Current law limits the investments insurers may make in mortgage loans and similar instruments to those secured by property located in the United States and having a loan-to-value ratio of 80% in most cases. The national association of insurance commissioners (NAIC) recommends limitations that differ in certain respects from these requirements. The bill adopts the NAIC's recommendations by:
- Authorizing investment in loans secured by property in either the United States or Canada;
- Increasing the allowable loan-to-value ratio to 90% for purchase-money mortgages if the insurer holds the note, 80% for commercial property if the payment schedule meets specified requirements, up to 97% for mortgages on residential property if mortgage insurance applies, and 75% in all other cases; and
- Repealing portions of current law that conflict with these provisions.