HRS §431:6-318
Rules for loans backed by collateral
This section lets an insurance company lend its money if the loan is secured by certain investments or debts it is allowed to hold. The loan amount is limited based on the value of the collateral, with special rules for U.S. government bonds and life insurance policies. The loan counts toward the company's overall investment limits.
The statute, as written — Collateral loans
An insurer is permitted to loan its funds upon the pledge of securities or evidences of debt eligible for investment under this article. As at date made, no such loan shall exceed in amount ninety per cent of the fair value of the collateral pledged, except that loans upon pledge of United States government bonds may be equal to the fair value of the bonds pledged and that loans on life insurance policies may equal the cash surrender value of the policy as provided in section 431:6-314. The amount so loaned shall be included in the maximum percentage of funds permitted to be invested in the kinds of securities for evidences of debt pledged or permitted by section 431:6-105.
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