Virginia § 38.2-1407 - Prohibited investments
Full text of Virginia Code of Virginia § 38.2-1407 — Prohibited investments, with citation guidance and answers to common questions.
§ 38.2-1407. Prohibited investments
A. No domestic insurer shall invest in or loan funds secured by:
1. Issued shares of its own capital stock without the Commission's approval. This approval shall be based on an evaluation that indicates the investment does not adversely affect the insurer or its policyholders. The insurer shall not invest in or own more than 20 percent of its outstanding issued stock, except for the purpose of mutualization;
2. Securities of an insolvent entity;
3. Securities that, by their terms, will subject the insurer to any assessment other than for taxes or for wages; however, the term "assessment" shall not include ordinary contractual payments or the transfer of collateral or margin made under derivative instruments invested in or owned under § 38.2-1428;
4. Investments that, as determined by the Commission, are designed to evade any prohibition of this title; or
5. Any obligation or investment prohibited by § 38.2-1411.2.
B. Notwithstanding the provisions of this chapter, the Commission may order a domestic insurer to limit or withdraw from certain investments, or discontinue certain investment practices, to the extent the Commission finds that such investment or investment practice endangers the solvency of the insurer or is otherwise hazardous to policyholders, creditors or the public in this Commonwealth.
1983, c. 457, § 38.1-217.8; 1986, c. 562; 1992, c. 588; 2011, c. 198.
Source: official Virginia text · Last verified 2026-08-27
Frequently Asked Questions About Virginia § 38.2-1407
What does Code of Virginia § 38.2-1407 cover?
Section 38.2-1407 ("Prohibited investments") is part of the Code of Virginia, the codified statutory law of Virginia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Virginia § 38.2-1407?
A common citation format is "Code of Virginia § 38.2-1407" (Virginia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Virginia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Virginia official source linked on this page or consult a licensed Virginia attorney.
How does Virginia § 38.2-1407 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Virginia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Virginia.