33-2-830. Real estate mortgages. (1) An insurer may invest in bonds, notes, or other evidences of indebtedness that are secured by first mortgages or deeds of trust upon improved real property located in the United States or Canada or that are secured by first mortgages or deeds of trust upon leasehold estates having an unexpired term of not less than 21 years, inclusive of the term or terms that may be provided by enforceable options of renewal, in improved real property located in the United States or Canada. In all cases, the security for the loan must be a first lien upon the real property and there may not be any condition or right of reentry or forfeiture not insured against, under which, in the case of real property other than leaseholds, the lien may be cut off or 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. This section does not prohibit an investment by reason of the existence of any prior lien for ground rents, taxes, assessments, or other similar charges not yet delinquent. This section may not be considered to prohibit investment in mortgages or similar obligations when made under 33-2-828.
     (2) "Improved real property" means, for the purposes of this part, all farm lands used for tillage, crop, pasture, or timberlands and all real estate on which permanent improvements suitable for residential, institutional, commercial, or industrial use are situated.
     (3) (a) A mortgage loan or loans made or acquired by an insurer on any one property may not, at the time of investment by the insurer, exceed the larger of the following amounts as applicable:
     (i) 80% of the value of the real property or leasehold securing the loan or loans or, if the real property or leasehold consists of one- or two-family residential property, 90% of the value;
     (ii) the amount of any insurance or guaranty of the loan by the United States or by any agency or instrumentality of the United States; or
     (iii) the amount provided in subsection (3)(a)(i), plus the amount by which the excess of the loan over that amount is insured or guaranteed by the United States or by any agency or instrumentality of the United States.
     (b) In the case of a purchase money mortgage given to secure the purchase price of real estate sold by the insurer, the amount loaned or invested may not exceed the unpaid portion of the purchase price.
     (4) A mortgage loan or loans may not be made or acquired by an insurer except after an appraisal made by a qualified appraiser for the purpose of that investment.
     (5) A mortgage loan made or acquired by an insurer that is a participation or a part of a series or issue secured by the same mortgage or deed of trust is not a lawful investment under this section unless the entire series or issue that is secured by the same mortgage or deed of trust is held by the insurer or unless the insurer holds a senior participation in the mortgage or deed of trust, giving the insurer substantially the rights of a first mortgagee.
     (6) A mortgage loan upon a leasehold may not be made or acquired pursuant to this section unless the terms of the loan provide for amortization payments to be made by the borrower on the principal of the loan at least once in each year in amounts sufficient to completely amortize the loan within a period of four-fifths of the term of the leasehold, inclusive of the term that may be provided by an enforceable option of renewal. The term of the leasehold must be unexpired at the time that the loan is made and may not exceed 35 years.
     (7) Except with the commissioner's consent, an insurer may not invest or have invested at any one time more than 20% of its assets in mortgage loans.

     History: En. Sec. 123, Ch. 286, L. 1959; amd. Sec. 1, Ch. 20, L. 1961; R.C.M. 1947, 40-3126; amd. Sec. 4, Ch. 570, L. 1979; amd. Sec. 143, Ch. 42, L. 1997; amd. Sec. 1, Ch. 94, L. 1997.