Public Act 098-0823
 
SB2662 EnrolledLRB098 15962 RPM 51012 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Farm Mutual Insurance Company Act of 1986 is
amended by changing Section 12 as follows:
 
    (215 ILCS 120/12)  (from Ch. 73, par. 1262)
    Sec. 12. Investments. Without the prior approval of the
Director, the funds of any company operating under or regulated
by the provisions of this Act, shall be invested only in the
following:
        (1) Direct obligations of the United States of America,
    or obligations of agencies or instrumentalities of the
    United States to the extent guaranteed or insured as to the
    payment of principal and interest by the United States of
    America;
        (2) Bonds which are direct, general obligations of the
    State of Illinois or any other state, subject to a maximum
    of 30% of admitted assets in states other than Illinois in
    the aggregate;
        (3) Bonds which are direct, general obligations of
    political subdivisions of the State of Illinois or any
    other state, subject to the following conditions:
            (a) Maximum of 5% of admitted assets in any one
        political subdivision;
            (b) Maximum of 30% of admitted assets in all
        political subdivisions in the aggregate;
            (c) Rating of A3 or higher by Moody's Investors
        Service, Inc. or A- or higher by Standard & Poor's
        Corporation;
        (4) Bonds, notes, debentures, or other similar
    obligations of the United States of America, its agencies,
    and its instrumentalities, subject to a maximum investment
    of 10% of admitted assets in any one issuer Bonds that are
    obligations of the Federal National Mortgage Association
    subject to a maximum investment of 10% of admitted assets
    in the aggregate;
        (5) Bonds that are obligations of corporations
    organized by the United States of America, subject to the
    following conditions:
            (a) Maximum of 5% of admitted assets in any one
        issuer;
            (b) Maximum of 15% of admitted assets in the
        aggregate;
            (c) Rating of A3 or higher by Moody's Investors
        Service, Inc. or A- or higher by Standard & Poor's
        Corporation;
            (d) Maximum maturity of no longer that 10 years the
        Federal Home Loan Mortgage Corporation subject to a
        maximum investment of 10% of admitted assets in the
        aggregate;
        (6) Mutual funds, unit investment trusts, and exchange
    traded funds, subject to the following conditions:
            (a) Maximum of 6% 3% of policyholders' surplus in
        any one balanced or growth mutual fund that invests in
        common stock;
            (b) Maximum of 5% of admitted assets in any one
        bond or income mutual fund or any one non-governmental
        money market mutual fund;
            (c) Maximum of 10% of admitted assets in any one
        governmental money market mutual fund;
            (d) Maximum of 25% of admitted assets in all mutual
            funds in the aggregate;
        (7) Common stock and preferred stock subject to the
    following conditions:
            (a) Common stock and preferred stock shall be
        traded on the New York Stock Exchange or the American
        Stock Exchange or listed on the National Association of
        Securities Dealers Automated Quotation (NASDAQ)
        system;
            (b) Maximum of 3% of policyholders' surplus in
        excess of $400,000 in any one common stock or preferred
        stock issuer provided that the net unearned premium
        reserve does not exceed policyholders' surplus;
        (8) Investments authorized under subdivision (a) of
    item (6) and subdivision (a) of item (7) of this Section
    shall not in the aggregate exceed 15% 10% of policyholders'
    surplus;
        (9) Funds on deposit in solvent banks and savings and
    loan associations which are insured by the Federal Deposit
    Insurance Corporation; however, the uninsured portion of
    funds held in any one such bank or association shall not
    exceed 5% of the company's policyholders' surplus;
        (10) Real estate for home office building purposes,
    provided that such investments are approved by the Director
    of Insurance on the basis of a showing by the company that
    the company has adequate assets available for such
    investment and that the proposed acquisition does not
    exceed the reasonable normal value of such property; .
        (11) Amounts in excess of the investment limitations
    contained in items (2) through (9) may be allowed, subject
    to the following conditions:
            (a) Maximum additional investment of 3% of
        admitted assets in any one issuer;
            (b) Maximum additional investment of 6% of
        admitted assets in the aggregate.
    An investment that qualified under this Section at the time
it was acquired by the company shall continue to qualify under
this Section.
    Investments permitted under this Section shall be
registered in the name of the company and under its direct
control or shall be held in a custodial account with a bank or
trust company that is qualified to administer trusts in
Illinois under the Corporate Fiduciary Act and that has an
office in Illinois. However, securities may be held in street
form and in the custody of a licensed dealer for a period not
to exceed 30 days.
    Notwithstanding the provisions of this Act, the Director
may, after notice and hearing, order a company to limit or
withdraw from certain investments or discontinue certain
investments or investment practices to the extent the Director
finds those investments or investment practices endanger the
solvency of the company.
(Source: P.A. 90-794, eff. 1-1-99.)