HB 193 -- INSURANCE COMPANY INVESTMENTS (Auer)

This bill allows insurance companies, in meeting minimum capital
requirements, to invest in investment pools that meet the bill's
qualifications.  Qualified investment pools include, among
others, those that invest only in obligations that are rated one
or two by the Securities Valuation Office of the National
Association of Insurance Commissioners and those that invest
only in government money market mutual funds.  The bill
prohibits a qualified investment pool from acquiring securities
issued by the insurer, incurring an indebtedness for borrowed
money unless certain exceptions apply, and investing more than
10% of its total assets in one business.

This bill also requires a company issuing life insurance, health
insurance, or annuities to non-profit educational, religious, or
charitable institutions in Missouri to obtain a certificate of
authority from the Department of Insurance if that company is
subject to guarantee fund assessments in its state of domicile.

FISCAL NOTE:  Net Cost to Insurance Dedicated Fund of $40,500
for FY 1998, $39,925 for FY 1999, and $40,935 for FY 2000.

HB 193 -- INSURANCE COMPANY INVESTMENTS

SPONSOR:  Auer

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
by a vote of 16 to 0.

This bill allows insurance companies, in meeting minimum capital
requirements, to invest in investment pools that meet the bill's
qualifications.  Qualified investment pools include, among
others, those that invest only in obligations that are rated one
or two by the Securities Valuation Office of the National
Association of Insurance Commissioners and those that invest
only in government money market mutual funds.  The bill
prohibits a qualified investment pool from acquiring securities
issued by the insurer, incurring an indebtedness for borrowed
money unless certain exceptions apply, and investing more than
10% of its total assets in one business.

FISCAL NOTE:  Net Cost to Insurance Dedicated Fund is $40,550
for FY 1998, $39,925 for FY 1999, and $40,935 for FY 2000.

PROPONENTS:  Supporters say that this bill is based upon model
legislation from the National Association of Insurance
Commissioners.  The bill would allow insurers to pool their
surplus funds and benefit from higher rates of returns on their
investments.

Testifying for the bill were Representative Auer; American
Insurance Association; Missouri Insurance Coalition; and
Department of Insurance.

OPPONENTS:  There was no opposition voiced to the committee.

Martin Romitti, Research Analyst

HB 193 -- Insurance Company Investments

Sponsor:  Auer

This bill allows insurance companies, in meeting minimum capital
requirements, to invest in investment pools that meet the bill's
qualifications.  Qualified investment pools include, among
others, those that invest only in obligations that are rated one
or two by the Securities Valuation Office of the National
Association of Insurance Commissioners and those that invest
only in government money market mutual funds.  The bill
prohibits a qualified investment pool from acquiring securities
issued by the insurer, incurring an indebtedness for borrowed
money unless certain exceptions apply, and investing more than
10% of its total assets in one business.