§ 4526. Investments of fraternal benefit societies. (a) For purposes
of investments made pursuant to the provisions of section one thousand
four hundred four of this chapter, the term "institution" shall only
include a corporation, a joint-stock association, and a business trust
and the term "obligations" shall only include bonds, debentures, notes,
or other evidences of indebtedness. Notwithstanding the provisions set
forth in items (ii) and (iv) of subparagraph (A) of paragraph two of
subsection (a) of such section, a society is authorized to invest, in an
amount not to exceed thirty-three percent of its admitted assets as
shown by its last statement on file with the superintendent, in
obligations of American institutions which:

(1) are rated BBB or higher (or the equivalent thereto) by a
securities rating agency recognized by the superintendent, or if not so
rated, are similar in structure and in all material respects to other
obligations of the same institution which are so rated, or

(2) have been given at least the second highest quality designation by
the Securities Valuation Office of the National Association of Insurance
Commissioners.

(b) Investments in loans secured by real property and investments in
real property made pursuant to the provisions of paragraphs four and
five of subsection (a) of such section shall be permitted only to the
extent that such investments are acquired or held directly by such
society.

(c) Foreign investments made pursuant to the provisions of paragraph
six of such subsection shall only consist of the following:

(1) Investments in Canada which are substantially of the same kinds,
classes and investment grades as those eligible for investment under
other provisions of such subsection. The aggregate amount of such
investments held at any time shall not exceed the greater of ten percent
of the society's admitted assets as shown by its last statement on file
with the superintendent or the amount, if any, permitted pursuant to
paragraph two hereof.

(2) Investments in a foreign country or in a possession of the United
States if the society is authorized to do business therein, or if the
society has outstanding insurance, annuity or reinsurance contracts on
lives or risks resident or located therein; provided such investments
are substantially of the same kinds, classes and investment grades as
those eligible for investment under other provisions of such subsection.
The aggregate amount of such investments and of cash in the currency of
such country or possession at any time held shall not, except as
permitted by paragraph one hereof, exceed the amount which such society
is required by law to invest in such country or possession or one and
one-half times the amount of its reserves and other obligations under
such contracts, whichever is greater.

(3) Investments in any foreign country, in addition to investments
permitted under paragraphs one and two hereof, which are substantially
of the same kinds, classes and investment grades, and in the same
proportions, as those eligible for investment under other provisions of
such subsection and subsection (a) of this section. The aggregate amount
of such investments made pursuant to this paragraph shall not exceed
four percent of the society's admitted assets as shown by its last
statement on file with the superintendent and provided that a society
shall not make any investment in any foreign country pursuant to this
paragraph, if such investment, together with all other investments in
the same foreign country so made and then held by such insurer, would
exceed one percent of the society's admitted assets as shown by its last
statement on file with the superintendent.

(d) Investments in equity interests made pursuant to paragraph eight
of such subsection shall be limited to investments in common shares and
shall not include investments in partnership interests or other equity
interests.