Or. Admin. R. 410-141-5085

Current through Register Vol. 63, No. 6, June 1, 2024

Section 410-141-5085 - ASSET VALUATION AND PERMITTED INVESTMENTS: Definitions

As used in OAR 410-141-5085 to 410-141-5165:

(1) "Amply secured obligation" means an obligation which is not in default and as to which no default is imminent, and which satisfies the requirements of one or more of the following subsections:

(a) An obligation of a sovereign or political subdivision thereof, if it is issued, assumed or guaranteed by the governmental unit involved and is payable either from:

(b) Taxes levied or which may be levied by such governmental unit; or

(c) Adequate special revenues pledged or otherwise appropriated or required by law to be used for the purpose of such payment, provided the law authorizing the issuance of the obligation requires that adequate rates be fixed, maintained and collected at all times so as to produce sufficient revenue or earnings to pay all operating expenses, maintenance charges, and the principal, interest and dividends on the obligation. An obligation payable solely out of special assessments on real property benefited by local improvements shall not be considered amply secured unless the total amount so payable is less than 50 percent of the market value of the real property (including any improvements thereon) and constitutes a lien on such property.

(d) An obligation issued, assumed or guaranteed by a corporation, if the corporation is solvent, has not been in default on any of its obligations during the preceding three years, and if the obligation is secured by the pledge of property the market value of which exceeds the amount of the obligation by 25 percent or more. Obligations which are the subject of OAR 410-141-5105 and OAR 410-141-5110 are not included within the provisions of this subsection.

(e) An obligation otherwise found to be amply secured by the Authority. In making such determinations, the Authority shall give consideration to model laws, model regulations and other statutory accounting guidance pertaining to amply secured obligations issued from time to time by the NAIC, and shall consider the financial condition of the issuing, assuming or guaranteeing corporation as well as the existence or absence of any pledge of property as security.

(2) "Corporation" means a corporation, joint stock association or business trust organized and existing under the laws of a sovereign.

(3) "Improved real property" means:

(a) Farmland used for tillage, crop or pasture;

(b) Real estate on which permanent improvements, or improvements under construction or in process of construction, suitable for residence, institutional, commercial or industrial use, are situated; and

(c) Real estate to be developed for the use or uses set forth in subsection (2) of this section on which improvements, or improvements under construction or in process of construction, such as streets, sidewalks, sewers and utilities which will become an integral part of such development, are situated.

(4) "Obligation" means a bond, debenture, note, warrant, certificate or other evidence of indebtedness.

(5) "Political subdivision" means an incorporated county, city, town, village, municipality, or subdivision thereof, or a public corporation, district, agency, commission, authority or instrumentality, or subdivision thereof.

(6) "Sovereign" means the United States, or a state, or Canada or a province thereof.

(7) "Unencumbered" means the nonexistence of any lien, burden or charge having priority over the lien securing the CCO's investment. The following shall not be considered encumbrances on real property or leasehold interests therein:

(a) Reservations of mineral, oil or timber rights, easements, rights of way, sewer rights or rights of walls.

(b) Liens for taxes or assessments not delinquent.

(c) Building restrictions or other restrictive covenants common to the community.

(d) Where the loan is secured by a lien upon real property, a lease under which rents or profits are reserved to the owner, if in any event the security for the loan would be a first lien upon the real property except for such lease.

(e) Where the loan is secured by a lien on a leasehold, a prior lien on the real property, provided the security for the loan is a first lien upon the leasehold and there exists no provision preventing the CCO from continuing the lease in force for the duration of the lease or no condition or rights of reentry or forfeiture under which such lien can be cut off, subordinated or otherwise disturbed so long as the lessee's obligations under the lease are discharged.

Or. Admin. R. 410-141-5085

DMAP 58-2019, adopt filed 12/18/2019, effective 1/1/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685