§ 6406. Investments; exception. (a) Every title insurance corporation
organized and doing business under this article shall invest and keep
invested an amount at least equal to its required minimum capital in the
types of investments specified in section one thousand four hundred two
of this chapter, except that it shall invest and keep invested at least
thirty-five percent of its minimum capital in those types of investments
specified in paragraphs one and two of subsection (b) of such section.

(b) Every title insurance corporation organized and doing a title
insurance business under this article shall confine its investment of
all of its funds, other than those specified in subsection (a) hereof,
to investments permitted by paragraph two of subsection (a) of section
one thousand four hundred three of this chapter except as follows:

(1) No loan secured by mortgage on any one piece or parcel of property
(excluding any part guaranteed under title three of the Servicemen's
Readjustment Act of 1944 (38 U.S.C. § 1801)) shall at the time of
investment exceed (i) three-fourths of the value of the real property
securing the same if (I) such real property is primarily improved by a
single family residence, (II) the aggregate principal amount of the loan
or loans secured by such real property does not exceed thirty thousand
dollars, and (III) the evidences of indebtedness provide for
amortization of principal over a period of not more than thirty years,
or (ii) two-thirds of the value of the real property securing the same
in all other cases, as shown by the appraisal of one or more competent
and experienced appraisers.

(2) Any such corporation may invest in loans secured by mortgages on
real property guaranteed as to principal or interest by the United
States.

(3) No title insurance corporation shall at any time have invested in
bonds, notes or other evidences of indebtedness secured by deeds of
trust or real estate mortgages, as specified in this paragraph except
bonds or notes secured by mortgage or trust deed guaranteed or insured
by the federal housing administration under an act of congress of the
United States of June 27, 1934, entitled the "National Housing Act,"(12
U.S.C. § 1701). Notwithstanding the provisions of clause (I) of item (v)
of subparagraph (A) of paragraph four of subsection (a) of section one
thousand four hundred four of this chapter, the aggregate investments
held by a title insurance corporation of the types described in such
subparagraph and in purchase money mortgages received by it in part
payment of the consideration for the sale or exchange of real property
owned by it, shall not exceed seventy percent of its admitted assets as
shown by its last statement on file with the superintendent.

(4) No title insurance corporation shall invest in or lend upon the
security of any one parcel of property an amount exceeding seven percent
of its total admitted assets, except that such corporation may invest in
or lend upon an obligation or obligations secured by a mortgage or
mortgages on property guaranteed as to principal or interest by the
United States, or guaranteed or insured under the National Housing Act
(12 U.S.C. § 1701), an amount not exceeding twenty-five percent of its
total admitted assets, if at the time of the making of the commitment
for such investment or loan such corporation shall have entered into an
agreement in writing with a mortgagee approved under the provisions of
the National Housing Act, for the sale of such investment or loan for an
amount in cash not less than the full amount of such investment or loan.

(5) Notwithstanding the provisions of paragraph eight of subsection
(a) of section one thousand four hundred four of this chapter, no title
insurance corporation shall invest in, or otherwise acquire or loan upon
in any one institution's outstanding equity interests an amount which
exceeds two percent of the admitted assets of such title insurance
corporation as shown by its last statement on file with the
superintendent. The aggregate cost of all investments in equity
interests then held by any title insurance corporation pursuant to this
paragraph, paragraph six hereof, section one thousand four hundred three
and paragraph eight of subsection (a) of section one thousand four
hundred four of this chapter shall not exceed the lesser of twenty-five
percent of the insurer's total admitted assets or one-half of the
insurer's surplus to policyholders as shown by its last statement on
file with the superintendent.

(6) Notwithstanding the provisions of paragraph eight of subsection
(a) of section one thousand four hundred four of this chapter and
paragraph five hereof, a title insurance corporation may invest in the
shares of other insurance corporations and in the shares and obligations
of any corporation which is engaged exclusively in a kind of business
properly incidental to the insurance business of such title insurance
corporation, amounts which do not in total exceed ten percent of its
total admitted assets as shown by its last statement on file with the
superintendent.

(7) No title insurance corporation shall hold a direct or indirect
ownership interest in a risk retention group, as defined in article
fifty-nine of this chapter, other than in a risk retention group all of
whose members are insurance companies.