§ 1414. Valuation of investments. (a) (1) All obligations having a
fixed term and rate of interest and held by any life insurance company
or fraternal benefit society authorized to do business in this state, if
amply secured and not in default as to principal or interest, shall be
valued as follows:

(A) if purchased at par, at the par value;

(B) if purchased above or below par, on the basis of the purchase
price adjusted so as to bring the value to par at maturity and yield in
the meantime the effective rate of interest at which the purchase was
made, or, in the superintendent's discretion, on the basis of the method
of calculation commonly known as the pro rata method.

(2) The purchase price shall in no case be taken at a higher figure
than the actual market value at the time of acquisition.

(3) The superintendent 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 types of
securities so eligible for amortization. All obligations which in the
judgment of the superintendent are not amply secured shall not be
eligible for amortization and shall be valued in accordance with
subsection (b) hereof.

(4) The superintendent may, if he finds that the interests of
policyholders so permit or require, by regulation permit or require any
class of insurers, other than life insurance companies or fraternal
benefit societies, authorized to do business in this state, to value
their obligations in accordance with the foregoing rule.

(b) (1) Except securities subject to amortization and except as
otherwise provided in this chapter, the investments (including any
investments in an investment company) of all insurers authorized to do
business in this state shall be valued, in the discretion of the
superintendent, at their market value, or at their appraised value, or
at prices determined by him as representing their fair market value.

(2) If the superintendent finds that in view of the character of
investments of the insurer it would be prudent for such insurer to
establish a special reserve for possible losses or fluctuations in the
values of its investments, he may require that a reserve, reasonable in
amount, be established and maintained and that it be reported in any
statement or report of the financial condition of such insurer.

(3) The superintendent may, in connection with any examination or
required financial statement of the insurer, require it to furnish him a
complete financial statement and audited report of the financial
condition of any corporation whose securities are owned wholly or partly
by such insurer and may cause an examination to be made of any
subsidiary or affiliate of such insurer.

(c) (1) The shares of an insurance company which is not a subsidiary,
or affiliate, including for purposes of this subsection any corporation
having a majority of its assets invested in one or more insurance
companies, shall be valued in accordance with subsection (b) of this
section if such shares are registered on a national securities exchange,
as provided in the federal Securities Exchange Act of 1934, 15 U.S.C. §§
78a-78kk.

(2) Except as otherwise provided in section four thousand two hundred
forty of this chapter, shares of an insurance company which is a
subsidiary, or affiliate, shall be valued according to the methods
approved by the National Association of Insurance Commissioners for the
valuation of subsidiary, controlled and affiliated entities, or such
other method that the superintendent in a regulation determines would be
in the best interests of the policyholders and the people of this state.

(3) The book value of common shares of an insurance company shall be
ascertained by dividing (i) the amount of the insurer's capital and
surplus less the value of all its preferred shares, if any, outstanding,
by (ii) the number of common shares outstanding.

(4) Notwithstanding the foregoing provisions, an insurer may, at its
option, value its shares in a subsidiary insurance company in an amount
not less than acquisition cost if it is less than the value determined
as hereinbefore provided.

(d) Real property acquired by foreclosure or by deed in lieu thereof,
in the absence of a recent appraisal deemed reliable by the
superintendent, shall not be valued at an amount greater than the unpaid
principal of the defaulted loan at the date of such acquisition,
together with any taxes and expenses paid or incurred by such insurer at
such time in connection with such acquisition (but not including any
uncollected interest on such loan), and the cost of additions or
improvements thereafter made by such insurer and any amounts thereafter
paid by such insurer on any assessments levied for improvements in
connection with the property.

(e) Purchase money mortgages received on dispositions of real property
shall be valued in an amount not exceeding ninety percent of the value
of such real property as determined by an appraisal made by an appraiser
at or about the time of the disposition; provided that purchase money
mortgages received on dispositions of real property acquired or held
pursuant to paragraph five of subsection (a) of section one thousand
four hundred four of this article or on dispositions of real property
acquired or held under section one thousand four hundred five of this
article in satisfaction of loans, mortgages, liens, judgments, decrees
or other debts previously owing to such insurer in the course of its
business shall in no event be valued in an amount exceeding its
acquisition costs.

(f) The stock of a subsidiary of an insurer shall be valued on the
basis of the greater of: (i) the value of only such assets of such
subsidiary as would constitute lawful investments if acquired or held
directly by the insurer; or (ii) such other value as may be determined
pursuant to standards and cumulative limitations in regulations
promulgated by the superintendent.

(g) Notwithstanding any provision contained in this section or
elsewhere in this chapter, if the superintendent finds that the
interests of policyholders so permit or require, he may permit or
require any class of insurers authorized to do business in this state to
value their investments or any class thereof as of any date heretofore
or hereafter in accordance with any applicable valuation or method
approved by the National Association of Insurance Commissioners.