ENROLLED
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Regular Session, 2010
HOUSE BILL NO. 284
BY REPRESENTATIVE KLECKLEY
AN ACT1
To amend and reenact R.S. 22:584(D)(1), relative to domestic insurers; to provide with2
respect to investment in securities by such insurers; and to provide for related3
matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:584(D)(1) is hereby amended and reenacted to read as follows:6
ยง584. Investments in securities7
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D. Any domestic insurer, in addition to the investments permitted by9
Subsection A of this Section, may invest an amount equal to its capital and surplus10
if it is a stock company, and, if it is a company other than stock, it may invest an11
amount equal to its surplus over all liabilities as follows:12
(1)(a)(i) In shares of capital stock, American Depository Receipts listed on13
a national securities exchange, including the National Association of Securities14
Dealers Automated Quotations (NASDAQ), bonds, securities, or other evidences of15
indebtedness of any solvent corporation (other than a corporation engaged solely in16
the business of operating real estate or a corporation having substantially all of its17
assets invested in the shares of such corporation except as specifically provided in18
Item (ii) of this Subparagraph) created under the laws of the United States, or the19
states of the United States, or the District of Columbia, or a foreign corporation20
whose stock is listed on the New York Stock Exchange or the American Stock21
Exchange, a national securities exchange, including NASDAQ, provided that such22
insurer may not, except in the case of shares permitted by Paragraph (9) of23
Subsection A of this Section, invest in the shares or American Depository Receipts24 ENROLLEDHB NO. 284
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of a manufacturing corporation, commonly known as "industrial", unless such1
corporation is listed on a national securities exchange, including NASDAQ, at the2
time of the investment or has earned during any three years of the five-year period3
next preceding the date of the investment, a sum applicable to dividends equal in the4
aggregate to not less than twelve percent of the par value (or, in the case of shares5
having no par value, the issued value) of its outstanding shares, or if such shares6
have been issued less than five years, has earned a sum applicable to dividends7
during the tenure of such issue, equal to not less than four percent per annum of the8
par value, (or, in the case of shares having no par value, the issued value) of its9
outstanding shares.10
(ii) In the stock of a real estate investment trust (REIT) whose stock is listed11
on the New York Stock Exchange, or the American Stock Exchange, or NASDAQ,12
provided such investment shall not exceed five percent of the total number of shares13
of any one such trust and that not more than two percent of its admitted assets are14
invested in shares of any one such trust. Shares in each such trust which has over15
one-half of its assets invested in ownership of real estate or which has such16
ownership as its stated investment objective shall be considered real estate17
investment for purposes of conforming with the limitation on real estate ownership18
imposed by Subsection G of this Section.19
(b) Such insurers shall not invest more than five percent of its admitted20
assets in the shares of any one such manufacturing corporation. Such insurers may21
acquire the stock or other share capital of another insurer but shall not invest more22
than fifty percent of said funds, directly or indirectly, in shares of another insurer,23
nor shall such insurer acquire the whole or any part of the stock or other share capital24
of another insurer which transacts the same kind or kinds of insurance where the25
effect of such acquisition may be to substantially lessen competition generally or26
tend to create a monopoly. Investing in the stocks, bonds, or other evidence of27
indebtedness of any corporation, a substantial portion of whose funds are invested28
directly or indirectly in the shares of insurance companies, shall be regarded as29
investing indirectly in such shares. Whenever the commissioner of insurance has30 ENROLLEDHB NO. 284
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reason to believe that there is a violation of this Subsection, he shall conduct an1
investigation, and if he shall find that such investment is in violation of this2
Subsection, he shall cause such insurer to divest itself of such investment within such3
reasonable time, or such extension thereof, as he shall specify. Any such order of the4
commissioner of insurance shall be subject to review as provided in Chapter 12 of5
this Title, R.S. 22:2191 et seq.6
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SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: