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A BILL TO BE ENTITLED
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AN ACT
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relating to certain authorized investments under the Insurance |
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Code. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 424.064(b), Insurance Code, is amended |
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to read as follows: |
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(b) An insurer with admitted assets of more than $500 |
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million may individually or in conjunction with other investors |
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acquire, own, hold, develop, and improve real property that is |
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essentially residential or commercial in character, even though the |
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property is subject to an existing mortgage or the insurer |
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subsequently mortgages the property. An investment in [investment
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real property other than real property authorized by another
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provision of this code, or participations in that other investment] |
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real property is authorized [,] if the property is materially |
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enhanced in value by: |
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(1) the construction of durable, permanent-type |
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buildings and other improvements that cost an amount at least equal |
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to the cost of the real property, excluding buildings and |
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improvements at the time the property is acquired; or |
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(2) the construction, commenced before the second |
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anniversary of the date the real property is acquired, of buildings |
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and improvements described by Subdivision (1). |
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SECTION 2. Section 424.068, Insurance Code, is amended to |
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read as follows: |
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Sec. 424.068. AUTHORIZED INVESTMENTS: INVESTMENT IN |
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FOREIGN JURISDICTION. (a) In addition to the investments in Canada |
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authorized by Sections 424.051, 424.058-424.071, and 424.074 and |
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subject to this section, an insurer may make investments within |
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another [invest the insurer's funds in excess of minimum capital
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and surplus in an investment in a] foreign country or a |
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commonwealth, territory, or possession of the United States[, a
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foreign country other than Canada, or a foreign security
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originating in one of those commonwealths, territories,
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possessions, or countries, if:
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[(1)
the investment is similar to investments the
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insurer is authorized by Sections 424.051, 424.058-424.071, and
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424.074 to make within the United States or Canada; and
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[(2)
if a debt obligation, the investment is rated one
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or two by the securities valuation office]. |
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(b) An investment made under this section must be |
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substantially the same type as an investment authorized to be made |
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within the United States or Canada by this subchapter. [The
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aggregate amount of an insurer's investments under Sections
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424.051, 424.058-424.071, and 424.074 in a single foreign
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jurisdiction may not exceed:
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[(1)
as to a foreign jurisdiction that is given a
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sovereign debt rating of one by the securities valuation office, 10
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percent of the insurer's admitted assets; or
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[(2)
as to any other foreign jurisdiction, five
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percent of the insurer's admitted assets.] |
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(c) The sum of the amount of investments made under this |
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section and the amount of similar investments made within the |
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United States and Canada may not exceed any limitation imposed by |
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Sections 424.051, 424.058-424.071, and 424.074 [the sum of:
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[(1) the amounts authorized by Section 424.073; and
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[(2) 20 percent of the insurer's assets]. |
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(d) The aggregate [combined total of the] amount of an |
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insurer's investments [made] under this section[, the amount of
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similar investments made within the United States and Canada, and
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any amounts of investments authorized by Section 424.073] may not |
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exceed the sum of: |
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(1) the amount of the insurer's reserves attributable |
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to insurance business in force in foreign countries, if any, and any |
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additional investments required by a foreign country as a condition |
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of engaging in business in that country; and |
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(2) 20 percent of the insurer's assets [any limitation
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prescribed by Sections 424.051, 424.058-424.071, and 424.074]. |
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(e) An insurer may not invest more than 10 percent of the |
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insurer's assets in investments denominated in foreign currency |
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that are not hedged under Subchapter E. |
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SECTION 3. Section 425.119(f), Insurance Code, is amended |
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to read as follows: |
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(f) In addition to an investment authorized by [Except as
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provided by] Subsection (g), an insurance company may individually |
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or in conjunction with other investors acquire, [not] own, hold, |
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develop, and improve real property that is essentially residential |
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or commercial in character, even though the property is subject to |
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an existing mortgage or the insurance company subsequently |
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mortgages the property [or hold an equity interest in any
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residential property or subdivision, single or multiunit family
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dwelling property, or undeveloped real property to subdivide for or
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develop residential or single or multiunit family dwellings]. |
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SECTION 4. Section 424.064(d), Insurance Code, is repealed. |
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SECTION 5. This Act takes effect September 1, 2013. |