(a) An insurer may invest in:
(1) The stock of subsidiary insurance corporations formed or acquired by it; or,
(2) in addition to the right to own stock in other corporations given insurers in § 1305(2) of this title, it may also invest in not less than a majority of the voting stock of a business corporation formed under the laws of this or another state or a foreign nation, the activities of which corporation are primarily supplementary and complementary to the convenient operation of the insurer's business or to the administration of its affairs, and corporations engaged or organized to engage in the marketing of financial, insurance or service products, the products to be subject to the approval of the Insurance Commissioner.
As used in this title, “subsidiaries” shall include, in addition to those such corporations where the insurer owns a majority of their stock, those corporations formed or acquired by an insurer where it owns less than a majority of such corporation's voting stock due to the laws of a foreign national which require the insurer to own less than a majority of the voting stock of such subsidiary insurance corporation if it is to operate in that nation.
(b) Limitations on investments in subsidiaries shall be as follows:
(1) Domestic insurers transacting insurance in any state of the United States of America and not establishing reserves and operating in accordance with § 1104 of this title.
a. All of the insurer's investments pursuant to paragraph (a)(1) of this section shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer.
b. All of the insurer's investments pursuant to paragraph (a)(2) of this section shall not at any time exceed the lesser of 10 percent of the insurer's admitted assets or 50 percent of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer. With prior approval of the Commissioner, an insurer may invest a greater amount in the securities of subsidiaries than permitted by paragraph (a)(2) of this section if after such investment the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer, will be reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs.
(2) Domestic insurers transacting insurance in foreign countries only, and not transacting insurance in any state of the United States of America and establishing reserves and operating in accordance with § 1104 of this title:
All of the insurer's investments in subsidiaries shall not at any time exceed 100 percent of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer.(c) All of the insurer's investments under this section, together with its investments in insurance stocks under § 1312(b) of this title, shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in § 511(a)(2) of this title) if other than a life insurer.”