Bill Text: TX SB1502 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the authority of certain insurers to make investments in bond exchange-traded funds.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-04-09 - Left pending in committee [SB1502 Detail]
Download: Texas-2019-SB1502-Introduced.html
| 86R6054 JES-F | ||
| By: Creighton | S.B. No. 1502 | |
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| relating to the authority of certain insurers to make investments | ||
| in bond exchange-traded funds. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Subchapter B, Chapter 424, Insurance Code, is | ||
| amended by adding Section 424.075 to read as follows: | ||
| Sec. 424.075. AUTHORIZED INVESTMENTS: BOND EXCHANGE-TRADED | ||
| FUNDS. (a) An insurer may invest the insurer's funds in excess of | ||
| minimum capital and surplus in shares of a bond exchange-traded | ||
| fund registered under the Investment Company Act of 1940 (15 U.S.C. | ||
| Section 80a-1 et seq.), as amended, if: | ||
| (1) the exchange-traded fund is solvent and reported | ||
| at least $1 million of net assets in the exchange-traded fund's | ||
| latest annual or more recent certified audited financial statement; | ||
| (2) the securities valuation office has designated the | ||
| exchange-traded fund as meeting the criteria to be placed on the | ||
| list promulgated by the securities valuation office of | ||
| exchange-traded funds eligible for reporting as a statutory | ||
| long-term bond obligation on Internal Revenue Service Form 1040, | ||
| Schedule D; and | ||
| (3) the amount of the insurer's investment in the | ||
| exchange-traded fund does not exceed 15 percent of the insurer's | ||
| capital and surplus. | ||
| (b) An insurer may deposit with the department shares of a | ||
| bond exchange-traded fund described by Subsection (a) as a | ||
| statutory deposit if state law requires a statutory deposit from | ||
| the insurer. | ||
| SECTION 2. Subchapter C, Chapter 425, Insurance Code, is | ||
| amended by adding Section 425.1231 to read as follows: | ||
| Sec. 425.1231. AUTHORIZED INVESTMENTS: BOND | ||
| EXCHANGE-TRADED FUNDS. (a) An insurance company may invest the | ||
| insurer's funds in excess of minimum capital and surplus in shares | ||
| of a bond exchange-traded fund registered under the Investment | ||
| Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended, | ||
| if: | ||
| (1) the exchange-traded fund is solvent and reported | ||
| at least $1 million of net assets in the exchange-traded fund's | ||
| latest annual or more recent certified audited financial statement; | ||
| (2) the securities valuation office has designated the | ||
| exchange-traded fund as meeting the criteria to be placed on the | ||
| list promulgated by the securities valuation office of | ||
| exchange-traded funds eligible for reporting as a statutory | ||
| long-term bond obligation on Internal Revenue Service Form 1040, | ||
| Schedule D; and | ||
| (3) the amount of the insurance company's investment | ||
| in the exchange-traded fund does not exceed the investment amount | ||
| limit in Section 425.157(b). | ||
| (b) An insurance company may deposit with the department | ||
| shares of a bond exchange-traded fund described by Subsection (a) | ||
| as a statutory deposit if state law requires a statutory deposit | ||
| from the insurance company. | ||
| (c) A bond exchange-traded fund described by Subsection (a) | ||
| shall be considered a business entity for purposes of Section | ||
| 425.110. | ||
| SECTION 3. This Act takes effect September 1, 2019. | ||
