Bill Text: IA SSB3003 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to the legal reserve requirements of life insurance companies.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2020-01-31 - Reported out of committee as SF 2132. [SSB3003 Detail]

Download: Iowa-2019-SSB3003-Introduced.html
Senate Study Bill 3003 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to the legal reserve requirements of life 1 insurance companies. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5230XC (2) 88 ja/rn
S.F. _____ Section 1. Section 511.8, subsection 22, paragraph i, 1 subparagraph (2), Code 2020, is amended to read as follows: 2 (2) Securities pledged as collateral for financial 3 instruments used in highly effective hedging transactions as 4 defined in the national association of insurance commissioners’ 5 statement of statutory accounting principles no. 86 or the 6 national association of insurance commissioners’ statement 7 of statutory accounting principles no. 108 , together with 8 securities pledged to a counterparty, clearing organization, 9 or clearinghouse on an upfront basis in the form of initial 10 margin, independent amount, or other securities pledged as 11 a precondition of entering into highly effective hedging 12 transactions pursuant to subparagraph (1), are not eligible 13 in excess of ten percent of the legal reserve of the life 14 insurance company or association, less any financial 15 instruments used in hedging transactions held in the legal 16 reserve under this subsection and less any securities included 17 under subparagraph (3). 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 Life insurance companies may invest in, among other things, 22 certain financial instruments used in hedging transactions 23 to satisfy their legal reserve requirements. A maximum of 24 10 percent of a life insurance company’s legal reserve may 25 be held in the form of securities pledged as collateral in 26 highly effective hedging transactions. Currently, the term 27 “highly effective hedging transaction” is defined in Code 28 section 511.8 by reference to the definition contained in the 29 national association of insurance commissioners’ statement of 30 statutory accounting principles no. 86. This bill modifies 31 the definition of “highly effective hedging transaction” 32 to also include the definition of highly effective hedging 33 transaction contained in the national association of insurance 34 commissioners’ statement of statutory account principles no. 35 -1- LSB 5230XC (2) 88 ja/rn 1/ 2
S.F. _____ 108. 1 -2- LSB 5230XC (2) 88 ja/rn 2/ 2
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