PUBLIC LAWS-CH. 503 -JUNE 19,1948 thereof, or the District of Columbia, or the Dominion of Canada or Restriction. any province thereof: Provided, That (1) no company shall invest an amount in excess of 2 per centum of its admitted assets in any one issue of such obligations of any one corporation; (2) the net earnings of the issuing corporation available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by such insurance company shall have averaged yearly, and during the last year of said five-year period shall have been not less than one and one-half times its annual fixed charges at the time of the investment, or, if a new issue, as shown by the pro forma statement of the corpora- tion; and (3) there shall have been no defaults in interest thereon, or on any such obligations of such corporation which are of equal or higher priority with those purchased, during the period of five years next preceding the date of acquisition, or, if outstanding for less than ab"et eearingsavatil. five years, at any time since said obligations were issued. The term 'net earnings available for fixed charges', as used herein, shall mean the net income after deducting all operating and maintenance expenses and taxes other than Federal, State, and District of Columbia income taxes, but nonrecurring items of income and expense may be eliminated. "Fixed charges." The term 'fixed charges' as used herein shall include interest on all of the fixed interest-bearing debt of the corporation outstanding and maturing in more than one year, as of the date of acquisition, and in case of investment in contingent interest obligations, said term shall also include maximum annual contingent interest as of said date. The earnings of all predecessor, merged, consolidated, or purchased companies may be included through the use of consolidated or pro forma statements provided the fixed charges of all such companies are also included. Bills of exchange. "(8) Bank certificates of deposit and bankers' acceptances, and other bills of exchange of the kind and maturities made eligible by ed law for purchase in the open market by Federal Reserve banks. Preferred stock. (9) Preferred stock of any solvent corporation (other than its own) created under the laws of the United States, or of any State thereof, or the District of Columbia, or the Dominion of Canada, or any Province thereof where such corporation has not failed in any one of the three fiscal years next preceding such investment, to have earned a sum applicable to dividends on such preferred stock equal at least to three times the amount of dividends due in that year, or where in case of issuance of new preferred stock such earnings appli- cable to dividends are equal to at least three times the amount of pro forma annual dividend requirements after giving effect to such new financing, and where the bonds and other evidences of indebtedness, if any, of such corporation are eligible as investments under the pro- visions of subsection (7) of this section, and where the total invest- ment in any one issue of such preferred stock of any one corporation does not exceed 1 per centum of the investing company's admitted assets. Common stocks. "(10) Common stocks of any solvent corporation (other than its own) created under the laws of the United States, or of any State thereof, or the District of Columbia, or the Dominion of Canada, or any Province thereof, which shall have paid common dividends in cash for not less than five years next preceding the purchase of such stocks, and where the bonds and other evidences of indebtedness, if any, and the preferred stock, if any, of such corporation are eligible as investments under the provisions of subsections (7) and (9), respectively, of this section, and where the total investment in the common stock of any one corporation does not exceed 1 per centum of the investing company's admitted assets." ans. "(11) Loans upon the pledge of any of the securities aforesaid. 482 [62 STAT.
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