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LITTLE CANADA FIREMEN'S RELIEF ASSOCIATION <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1994 <br />Page 3 of 8 <br />B. INVESTMENTS <br />1. Minnesota Statutes 69.775 and 356A.06 subd. 6 and 7 authorize the Relief Association to invest in the <br />following: <br />A) Governmental bonds, notes, bills, mortgages and other evidences of <br />indebtedness, provided the issue is backed by the full faith and credit of the issuer or the issue is <br />rated among the top four quality rating categories by a nationally recognized rating agency. The <br />obligations in which the Relief Association may invest include guaranteed or insured issues of: <br />1) The United States, its agencies, its instrumentality's, or organizations created and regulated by <br />an act of Congress. <br />2) Canada and its provinces, provided principal and interest is payable in U.S. dollars. <br />3) States and their municipalities, political subdivisions, agencies, or instrumentality's. <br />4) The International Bank for Reconstruction and Development, the Inter - American Development <br />Bank, the Asian Development Bank, the African Development Bank, or any other United <br />States government sponsored organization of which the United States is a member, provided <br />the principal and interest is payable in United States dollars. <br />B) Corporate bonds, notes, debentures, transportation equipment obligations or any <br />other longer term evidences of indebtedness issued or guaranteed by a corporation organized under <br />the laws of the United States or any state thereof or the Dominion of Canada or any provinces <br />thereof if they conform to the following provisions: <br />1) The principal and interest of obligations of corporations incorporated or organized under the <br />laws of the Dominion of Canada or any province thereof must be payable in United States <br />dollars and <br />2) Obligations shall be rated among the top four quality categories by a nationally recognized <br />rating agency. <br />C) Banker's acceptance and deposit notes of United States banks are limited to those issued <br />by banks rated in the highest four quality categories by a nationally recognized rating agency. <br />D) Certificates of deposit are limited to those issued by (A) United States banks and savings <br />institutions that are rated in the highest four quality categories by a nationally recognized rating <br />agency or whose certificates of deposit are fully insured by federal agencies; or (8) credit unions in <br />amounts up to the limit of insurance coverage provided by the National Credit Union <br />Administration. <br />E) Commercial paper issued by United States corporations or their Canadian subsidiaries and rated <br />in the highest two quality categories by a nationally recognized rating agency. <br />F) Mortgage participation or pass through certificates evidencing interests in pools of <br />first mortgages or trust deeds on improved real estate located in the United States where the loan to <br />value ratio for each loan as calculated in accordance with section 61A.28, subdivision 3, does not <br />exceed 80 percent for fully amortizable residential properties and in all other respects meets the <br />requirements of section 6IA.28, subdivision 3. <br />G) Repurchase agreements and reverse repurchase agreements with collateral limited to <br />letters of credit and securities authorized by MS 356A.06, subdivision 7. <br />Page 73 <br />