Bill Text: IA HF2405 | 2023-2024 | 90th General Assembly | Enrolled
Bill Title: A bill for an act relating to the investment of funds by life insurance companies and associations. (Formerly HSB 606.) Effective date: 07/01/2024.
Spectrum: Committee Bill
Status: (Passed) 2024-04-10 - Signed by Governor. H.J. 773. [HF2405 Detail]
Download: Iowa-2023-HF2405-Enrolled.html
House
File
2405
-
Enrolled
House
File
2405
AN
ACT
RELATING
TO
THE
INVESTMENT
OF
FUNDS
BY
LIFE
INSURANCE
COMPANIES
AND
ASSOCIATIONS.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
508.33A,
subsection
8,
Code
2024,
is
amended
to
read
as
follows:
8.
The
provisions
of
sections
508.5
,
508.6
,
and
511.8
,
section
521.2,
subsection
4
,
sections
521A.4
and
521A.5
,
and
chapter
521E
shall
not
be
applicable
to
a
limited
purpose
subsidiary
life
insurance
company
organized
pursuant
to
this
section
.
Sec.
2.
Section
511.8,
subsection
1,
paragraphs
f,
o,
and
p,
Code
2024,
are
amended
to
read
as
follows:
f.
“Collateral
loan”
means
an
unconditional
obligation
for
the
payment
of
money
that
is
secured
by
the
pledge
of
any
assets
or
investments
permitted
under
this
section
.
A
collateral
loan
cannot
be
a
mortgage
loan,
rated
credit
instrument,
or
other
debt
security
as
defined
in
this
subsection
.
o.
“Lower
grade
investment”
means
a
rated
credit
instrument
that
is
designated
4,
5,
or
6
by
the
SVO.
p.
“Medium
grade
investment”
means
a
rated
credit
instrument
that
is
designated
3
by
the
SVO.
House
File
2405,
p.
2
Sec.
3.
Section
511.8,
subsection
1,
Code
2024,
is
amended
by
adding
the
following
new
paragraph:
NEW
PARAGRAPH
.
0h.
“Credit
instrument”
means
an
investment
that
is
qualified
as
a
bond
under
the
accounting
practices
and
procedures
manual,
such
as
evidence
of
indebtedness
of
a
governmental
unit
or
the
instrumentality
of
the
governmental
unit,
or
of
a
private
business
entity.
“Credit
instrument”
includes
asset-backed
securities,
bank
loans,
and
SVO-listed
funds
that
have
an
SVO
designation,
and
that
qualify
as
a
bond
under
the
manual.
Sec.
4.
Section
511.8,
subsection
1,
paragraph
v,
Code
2024,
is
amended
by
striking
the
paragraph.
Sec.
5.
Section
511.8,
subsection
9,
Code
2024,
is
amended
to
read
as
follows:
9.
Rated
credit
Credit
instruments
and
short-term
investments.
An
insurer
may
acquire
the
following
rated
credit
instruments
and
short-term
investments
subject
to
all
of
the
following:
a.
The
following
credit
instruments
acquired
under
this
subsection
shall
be
subject
to
subsection
6
,
paragraphs
“b”
and
“c”
,
and
to
subsection
7
,
but
shall
not
be
subject
to
subsection
6,
paragraph
“a”
:
(1)
Credit
instruments
issued,
assumed,
guaranteed,
or
insured
by
the
United
States
or
Canada.
(2)
Credit
instruments
issued,
assumed,
guaranteed,
or
insured
by
a
government-sponsored
enterprise
of
the
United
States
or
Canada,
if
the
credit
instruments
are
assumed,
guaranteed,
or
insured
by
the
United
States
or
Canada,
or
are
otherwise
backed
or
supported
by
the
full
faith
and
credit
of
the
United
States
or
Canada.
(3)
Credit
instruments,
excluding
asset-backed
securities
that
are
any
of
the
following:
(a)
Issued,
assumed,
guaranteed,
or
insured
by
a
government-sponsored
enterprise
of
a
government
other
than
the
United
States
or
Canada.
(b)
Issued,
assumed,
guaranteed,
or
insured
by
a
state,
if
the
instruments
are
general
obligations
of
the
state.
b.
Short-term
investments
acquired
under
this
subsection
shall
be
subject
to
subsection
6
.
House
File
2405,
p.
3
c.
All
other
rated
credit
instruments
acquired
under
this
subsection
shall
be
subject
to
subsections
6
and
7
.
d.
Foreign
investments
acquired
under
this
subsection
shall
be
subject
to
subsection
15
.
Sec.
6.
Section
511.8,
subsection
10,
paragraph
a,
Code
2024,
is
amended
to
read
as
follows:
a.
(1)
An
insurer
shall
not
acquire
an
investment
under
this
subsection
,
if,
as
a
result
of
and
after
giving
effect
to
the
investment
the
aggregate
amount
of
investments
then
held
by
the
insurer
will
exceed
ten
percent
of
the
insurer’s
admitted
assets.
(2)
Notwithstanding
subparagraph
(1),
an
insurer
that
files
an
annual
statement
pursuant
to
section
508.11
and
completes
the
NAIC’s
health
statement
test
shall
not
acquire
an
investment
under
this
subsection,
if,
as
a
result
of
and
after
giving
effect
to
the
investment,
the
aggregate
amount
of
investments
then
held
by
the
insurer
will
exceed
twenty-five
percent
of
the
insurer’s
admitted
assets.
Sec.
7.
Section
511.8,
subsection
12,
paragraph
a,
unnumbered
paragraph
1,
Code
2024,
is
amended
to
read
as
follows:
An
insurer
may
acquire
obligations
secured
by
a
mortgage
or
deed
of
trust
that
is
a
first
or
second
lien
upon
otherwise
unencumbered
real
estate,
or
upon
leasehold
estates
in
real
property
if
fifty
years
or
more
of
the
term
including
renewals
is
unexpired,
or
other
similar
instruments,
including
mezzanine
loans
,
either
directly
or
through
a
business
entity
where
the
business
entity’s
sole
purpose
is
to
hold
mortgages
that
qualify
for
investment
under
this
subsection,
provided
all
of
the
following
apply:
Sec.
8.
Section
511.8,
subsection
13,
Code
2024,
is
amended
to
read
as
follows:
13.
Real
estate.
a.
An
insurer
may
acquire
real
estate
either
directly
or
through
certificates
evidencing
participation
with
other
investors.
a.
b.
An
insurer
may
acquire
real
estate
required
for
the
insurer’s
home
offices,
or
to
be
otherwise
occupied
by
the
insurer
or
the
insurer’s
employees
in
transacting
the
insurer’s
House
File
2405,
p.
4
business,
and
the
insurer
may
lease
any
unused
space
to
other
occupants.
The
value
of
an
insurer’s
investments
under
this
paragraph
shall
not
exceed
ten
percent
of
the
insurer’s
admitted
assets.
b.
c.
Excluding
investments
under
paragraph
“a”
“b”
,
an
insurer’s
investments
under
this
subsection
shall
not
exceed
fifteen
percent
of
the
insurer’s
admitted
assets.
c.
d.
An
insurer’s
aggregate
investments
under
this
subsection
and
subsection
12
shall
not
exceed
forty-five
percent
of
the
insurer’s
admitted
assets.
Sec.
9.
Section
511.8,
subsection
19,
Code
2024,
is
amended
to
read
as
follows:
19.
Collateral
loans
and
other
debt
securities
secured
by
collateral.
An
insurer
may
acquire
collateral
loans
or
other
debt
securities
secured
by
collateral
consisting
of
any
assets
or
investments
permitted
under
this
section
,
provided
that
the
amount
of
the
loan
is
not
in
excess
of
ninety
percent
of
the
value
of
the
collateral
at
the
time
of
acquisition
.
For
the
purpose
of
determining
compliance
with
the
quantitative
limits
in
this
subsection
section
,
the
collateral
pledged
to
the
insurer
shall
be
aggregated
with
the
insurer’s
direct
investments.
Sec.
10.
REPEAL.
Section
508.6,
Code
2024,
is
repealed.
______________________________
PAT
GRASSLEY
Speaker
of
the
House
______________________________
AMY
SINCLAIR
President
of
the
Senate
I
hereby
certify
that
this
bill
originated
in
the
House
and
is
known
as
House
File
2405,
Ninetieth
General
Assembly.
______________________________
MEGHAN
NELSON
Chief
Clerk
of
the
House
Approved
_______________,
2024
______________________________
KIM
REYNOLDS
Governor
