Ins 6.20(4)(b) (b) Any asset under s. 620.22 (9), Stats.

Ins 6.20(4)(c) (c) Any derivative instrument.

Ins 6.20(5) (5) Special limitations pertaining to a restricted insurer other than a town mutual insurer. An insurer that is restricted under s. 620.03, Stats., and is not a town mutual insurer shall not invest in any of the following investments:

Ins 6.20(5)(a) (a) Bonds or evidences of indebtedness. An insurer shall not invest in bonds or evidences of indebtedness described in s. 620.22 (1), Stats., unless the bonds or evidences of indebtedness are lawfully authorized and have at least one of the following characteristics:

Ins 6.20(5)(a)1. 1. At the time of purchase have a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO.

Ins 6.20(5)(a)2. 2. The bonds or evidences of indebtedness are of a municipally owned public utility of this state created pursuant to section 3 of article XI of the constitution, and the net book value of the property pledged as security for the bonds has been established or approved by the public service commission, and the total issue of the bonds does not exceed 50% of the net book value of such property.

Ins 6.20(5)(a)3. 3. Principal and interest are payable from revenues of a public utility or railroad owned by or held for the benefit of any governmental unit in the United States or Canada, if they are adequately secured by mortgage or lien on property or by specific pledge or revenues, and lawful authorizing resolutions or ordinance of the governing body of the unit require that during the life of the bond or evidence of indebtedness the rates, fees, tolls or charges together with any other revenues pledged shall at all times produce revenues sufficient to pay all expenses of operation and maintenance, interest as promised and the principal sum when due.

Ins 6.20(5)(a)4. 4. The bonds or evidences of indebtedness are of public utilities in the United States or Canada and are either adequately secured by mortgage, pledge or other collateral, or have had net earnings available for fixed charges that for the previous 3 fiscal years have averaged per year not less than 1 1/2 times the average annual fixed charges.

Ins 6.20(5)(a)5. 5. The bonds or evidences of indebtedness are of a United States or Canadian private corporation, and they are either adequately secured by mortgage, pledge or other collateral, or are issued by a corporation which has had net earnings available for fixed charges that have averaged for the previous 5 years, and equaled for each of the previous 2 years an annual amount which exceeded average annual fixed charges by at least 50%, or 25% in the case of corporations engaged primarily in wholesale or retail merchandising, installment, commercial and consumer financing, factoring or small loan business.

Ins 6.20(5)(b) (b) Equipment securities. In equipment securities or in certificates of an equipment trust under sub. (8) (b) unless the obligor’s net earnings have averaged at least 2 times its average annual fixed charges for the previous 3 years.

Ins 6.20(5)(c) (c) Real estate loans. In real estate loans:

Ins 6.20(5)(c)1. 1. On the security of encumbered property, but property shall not be deemed encumbered because of unpaid but not delinquent assessments and taxes, mineral, oil or timber rights, easements for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, with or without a reversionary clause, or leases under which rents or profits are reserved to the owner;

Ins 6.20(5)(c)2. 2. In excess of 2/3 of the fair market value, including buildings covered by the mortgage. If the value of buildings constitute part of the security, the buildings must be insured adequately to protect the insurer’s security interest. The 2/3 limitation shall not apply to any loan fully insured by a federal insurance corporation; nor

Ins 6.20(5)(c)3. 3. On the security of a leasehold interest in real property unless it is unencumbered except by rentals owed to the owner of the fee, has at least 25 years yet to run, and then for no more than 50% of the fair market value of the leasehold less the present value of all rentals due upon it to the owner of the fee.

Ins 6.20(5)(d) (d) Preferred shares. In preferred shares unless the issuing company has had, disregarding fixed charges on indebtedness and dividend requirements on preferred stock for the retirement of which provision has been made at the date of the investment, net earnings:

Ins 6.20(5)(d)1. 1. Available for fixed charges and dividends that during the previous 5 fiscal years have averaged not less than twice the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or

Ins 6.20(5)(d)2. 2. Available for fixed charges and dividends that for each of the previous 3 fiscal years have been not less than 1 1/2 times the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or

Ins 6.20(5)(d)3. 3. Available to meet preferred dividend requirements of the previous 5 years, after allowance for fixed charges and federal and state income taxes, that have averaged not less than 3 times the preferred dividend requirements.

Ins 6.20(5)(e) (e) Common stock. In common stock except:

Ins 6.20(5)(e)1. 1. In accordance with a plan of acquisition proposed by the insurer and approved by the commissioner; and

Ins 6.20(5)(e)2. 2. In common stocks which are authorized securities for NASDAQ, the automated quotation system of the National Association of Securities Dealers.

Ins 6.20(5)(f) (f) Real property. In any investment under s. 620.22 (4) or (5), Stats., except with prior written approval of the commissioner.

Ins 6.20(5)(g) (g) Limitations on amount of investment.

Ins 6.20(5)(g)1. 1. Except as permitted under subd. 2., more than 3% of assets in securities of any single issuer unless it obtains the prior written permission of the commissioner or unless the investment is in securities of the government of the United States or its instrumentalities or in securities guaranteed by the full faith and credit of the United States; or

Ins 6.20(5)(g)2. 2. More than 10% of assets in the securities of one state, of one instrumentality of a state, or of one governmental unit of a state.

Ins 6.20(6) (6) Town mutual insurance companies.

Ins 6.20(6)(a) (a) Status as a restricted insurer. Town mutual insurance companies authorized to operate under the provisions of ch. 612, Stats., are restricted insurers and are subject to the restrictions of ss. 612.36 and 620.03 (1), Stats., sub. (4) and other applicable provisions of this section. The commissioner may grant exemptions under s. 620.03 (2), Stats.

Ins 6.20(6)(b) (b) Permitted investments. Except as permitted by pars. (c), (d) and (e), a town mutual insurer may only invest in one or more of the following:

Ins 6.20(6)(b)1. 1. Treasury bonds, treasury notes, treasury bills or any other direct obligations of the United States government or agencies or instrumentalities of the United States government with a final maturity 15 years or less, except that no part of the amount determined under this paragraph shall be invested in zero coupon bonds or collateralized mortgage obligations.