§ 5-506. Prohibited investments and loans

   (a) In general. -- In addition to investments otherwise excluded under this article, a life insurer may not directly or indirectly invest in or lend its funds on the security of:

   (1) an investment or security that the Commissioner finds is designed to evade a prohibition of this article; or

   (2) issued shares of the life insurer's capital stock, except:

      (i) for the purpose of mutualization under Title 3, Subtitle 1 of this article; or

      (ii) in connection with a plan approved by the Commissioner for purchase of the shares by employees or insurance producers of the life insurer.

(b) Loans to officer or director. -- A life insurer may not directly or indirectly make a loan to an officer or director of the life insurer, except:

   (1) a policy loan; or

   (2) a bona fide mortgage loan on the principal residence of the officer or director that has been approved or ratified by the board of directors of the life insurer.

HISTORY: An. Code 1957, art. 48A, § 91; 1995, ch. 36; 2001, ch. 731, § 9; 2002, ch. 19, § 5.