(a) No security or investment, other than real and personal property acquired under § 1324 (real estate) of this title, shall be eligible for acquisition, unless it is interest bearing or interest accruing or entitled to dividends or is otherwise income earning, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon. A debt security will be considered to be income earning where, although bearing no fixed or contingent interest, it is issued at a discount and contains a specific maturity date on which redemption is to be made at a stated value. Stocks will be considered income earning although dividends are currently not being paid. Nothing in this section shall prohibit an insurer from giving or receiving a participating interest in a bond, note or other evidence of indebtedness acquired by such insurer under § 1323 of this title, or the acquisition by an insurer of warrants, options or similar rights to acquire securities if:
(1) The acquisition of such securities would then be permitted by this chapter (other than § 1320 of this title); or
(2) Such warrants, options or similar rights are acquired in connection with an investment otherwise permitted by this chapter.
(b) No security or investment shall be eligible for purchase at a price above its fair value or market value.
(c) Nothing in this chapter 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 upon a debt or judgment, or under a lawful and bona fide agreement of bulk reinsurance, merger or consolidation, or if acquired by it through the exercise of warrants, options or similar rights to acquire securities received by it in accordance with this chapter. Nothing in this chapter shall prevent any insurer from entering into an agreement for the purpose of protecting the interests of the insurer in securities lawfully held by it, or for the purpose of reorganization of a corporation which issued securities so held, and from depositing such securities with a committee or depositaries appointed under such agreement, nor from accepting stock, bonds or other securities or other property which may be distributed pursuant to any such agreement, or to any plan of reorganization or arrangement; and no provision of this chapter shall prevent any insurer from acquiring or holding any property acquired in satisfaction of any debt previously contracted, or that shall be obtained by sale or foreclosure of any security held by it. Any security or property so acquired which is not otherwise an eligible investment under this chapter shall be disposed of pursuant to § 1325 of this title if real estate, or pursuant to § 1326 of this title if personal property or securities.
(d) Except as provided in § 1305(5) of this title, the limitations of this chapter shall apply to all investments described in § 77r-1 of Title 15 of the United States Code [15 U.S.C. § 77r-1].
(e) For purposes of the investment limitations of this chapter, investments made by an insurer shall include investments made by that insurer's investment subsidiary.