An insurer may invest in nonassessable dividend-paying stocks, common or preferred, of any solvent corporation other than a corporation engaged solely in the business of operating real estate or a corporation having substantially all of its assets invested in the shares of such corporation, created or existing under the laws of the United States of America or of any state or of the District of Columbia, provided cash dividends on the common stocks shall have been paid out of current earnings in at least three of the last five years preceding the purchase.
(Code 1933, § 56-1020, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1999, p. 592, § 6.)
Cross references.- Securities regulation, T. 10, C. 5.
OPINIONS OF THE ATTORNEY GENERAL
Investment in Puerto Rican corporation not authorized.
- An insurer would not be authorized under this section to invest in the corporate stock of a corporation organized under the laws of the Commonwealth of Puerto Rico. 1971 Op. Att'y Gen. No. 71-50.
Clause making investments eligible if legal on date of title inapplicable to reserve requirements.
- The drafters of this title did not intend that the provisions of former Code 1933, § 56-1002(2) (see O.C.G.A. § 33-11-2), should be applicable to the reserve distribution requirements of former Code 1933, § 56-1005 (see O.C.G.A. § 33-11-5); inasmuch as the Legislature elsewhere authorized the holding of common stocks, subject to somewhat liberalized restrictions, by this section, they clearly did not intend that the generalized "savings clause" contained in former Code 1933 § 56-1002(2), apply to the specific quantitative restrictions on the holding of common stocks contained in the reserve distribution requirements of former Code 1933, § 56-1005; stated differently, the Legislature, while liberalizing the restrictions upon the quality of common stocks which could be held, on the one hand, imposed more rigid restrictions with respect to the quantitative portfolio distribution of such common stock holdings, on the other hand. 1971 Op. Att'y Gen. No. 71-170.
The proper application of the "savings clause" of former Code 1933, § 56-1002(2) (see O.C.G.A. § 33-11-2), was to that general group of assets, including common stock, which an insurer might lawfully hold, insofar as the qualitative restrictions contained in this title raised or altered the qualitative restrictions of the prior law; any attempt to apply the "savings clause" of former Code 1933, § 56-1002(2), to the reserve distribution requirements of former Code 1933, § 56-1005 (see O.C.G.A. § 33-11-5) rendered the latter section largely meaningless and was inconsistent with the general tenor of former Code 1933, § 56-1020 (see O.C.G.A. § 33-11-21). 1971 Op. Att'y Gen. No. 71-170.
RESEARCH REFERENCES
Am. Jur. 2d.
- 43 Am. Jur. 2d, Insurance, § 58.