Virginia House Bill 1504 (Prior Session Legislation)

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Completed Legislative Action
Spectrum: Partisan Bill (Republican 1-0)
Status: Passed on March 16 2011 - 100% progression
Action: 2011-03-16 - Governor: Acts of Assembly Chapter text (CHAP0198)
Text: Latest bill text (Chaptered) [HTML]

Insurance companies; investments in derivative transactions; exercising qualified financial contracts upon insolvency or delinquency. Establishes conditions under which domestic insurers may engage in transactions involving derivative instruments, including options, warrants, caps, floors, collars, swaps, forwards, and futures. Derivative instruments may be used to engage in hedging transactions and replication transactions provided insurers establish written guidelines for their use and procedures to determine that their transactions comply with such guidelines. The guidelines shall be submitted to the State Corporation Commission (SCC) for prior approval. The SCC may adopt rules and regulations for derivative transactions including financial solvency standards, valuation standards, and reporting requirements. An insurer engaged in hedging transactions shall demonstrate to the SCC the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other analyses. Limits are established on the percentage of assets that may be used in hedging transactions. An insurer's replication transactions are required to comply with limitations on investments by the insurer, and the aggregate statement value of all assets being replicated is limited to 10 percent of the insurer's admitted assets. The measure also provides rules regarding a person's ability to exercise a contractual right to terminate obligations under a netting agreement or qualified financial contract with an insurer because of the insurer's insolvency, financial condition, or default or the commencement of a delinquency proceeding against the insurer. A receiver may not avoid a transfer arising under or in connection with a netting agreement or qualified financial contract that is made before the commencement of a delinquency proceeding unless the transfer was made with actual intent to hinder, delay, or defraud the insurer, a receiver, or creditors. If a receiver disaffirms or repudiates a netting agreement or qualified financial contract within a reasonable period after the commencement of a delinquency proceeding, the claim of a counterparty against the estate arising from the disaffirmance or repudiation shall be allowed or disallowed as if the claim arose before the filing of the petition for liquidation or rehabilitation. The measure also provides that the prohibition on investments by domestic insurers in securities that will subject the insurer to any assessment does not include ordinary contractual payments or the transfer of collateral or margin made under derivative instruments. The measure includes an enactment clause that allows insurers currently investing in derivative instruments to continue doing so after the effective date of this act provided they submit guidelines to the SCC for review by April 1, 2011.

Insurance companies; investments in derivative transactions, etc.

Del. Lee Ware [R]

2011-02-17 - Senate - Senate: Passed Senate (39-Y 0-N) (Y: 39 N: 0 NV: 1 Abs: 0) [PASS]
2011-02-16 - Senate - Senate: Constitutional reading dispensed (40-Y 0-N) (Y: 40 N: 0 NV: 0 Abs: 0) [PASS]
2011-02-14 - Senate - Senate: Reported from Commerce and Labor (15-Y 0-N) (Y: 15 N: 0 NV: 0 Abs: 0) [PASS]
2011-01-24 - House - House: VOTE: BLOCK VOTE PASSAGE (97-Y 0-N) (Y: 99 N: 0 NV: 2 Abs: 0) [PASS]
2011-01-18 - House - House: Reported from Commerce and Labor with amendment (21-Y 0-N) (Y: 21 N: 0 NV: 1 Abs: 0) [PASS]

Date	Chamber	Action
2011-03-16		Governor: Acts of Assembly Chapter text (CHAP0198)
2011-03-16		Governor: Approved by Governor-Chapter 198 (effective 7/1/11)
2011-02-23		Senate: Signed by President
2011-02-23		House: Signed by Speaker
2011-02-23		House: Bill text as passed House and Senate (HB1504ER)
2011-02-23		House: Enrolled
2011-02-17		Senate: Passed Senate (39-Y 0-N)
2011-02-17		Senate: Read third time
2011-02-16		Senate: Constitutional reading dispensed (40-Y 0-N)
2011-02-14		Senate: Reported from Commerce and Labor (15-Y 0-N)
2011-01-25		Senate: Referred to Committee on Commerce and Labor
2011-01-25		Senate: Constitutional reading dispensed
2011-01-24		House: VOTE: BLOCK VOTE PASSAGE (97-Y 0-N)
2011-01-24		House: Read third time and passed House BLOCK VOTE (97-Y 0-N)
2011-01-21		House: Printed as engrossed 11101964D-E
2011-01-21		House: Engrossed by House as amended HB1504E
2011-01-21		House: Committee amendment agreed to
2011-01-21		House: Read second time
2011-01-20		House: Read first time
2011-01-18		House: Reported from Commerce and Labor with amendment (21-Y 0-N)
2010-12-17		House: Referred to Committee on Commerce and Labor
2010-12-17		House: Prefiled and ordered printed; offered 01/12/11 11101964D

Chapter	Article	Section	Citation Type	Statute Text
38	2	1401	(n/a)	See Bill Text
38	2	1407	(n/a)	See Bill Text
38	2	1428	(n/a)	See Bill Text
38	2	1501	(n/a)	See Bill Text
38	2	1522	(n/a)	See Bill Text

Type	Source
Summary	https://lis.virginia.gov/cgi-bin/legp604.exe?111+sum+HB1504
Text	https://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+HB1504+hil
Text	https://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+HB1504E+hil
Text	https://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+HB1504ER+hil
Text	https://lis.virginia.gov/cgi-bin/legp604.exe?111+ful+CHAP0198+hil
Roll Call	https://lis.virginia.gov/cgi-bin/legp604.exe?111+vot+H14V0029+HB1504
Roll Call	https://lis.virginia.gov/cgi-bin/legp604.exe?111+vot+HV0119+HB1504
Roll Call	https://lis.virginia.gov/cgi-bin/legp604.exe?111+vot+S02V0117+HB1504
Roll Call	https://lis.virginia.gov/cgi-bin/legp604.exe?111+vot+SV0446HB1504+HB1504
Roll Call	https://lis.virginia.gov/cgi-bin/legp604.exe?111+vot+SV0488HB1504+HB1504