CA Ins Code Section 1170

Domestic incorporated insurers may invest their assets in the purchase of any of the securities specified in this article, or in loans upon such securities, if those purchases or loans conform to all the following conditions:

(a)

Such securities are not in default as to principal or interest at the date of investment.

(b)

In the case of a purchase, the purchase price does not exceed the market value of the securities at the date of investment.

(c)

In the case of a loan not governed by the provisions of Section 1194.81, the amount loaned does not exceed eighty-five per cent of such market value at the date of investment.