Page:United States Statutes at Large Volume 74.djvu/904

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[74 Stat. 864]
[74 Stat. 864]
PUBLIC LAW 86-000—MMMM. DD, 1960

864

Bonds of solvent corporations.

Preferred stock.

PUBLIC LAW 8 6 - 7 3 1 - S E P T. 8, 1960

[74 S T A T,

"(c) Equipment or machinery for use in transportation, manufacturing, production or distribution, leased or to be leased to any solvent corporation domiciled within the United States or the Dominion of Canada, if the bonds or other evidences of indebtedness, if any, of such corporation are eligible as investments under the provisions of subsection (7) of this section: Provided, however, That no company shall invest an amount in excess of 2 per centum of its admitted assets in such equipment or machinery leased or to be leased to any one corporation." (c) Subsection (7) of section 35 of chapter III of the Life Insurance Act (D.C. Code 35-535 (7)) is amended to read as follows: "(7)(a) Bonds and other evidences of indebtedness of any solvent corporation created under the laws of the United States or any State thereof, or the District of Columbia, or the Dominion of Canada, or any Province thereof: Provided, That (i) no company shall invest an amount in excess of 2 per centum of its admitted assets in any one issue of such obligations of any one corporation; (ii) the net earnings of the issuing corporation available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by such insurance company shall have averaged yearly, and during the last year of said five-year period shall have been not less than one and one-half times its annual fixed charges at the time of the investment, or, if a new issue, as shown by the pro forma statement of the corporation; and (iii) there shall have been no defaults in interest thereon, or on any such obligations of such corporation which are of equal or higher priority with those purchased, during the period of five years next preceding the date of acquisition, or, if outstanding for less than five years, at any time since said obligations were issued. The term 'net earnings available for fixed charges', as used herein, shall mean the net income after deducting all operating and maintenance expenses, depreciation and depletion, and taxes other than Federal, State, and District of Columbia income taxes, but nonrecurring items of income and expense may be eliminated. The term 'fixed charges' as used herein shall include interest on all of the fixed interest bearing debt of the corporation outstanding and maturing in more than one year, as of the date of acquisition, and in case of investment in contingent interest obligations, said term shall also include maximum annual contingent interest as of said date. The earnings of all predecessor, merged, consolidated, or purchased companies may be included through the use of consolidated or pro forma statements provided the fixed charges of all such companies are also included. "(b) Certificates, notes, or other obligations issued by trustees or receivers of any corporation created or existing under the laws of the United States or of any State, District, or Territory thereof, which, or the assets of which, are being administered under the direction of any court having jurisdiction: Provided, That no company shall invest an amount in excess of 2 per centum of its admitted assets in any one issue of such certificates, notes or other obligations of any one corporation." (d) Subsection (9) of section 35 of chapter III of the Life Insurance Act (D.C. Code 35-535(9)) is,amended to read as follows: "(9)(a) Preferred stock of any solvent corporation (other than its own) created under the laws of the United States, or of any State thereof, or the District of Columbia, or the Dominion of Canada, or any Province thereof, where such corporation has not failed in any one of the three fiscal years next preceding such investment, to have earned a sum applicable to dividends on such preferred stock equal at least to three times the amount of dividends due in that year, or where in case of issuance of new preferred stock such earnings appli-