Pennsylvania Act 1935-312 — INSURANCE COMPANIES, DEBTS VALUATED

Act text

INSURANCE COMPANIES, DEBTS VALUATED
                 Act of Jul. 12, 1935, P.L. 969, No. 312              Cl. 40
                                  AN ACT

     Providing for the valuation of bonds and other evidences of debt
        held by domestic and foreign stock and mutual insurance
        companies, associations and exchanges authorized to do
        business in this State. (Title amended Aug. 2, 1963, P.L.491,
        No.256)

        Section 1.  Be it enacted, &c., That all bonds or other
     evidences of debt held by any domestic or foreign stock or
     mutual insurance company, association or exchange, authorized to
     do business in this State, shall, if amply secured and if not in
     default as to principal or interest, be valued: If purchased at
     par, at the par value; and if purchased above or below par, be
     valued either (1) on the basis of the purchase price adjusted so
     as to bring the value to par at maturity and so as to yield,
     meantime, the effective rate of interest at which the purchase
     was made, or (2) on the basis of the method of calculation
     commonly known as the pro rata method: Provided, That the
     purchase price shall in no case be taken at a higher figure than
     the actual market value at the time of purchase. The Insurance
     Commissioner shall have the power to determine the eligibility
     of any such investments for valuation on the basis of
     amortization and may, by regulation, prescribe or limit the
     classes of securities so eligible for amortization. Any such
     insurer may return such bonds or other evidences of debt at
     their market value or their book value but, in no event, at an
     aggregate value exceeding the aggregate of the values calculated
     according to the method employed by it in conformity with the
     foregoing: Provided, however, That where a bond or evidence of
     debt amply secured, and not in default as to principal or
     interest, has been acquired by a domestic stock or mutual
     company, association or exchange as a result of an exchange of
     securities and the Insurance Commissioner has determined such
     transaction to be an exchange and to be for the betterment of
     the portfolio of such insurer, the purchase price of such bond
     or evidence of debt shall be deemed to be the value of the
     security or securities exchanged therefor, as shown in the last
     preceding annual statement of such domestic stock or mutual
     company, association or exchange filed with the Insurance
     Commissioner.
        (1 amended Aug. 2, 1963, P.L.491, No.256)
        Section 2.  All acts and parts of acts inconsistent herewith
     are hereby repealed.