Investments in subsidiaries and related corporations.

(1) AUTHORIZATION.—Any insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries, subject to the limitation of subsection (2). Such subsidiaries may conduct any kind of business, and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of an insurer.

(2) ADDITIONAL INVESTMENT AUTHORITY.—In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under all other sections of this chapter, an insurer may also invest and maintain investments in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries or related corporations. At the time any such new or additional investment is made, the sum of the insurer’s cost of such investment and the aggregate values as permitted by s. 625.151(3) of all existing investments in such corporations shall not exceed the lesser of:

(a) Ten percent of the insurer’s admitted assets; or

(b) Fifty percent of the insurer’s surplus as to policyholders in excess of the minimum surplus as to policyholders required to be maintained by the insurer under this code.

(3) DEFINITIONS.—For purposes of this section:

(a) “Subsidiary” means a corporation in which the insurer holds, directly or indirectly through an intermediary, sufficient stock to give the insurer a controlling interest.

(b)1. “Related corporation” means a corporation in which the insurer’s parent corporation holds, directly or indirectly through an intermediary, sufficient stock to give the insurer’s parent corporation a controlling interest.

2. As to a limited reciprocal, “related corporation” means any corporation that is a member of the limited reciprocal.

(4) DEBT OBLIGATIONS.—Debt obligations, other than mortgage loans, made under the authority of this section must meet amortization requirements in accordance with the latest edition of the publication “Valuation of Securities” by the National Association of Insurance Commissioners or its successor organization; provided that such amortization methodology is substantially similar to the methodology used by the National Association of Insurance Commissioners in its July 1, 2002, edition of such publication.

(5) INVESTMENT INCLUDES LOANS.—For purposes of this section, an insurer’s investment in a subsidiary or related corporation shall be deemed to include all sums loaned to such subsidiary or related corporation.

(6) CONSTRUCTION.—Nothing in this section shall be construed to expand, extend, or otherwise enlarge the provisions of chapter 687.

(7) APPLICABILITY.—This section does not apply to a foreign insurer’s investments in its subsidiaries or related corporations if:

(a) The foreign insurer is domiciled in a state that is a member of the National Association of Insurance Commissioners.

(b) Such investments in the foreign insurer’s subsidiaries or related corporations are:

1. Permitted under the laws of the foreign insurer’s state of domicile.

2.a. Assigned a rating of 1, 2, or 3 by the Securities Valuation Office of the National Association of Insurance Commissioners; or

b. Qualify for the National Association of Insurance Commissioners’ filing exemption rule and assigned a rating by a nationally recognized statistical rating organization that would be equivalent to a rating of 1, 2, or 3 by the Securities Valuation Office.