Ins. Code, § 1241

(a) Subject to the limitation in Section 1242, and except for those foreign investments permitted under Section 1192.95, a domestic insurer may acquire foreign investments of substantially the same type as those that an insurer is permitted to acquire pursuant to this code, if, as a result of the acquisition and after giving effect to the investment, both of the following apply:

(1) The aggregate amount of foreign investments then held by the insurer does not exceed:

(A) Twenty percent of admitted assets, for an insurer with admitted assets equal to or in excess of five hundred million dollars ($500,000,000).

(B) Five percent of admitted assets, for an insurer with admitted assets less than five hundred million dollars ($500,000,000).

(2) The aggregate amount of foreign investments then held by the insurer in a single foreign jurisdiction does not exceed:

(A) Ten percent of admitted assets, for any foreign jurisdiction that has a sovereign debt rating of SVO 1.

(B) Three percent of admitted assets, for any foreign jurisdiction that has a sovereign debt rating lower than SVO 1.

(b) Subject to the limitations of Section 1242, an insurer may acquire investments denominated in foreign currencies, whether or not they are foreign investments acquired under subdivision (a) of this section, or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction as defined in Section 1211 with respect to investments denominated in a foreign currency, if the following requirements are met:

(1) The aggregate amount of investments then held by an insurer under this subdivision denominated in foreign currencies does not exceed:

(A) Ten percent of admitted assets, for an insurer described in subparagraph (A) of paragraph (1) of subdivision (a).

(B) Three percent of admitted assets, for an insurer described in subparagraph (B) of paragraph (1) of subdivision (a).

(2) The aggregate amount of investments then held by an insurer under this subdivision denominated in the foreign currency of a single foreign jurisdiction does not exceed:

(A) Ten percent of admitted assets, for an insurer described in subparagraph (A) of paragraph (1) of subdivision (a) for a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 3 percent of admitted assets as to any other foreign jurisdiction.

(B) Three percent of admitted assets, for an insurer described in subparagraph (B) of paragraph (1) of subdivision (a).

(3) An investment shall not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under Section 1211 and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate that effectively insulates the investment cashflows against future changes in currency exchange rates during the period the contract or contracts are in effect.

(c) In addition to investments permitted under subdivisions (a) and (b), a domestic insurer that is authorized to do business in a foreign jurisdiction, and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in the foreign currency of that jurisdiction may acquire foreign investments respecting that jurisdiction, subject to the limitations of Section 1242. However, investments made under this subdivision in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of Section 1242 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer shall not exceed the greater of the following:

(1) The amount that the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction.

(2) One hundred fifteen percent of the amount of the insurer’s reserves, net of reinsurance and other obligations under the contracts.

(d) In addition to investments permitted under subdivisions (a) and (b), an insurer that is not authorized to do business in a foreign jurisdiction, but that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in the foreign currency of that jurisdiction may acquire foreign investments respecting that jurisdiction, and may acquire investments denominated in the currency of that jurisdiction subject to the limitations of Section 1242. However, investments made under this subdivision in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of Section 1242 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer shall not exceed 105 percent of the amount of the insurer’s reserves, net of reinsurance and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.

(e) The investments acquired under this section shall be subject to Sections 1200, 1201, and 1202.

(f) Nothing in this section shall in any way restrict or limit Canadian investments otherwise permitted by this code. Canadian investments acquired under other sections of this code shall not be considered foreign investments for purposes of the limitations set forth in this section.

(g) Investments made pursuant to Section 1192.9 in investment companies shall be governed by this article to the extent specified in Section 1192.9.