CODE OF VIRGINIA

MORTGAGE PASS-THROUGH SECURITIES (§ 38.2-1437.1)

A domestic insurer may invest in mortgage pass-through securities backed by a
pool of mortgages of the kind, class and investment quality as those eligible
for investment under §§ 38.2-1434 through 38.2-1437, under the following
conditions:

   1.  The servicer of the pool of mortgages shall be a business entity created
   under the laws of the United States or any state;

   2.  The pool of mortgages is assigned to a business entity, other than a sole
   proprietorship, having a net worth of at least five million dollars, as
   trustee for the benefit of the holders of the securities;

   3.  A domestic insurer shall not invest under this section more than two
   percent of its admitted assets in securities backed by any single mortgage
   pass-through pool;

   4.  All mortgage pass-through securities acquired by a domestic insurer under
   this section shall provide for flow-through of both principal and interest
   payments payable on the underlying mortgage loan assets; mortgage pass-through
   securities promising principal-only, interest-only or residual interests-only
   in the underlying mortgage assets shall not be acquired; and

   5.  The securities on the date of investment shall be high grade obligations.

HISTORY: 1992, c. 588; 1999, c. 483.