Section 1402. Minimum capital or minimum surplus to policyholder investments

(a) Before investing its funds in  any  other  investments,  every  domestic insurer shall invest and maintain an amount equal to the
  greater of the minimum capital required by law or the minimum surplus to
  policyholders required to be maintained by  law  for  a  domestic  stock
  corporation  authorized to transact the same kinds of insurance, only in
  investments of the types specified in this  section  which  are  not  in
  default  as  to  principal  or  interest.  Investments  equal  in value,
  determined pursuant to section one thousand  four  hundred  fourteen  of
  this  article,  to  such  amount and of such types shall at all times be
  maintained free and clear from  any  security  interest  other  than  as
  impressed  upon  a  deposit with any government within the United States
  for the security of all policyholders or all policyholders and creditors
  of the insurer or upon trusteed assets held in trust for the security of
  all policyholders and creditors of the insurer.
    (b) Not less than sixty percent of the amount of the required  minimum
  capital  or  surplus  to  policyholder  investments shall consist of the
  types specified in paragraphs one and two hereof:
    (1) Obligations of the United States or of any agency thereof provided
  such agency obligations are guaranteed as to principal and  interest  by
  the United States.
    (2)  Direct  obligations  of  this state or of any county, district or
  municipality thereof.
    (3) Direct obligations of any state of the United States.
    (4) Obligations  secured  by  first  mortgage  loans  which  meet  the
  standards  specified  in paragraph four of subsection (a) of section one
  thousand four hundred four of this article on property located  in  this
  state.