[54 STAT. For the purpose of this subsection (a), no certificate of the install- ment type shall be deemed to be outstanding if before a surrender value has been attained the holder thereof has been in continuous default in making his payments thereon for a period of one year. Minimum assets. (b) It shall be unlawful for any registered face-amount certificate company to issue or sell any face-amount certificate, or to collect or accept any payment on any such certificate issued by such company on or after the effective date of this title, unless such company has, in cash or qualified investments, assets having a value not less than the aggregate amount of the capital stock requirement and certifi- cate reserves as computed under the provisions of subsection (a) n"ualified invest- hereof. As used in this subsection, "qualified investments" means ments" deined. investments of a kind which life-insurance companies are permitted to invest in or hold under the provisions of the Code of the District of Columbia as heretofore or hereafter amended, and such other investments as the Commission shall by rule, regulation, or order authorize as qualified investments. Such investments shall be valued in accordance with the provisions of said Code where such provi- sions are applicable. Investments to which such provisions do not apply shall be valued in accordance with such rules, regulations, or orders as the Commission shall prescribe for the protection of investors. Deposit and main (c) The Commission shall by rule, regulation, or order, in the investments. public interest or for the protection of investors, require a registered face-amount certificate company to deposit and maintain, upon such terms and conditions as the Commission shall prescribe and as are appropriate for the protection of investors, with one or more insti- tutions having the qualifications required by paragraph (1) of sec- tion 26 (a) for a trustee of a unit investment trust, all or any part of the investments maintained by such company as certificate reserve proviso. requirements under the provisions of subsection (b) hereof: Pro- Deductions. vided, hozever, That where qualified investments are maintained on deposit by such company in respect of its liabilities under certificates issued to or held by residents of any State as required by the statute of such State or by any order regulation, or requirement of such State or any official or agency thereof, the amount so on deposit, but not to exceed the amount of reserves required by subsection (a) hereof for the certificates so issued or held, shall be deducted from the amount of qualified investments that may be required to be deposited hereunder. Assets which are qualified investments under subsection (b) and which are deposited under or as permitted by this subsection (c) may be used and shall be considered as a part of the assets required to be maintained under the provisions of said subsection (b). csant; collecti'n of (d) It shall be unlawful for any registered face-amount certificate payments. company to issue or sell any face-amount certificate, or to collect or accept any payment on any such certificate issued by such company on or after the effective date of this title, unless such certificate con- tains a provision or provisions to the effect- duringfirstcertificatle 1) that, in respect of any certificate of the installment type, year. during the first certificate year the holder of the certificate, upon surrender thereof, shall be entitled to a value payable in cash not less than the reserve payments as specified in subparagraph (A) or (B) of paragraph (2) of subsection (a) and at the end of such certificate year, a value payable in cash at least equal to 50 per centum of the amount of the gross annual payment required thereby for such year; first certificate ear. (2) that, in respect of any certificate of the installment type, at any time after the expiration of the first certificate year and PUBLIC LAWS-CH. 686- -AUG. 22 , 1940 832
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