or any of its provinces or municipalities, if the bonds are payable in lawful money of the United States or Canada.

9. (i) Bonds, notes, or debentures of solvent corporations existing under the laws of the United States or any of its states or territories, the District of Columbia, Canada, or any of its provinces, if the obligations are qualified under any of the following:

   1. (1) Obligations which are secured by adequate collateral security and bear fixed interest if, during each of the last two, and one additional year, of the five fiscal years next preceding the date of acquisition by the insurer, the net earnings of the issuing, assuming, or guaranteeing corporation available for its fixed charges have not been less than one and one-fourth times the total of its fixed charges for that year. In determining the adequacy of collateral security not more than one-third of the total value of the required collateral may consist of stock other than preferred or guaranteed stocks. The director or his designee may approve the collateral as adequate notwithstanding that more than one third of the total value of the required collateral consists of stocks other than preferred or guaranteed stocks if he finds the collateral to be adequate otherwise and states, in writing, his reasons for so finding.
   2. (2) Fixed interest-bearing obligations other than those described in (1) above, if the net earnings of the issuing, assuming, or guaranteeing corporation available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer have averaged per year not less than one and one-half times its annual fixed charges applicable to that period and during the last two years of the period the net earnings have been not less than one and one-half times its fixed charges for those years. Notwithstanding the failure of an issuing corporation to meet the test with respect to its fixed interest-bearing obligations as provided in this item, the obligations must be considered to be eligible hereunder if they are secured or guaranteed by leases or other contracts as long as the guaranteeing, leasing, or contracting corporation fulfills the requirements of this section with respect to its fixed interest obligations.
   3. (3) Adjustment income or other contingent interest obligations if the net earnings of the issuing, assuming, or guaranteeing corporation available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer have averaged per year not less than one and one-half times the sum of its average annual fixed charges and its average annual maximum contingent interest applicable to that period and if during each of the last two years of the period the net earnings have been not less than one and one-half times the sum of its fixed charges and maximum contingent interest for those years. As used herein, "net earnings available for fixed charges" means net income after deducting operating and maintenance expenses, taxes other than federal and state income taxes, depreciation, and depletion, but excluding extraordinary nonrecurring items of income or expenses appearing in the regular financial statement of the corporation. "Fixed charges" includes interest on funded and unfunded debt and amortization of debt discount.

10. (j) Preferred or guaranteed stocks or shares, other than common stocks, of solvent institutions existing under the laws of the United States or of any of its states, districts, or territories, if all of the prior obligations and prior preferred stocks, if any, of the institution at the date of acquisition by the insurer are eligible as investments under this chapter and if qualified under either of:

    1. (1) Preferred stocks or shares are considered qualified if both of these requirements are met:

       1. (i) The net earnings of the institution available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer shall have averaged per year not less than one and one-half times the sum of its average annual fixed charges, if any, its average annual maximum contingent interest, if any, and its average annual preferred dividend requirements applicable to the period; and
       2. (ii) During each of the last two years of the period the net earnings must have been not less than one and one-half times the sum of its fixed charges, contingent interest, and preferred dividend requirements. 'Preferred dividend requirements' means cumulative or noncumulative dividends whether paid or not.
    2. (2) Guaranteed stocks or shares are considered qualified if the assuming or guaranteeing institution meets the requirements of Section 38-11-40(i)(2) construed to include as a fixed charge the amount of guaranteed dividends of the issue or the rental covering the guarantee of the dividends.
11. (k) If a life insurer, loans to policyholders upon pledge of the policy as collateral security, amounts not exceeding the cash surrender values of the policies, or loans against pledge or assignment of any of its supplementary contracts or other contracts or obligations, as long as the loan is adequately secured by pledges or assignments.
12. (l) If a life insurer, bonds, or evidences of debts secured by first mortgages or deeds of trust on improved unencumbered real property or the equity of the seller of any of this property in the contract for a deed covering the entire balance due on a bona fide sale of property located in the United States or any of its states or territories or the District of Columbia; but no mortgage loan or investment in the equity of the seller in the contract for deed may exceed at the time of acquisition seventy-five percent of the fair market value of the property. Real estate is not considered to be encumbered within the meaning of this chapter by reason of the existence of taxes or assessments which are not delinquent, instruments creating or reserving mineral, oil, or timber rights, rights-of-way, joint driveways, sewer rights, rights in walls, nor by reason of building restrictions or other restrictive covenants, nor when the real estate is subject to lease in whole or in part whereby rents or profits are reserved to the owner if in any event the security for the loan or investment is a first lien upon the real estate. The value of any mineral, oil, timber, or similar right reserved may not be included in the fair market value of the property.
13. (m) If a life insurer, evidences of debt secured by first mortgages or deeds of trust upon leasehold estates running for a term not less than ten years beyond the maturity of the loan as made or as extended, in improved real property, otherwise unencumbered, if the mortgagee is entitled to be subrogated to all rights under the leasehold. No investment under this item may exceed seventy-five percent of the fair market value of the leasehold estate.
14. (n) If a life insurer, bonds or notes secured by mortgage or trust deed guaranteed or insured as to principal in whole or in part by the Administrator of Veterans' Affairs pursuant to the provisions of Title III of an Act of Congress of the United States of June 22, 1944, entitled the "Service Men's Readjustment Act of 1944", as amended, or bonds or notes secured by mortgage or trust deed guaranteed or insured by the Federal Housing Administration under the terms of an Act of Congress of the United States of June 27, 1936, entitled the 'National Housing Act', as amended.
15. (o) Land and buildings to the extent used and occupied for home office purposes together with other real estate as is required for the insurer's convenient transaction of its business at net value plus improvements less normal depreciation.
16. (p) If a life insurer, improved unencumbered real estate for the production of income or property now under lease or being constructed under a definite agreement providing for lease to solvent institutions, individuals, or governmental agencies for governmental, professional, commercial, residential, or industrial purposes other than agricultural, horticultural, ranch, mining, mineral, or oil purposes at net value plus improvements less normal depreciation; however, upon approval by the director or his designee, the real estate investment may be encumbered or need not be under lease.
17. (q) Loans secured by pledge of collateral determined by the director or his designee to be adequate and appropriate for investment of policyholder obligation funds of the insurer.
18. (r) Common stocks of any solvent corporation incorporated under the laws of the United States or any state, or Canada, or any of its provinces, if the stocks of the corporation are listed or admitted to trading on a securities exchange located in the United States, which exchange is approved or recognized by the Securities and Exchange Commission of the United States or if the stocks are listed in the Manual on Valuation of Securities issued by the Committee on Valuation of Securities of the National Association of Insurance Commissioners.
19. (s) Any investment not specifically included herein nor prohibited under Section 38-11-90, if and to the extent as, the director or his designee finds the investment appropriate for investment of policyholder obligations funds. This finding is to be based upon the standards prescribed by Section 38-11-10.