BILL ANALYSIS |
C.S.S.B. 841 |
By: Hancock |
Insurance |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Under current law, insurance companies in Texas are prohibited from investing in residential real estate. Interested parties contend that this prohibition is inconsistent with many other states' policies on real estate investment as well as with certain model legislation. These parties further note that a recent report by the Texas Department of Insurance identified granting additional investment authority to the largest, most financially stable insurers as a way of attracting more insurance companies to Texas. C.S.S.B. 841 seeks to expand certain insurers' investment authority.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.S.B. 841 amends the Insurance Code to exempt any insurer organized under state law, other than an insurer writing life, health, and accident insurance, from the prohibition against an insurer owning, developing, or holding an equity interest in any residential property or subdivision, single or multiunit family dwelling property, or undeveloped real property to subdivide for or develop residential, single or multiunit family dwellings if the insurer has admitted assets of $10 billion or more. The bill clarifies such an insurer's authorization to invest the insurer's funds in excess of minimum capital and surplus in a foreign commonwealth, territory, or possession of the United States or a foreign country other than Canada or to invest in debt obligations and investments within one of those commonwealths, territories, possessions, or countries as well as in a foreign security originating in one of those commonwealths, territories, possessions, or countries. The bill caps the aggregate amount of an insurer's debt obligations or investments within a single foreign jurisdiction, as to a debt obligation or investment within a foreign jurisdiction that is rated one or two by the securities valuation office, at 10 percent of the insurer's admitted assets and clarifies that the limitations on the investments apply to both foreign jurisdictions and foreign securities.
C.S.S.B. 841 exempts a capital stock life, health, or accident insurer from the prohibition against an insurer owning, developing, or holding an equity interest in any residential property or subdivision, single or multiunit family dwelling property, or undeveloped real property to subdivide for or develop residential, single or multiunit family dwellings if the insurer has admitted assets of $10 billion or more, as determined from the insurer's annual statements that are made as of December 31 that precedes the date of the determination and are filed with the Texas Department of Insurance as required by law.
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EFFECTIVE DATE
September 1, 2013.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.S.B. 841 may differ from the engrossed version in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the engrossed and committee substitute versions of the bill.
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