Insurance Code section 1196

Excess funds investments shall not be made in any stock or obligation unless:

(a)

The stock or obligation qualifies as a sound investment.

(b)

In case of a purchase, the price paid for the security is not in excess of the current market value at the date of purchase.

(c)

In case of a loan, the amount loaned does not exceed eighty-five per cent of the market value, at the date of the loan, of the collateral taken as security.

Source: Section 1196, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=INS§ionNum=1196.­ (updated Jan. 1, 1937; accessed Jun. 9, 2025).

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Verified:
Jun. 9, 2025

§ 1196’s source at ca​.gov