SCS/HB 193 - This act makes several changes pertaining to insurance company regulation.

ACQUISITIONS - Certain insurance companies are exempted from the statutory requirement for approval of any acquisition or disposition of any other insurance company. The exemption applies for a simple insurance company if the consideration does not exceed 3% of the assets of the company or 10% of the capital and surplus, whichever is less. For an insurance holding company, the exemption applies if the consideration does not exceed 3% of the consolidated assets or 20% of the consolidated stockholders' equity, whichever is less.

INSURANCE REHABILITATORS, LIQUIDATORS - No blood relative shall be employed by an insurance rehabilitator or liquidator. Court approval is required for legal actions by rehabilitators. Only the Attorney General may appeal cases. No special deputy liquidator shall have been the special deputy rehabilitator for the same insurer. The State Auditor shall annually audit the accounts of all liquidators.

The liquidator may not use estimated losses or outstanding reserves to compel payment of contingent liabilities from a reinsurer. This is similar to HB 449.

INVESTMENT POOLS - Insurance companies are allowed to invest certain percentages of their capital reserve and surplus in investment pools. The rules for life insurers differ somewhat from those for property and casualty insurers.

Life insurers may invest up to 30% of their assets in all investment pools, with no limit in individual pools. Property and casualty insurers are limited to 3 investment pools, 10% of their assets in any one pool, and 30% of their assets in all pools. There are a few other differences between the types of insurers, such as reverse repurchase transactions, the percentage of the pool that may come from one insurer (10% max. in P&C)

Investment pools may invest only in the ways authorized for the insurers. An investment pool may not acquire securities issued by the insurer nor lend money to insurers in the pool. Certain types of borrowing transactions are allowed by the pools. Requirements are imposed for investment pool managers, detailed accounting records and pooling agreements. Pooling agreements shall have the prior approval of the Department of Insurance. The investment pool language is the same as that in SCS/HB 793.
MICHAEL HOEFERKAMP