Full Text of SB2662 98th General Assembly
SB2662 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 SB2662 Introduced 1/21/2014, by Sen. William R. Haine SYNOPSIS AS INTRODUCED: |
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215 ILCS 120/12 | from Ch. 73, par. 1262 |
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Amends the Farm Mutual Insurance Company Act of 1986. Makes changes with regard to the types of financial instruments that the funds of a company operating under or
regulated by the provisions of the Act may be invested in without the prior approval of the Director of Insurance.
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Farm Mutual Insurance Company Act of 1986 is | 5 | | amended by changing Section 12 as follows:
| 6 | | (215 ILCS 120/12) (from Ch. 73, par. 1262)
| 7 | | Sec. 12. Investments. Without the prior approval of the | 8 | | Director, the
funds of any company operating under or
regulated | 9 | | by the provisions of this Act, shall be invested only in the
| 10 | | following:
| 11 | | (1) Direct obligations of the United States of America, | 12 | | or obligations
of agencies or instrumentalities of the | 13 | | United States to the extent
guaranteed or insured as to the | 14 | | payment of principal and interest by the
United States of | 15 | | America;
| 16 | | (2) Bonds which are direct, general obligations of the | 17 | | State of Illinois or any other state, subject to a maximum | 18 | | of 30% of admitted assets in states other than Illinois in | 19 | | the aggregate ;
| 20 | | (3) Bonds which are direct, general obligations of | 21 | | political
subdivisions of the State of Illinois or any | 22 | | other state , subject to the following conditions:
| 23 | | (a) Maximum of 5% of admitted assets in any one |
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| 1 | | political subdivision;
| 2 | | (b) Maximum of 30% of admitted assets in all | 3 | | political
subdivisions in
the aggregate;
| 4 | | (c) Rating of A3 or higher by Moody's Investors | 5 | | Service, Inc. or A- or higher by Standard & Poor's | 6 | | Corporation;
| 7 | | (4) Bonds, notes, debentures, or other similar | 8 | | obligations of the United States of America, its agencies, | 9 | | and its instrumentalities, subject to a maximum investment | 10 | | of 10% of admitted assets in any one entity Bonds that are | 11 | | obligations of the Federal National Mortgage
Association | 12 | | subject to a maximum investment of 10% of admitted assets | 13 | | in the
aggregate ;
| 14 | | (5) Bonds that are obligations of corporations | 15 | | organized by the United States of America, subject to the | 16 | | following conditions: | 17 | | (a) Maximum of 5% of admitted assets in any one | 18 | | entity; | 19 | | (b) Maximum of 15% of admitted assets in the | 20 | | aggregate; | 21 | | (c) Rating of A3 or higher by Moody's Investors | 22 | | Service, Inc. or A- or higher by Standard & Poor's | 23 | | Corporation; | 24 | | (d) Maximum maturity of no longer that 10 years the | 25 | | Federal Home Loan Mortgage
Corporation subject to a | 26 | | maximum investment of 10% of admitted assets in the
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| 1 | | aggregate ;
| 2 | | (6) Mutual funds , unit investment trusts, and exchange | 3 | | traded funds, subject to the following conditions:
| 4 | | (a) Maximum of 6% 3% of policyholders' surplus in | 5 | | any one balanced or
growth mutual fund that invests in | 6 | | common stock;
| 7 | | (b) Maximum of 5% of admitted assets in any one | 8 | | bond or income mutual
fund or any one non-governmental | 9 | | money market mutual fund;
| 10 | | (c) Maximum of 10% of admitted assets in any one | 11 | | governmental money
market mutual fund;
| 12 | | (d) Maximum of 25% of admitted assets in all mutual | 13 | | funds in the
aggregate;
| 14 | | (7) Common stock and preferred stock subject to the | 15 | | following
conditions:
| 16 | | (a) Common stock and preferred stock shall be | 17 | | traded on the New York
Stock Exchange or the American | 18 | | Stock Exchange or listed on the National
Association of | 19 | | Securities Dealers Automated Quotation (NASDAQ) | 20 | | system;
| 21 | | (b) Maximum of 3% of policyholders' surplus in | 22 | | excess of $400,000 in
any one common stock or preferred | 23 | | stock issuer provided that the net unearned
premium | 24 | | reserve does not exceed policyholders' surplus;
| 25 | | (8) Investments authorized under subdivision (a) of | 26 | | item (6) and
subdivision (a) of item (7) of this Section |
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| 1 | | shall not in the
aggregate exceed 15% 10% of policyholders' | 2 | | surplus;
| 3 | | (9) Funds on deposit in solvent banks and savings and | 4 | | loan
associations which are insured by
the Federal Deposit | 5 | | Insurance Corporation; however, the uninsured portion
of | 6 | | funds held in any one such bank or association shall not | 7 | | exceed 5% of
the company's
policyholders' surplus;
| 8 | | (10) Real estate for home office building purposes, | 9 | | provided
that such
investments are approved by the Director | 10 | | of Insurance on the basis of a
showing by the company that | 11 | | the company has adequate assets available for
such | 12 | | investment and that the proposed acquisition does not | 13 | | exceed the
reasonable normal value of such property ; .
| 14 | | (11) Amounts in excess of the investment limitations | 15 | | contained in items (2) through (9) may be allowed, subject | 16 | | to the following conditions: | 17 | | (a) Maximum additional investment of 3% of | 18 | | admitted assets in any one entity; | 19 | | (b) Maximum additional investment of 6% of | 20 | | admitted assets in the aggregate. | 21 | | An investment that qualified under this Section at the time | 22 | | it was
acquired by the company shall continue to qualify under | 23 | | this Section.
| 24 | | Investments permitted under this Section shall be | 25 | | registered in the name of
the
company and under its direct | 26 | | control or shall be held in a custodial account
with a bank or |
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| 1 | | trust company that is qualified to administer trusts in | 2 | | Illinois
under
the Corporate Fiduciary Act and that has an | 3 | | office in Illinois.
However, securities may be held in street | 4 | | form and in the custody of a
licensed dealer for a period not | 5 | | to exceed 30 days.
| 6 | | Notwithstanding the provisions of this Act, the Director | 7 | | may, after notice
and hearing, order a company to limit or | 8 | | withdraw from certain investments or
discontinue certain | 9 | | investments or investment practices to the extent the
Director | 10 | | finds those investments or investment practices endanger the | 11 | | solvency
of the company.
| 12 | | (Source: P.A. 90-794, eff. 1-1-99 .)
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