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ENGROSSED SENATE AMENDMENT
TO
ENGROSSED HOUSE
BILL NO. 2809 By: Sneed of the House
and
Quinn of the Senate
An Act relating to insurance; amending 36 O.S. 2011,
Section 1622, as amended by Section 3, Chapter 287,
O.S.L. 2017 (36 O.S. Supp. 2020, Section 1622), which
relates to mortgage on real estate; modifying
percentages of company's admitted assets that may be
invested in certain mortgage loans, money mortgages
and real property; providing exception; calculating
portfolio average loan to value ; amending 36 O.S.
2011, Section 1624, as amended by Section 4, Chapter
287, O.S.L. 2017 (36 O.S. Supp. 2020, Section 1624),
which relates to acquiring or holding real property;
modifying percentage of company's admitted assets
that may be invested in real property; and providing
an effective date.
AMENDMENT NO. 1. Page 7, line 23, delete Section 3, the effective
date, and insert a new Section 3, as emergency
provision
and amend the title to conform
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Passed the Senate the 20th day of April, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2021.
Presiding Officer of the House
of Representatives
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ENGROSSED HOUSE
BILL NO. 2809 By: Sneed of the House
and
Quinn of the Senate
An Act relating to insurance; amending 36 O.S. 2011,
Section 1622, as amended by Section 3, Chapter 287,
O.S.L. 2017 (36 O.S. Supp. 2020, Section 1622), which
relates to mortgage on real estate; modifying
percentages of company's admitted assets that may be
invested in certain mortgage loans, money mortgages
and real property; providing exception; calculating
portfolio average loan to value; amending 36 O.S.
2011, Section 1624, as amended by Section 4, Chapter
287, O.S.L. 2017 (36 O.S. Supp. 2020, Section 1624 ),
which relates to acquiring or holding real property;
modifying percentage of company's admitted assets
that may be invested in real property; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2011, Section 1622, as
amended by Section 3, Chapter 287, O.S.L. 2017 (36 O.S. Supp. 2020,
Section 1622), is amended to read as follows:
Section 1622. A. An insurer may invest any of its funds in
bonds, notes or othe r evidences of indebtedness which are secured by
first mortgages or deeds of trust upon improved, unencumbered real
property located in the United States, or which are secured by first
mortgages or deeds of trust upon leasehold estates having an expired
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term of not less than twenty -one (21) years, inclusive of the term
which may be provided by an enforceable option of renewal, in
improved, unencumbered real property located in the United States.
B. Real property shall not be deemed to be encumbered within
the meaning of this section by reason of the existence of
instruments reserving mineral, oil or timber rights, rights -of-way,
sewer rights, rights in walls, nor by reason of any liens for taxes
or assessments not delinquent, nor by reason of building
restrictions or other restrictive covenants, nor when such real
property is subject to lease under which rents or profits are
reserved to the owner, if in any event the security for such loan
is a first lien upon such real property and if there is no
condition or right of reentry or forfeiture under which, in the
case of real property other than leaseholds, such lien can be cut
off, subordinated, or otherwise disturbed or under which, in the
case of leaseholds, the insurer is unable to continue the lease in
force for the duration of the loan.
C. No such mortgage loan or loans made or acquired by an
insurer on any one property shall, at the time of investment by the
insurer, exceed eighty percent (80%) of the value, or if the loan
is for purchase money, the lesse r of eighty percent (80%) of the
value or purchase price of the real property or leasehold securing
the same, except that such loan or loans may equal the amount of
any guaranty by the United States of America or by any agency or
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instrumentality of the Uni ted States of America or by any private
insurance company licensed as an authorized insurer by the
Insurance Department of the State of Oklahoma to write mortgage
insurance. Additionally, no single mortgage loan to any individual
shall exceed four percent (4%) three percent (3%) of the company's
admitted assets, with no more than thirty -five percent (35%) of the
company's admitted assets invested in total aggregate amount in
mortgage loans. However, an insurer may invest up to forty -five
percent (45%) of its admitted assets invested in total aggregate
amount in mortgage loans if the portfolio average loan to value is
seventy-five percent (75%) or less of fair market value.
The calculation of admitted assets and portfolio average loan
to value is based on the insurer's annual statement as of December
31 last preceding the date of investment, or as shown by a current
financial statement on file with the Commissioner.
Mortgage loans made or acquired by an insurer prior to December
31, 1992, shall be in complia nce with the limitation provided in
this subsection for total aggregate investment of admitted assets
in mortgage loans by December 31, 1997. Mortgage loans made or
acquired by an insurer on or after December 31, 1992, but prior to
September 1, 1993, shal l be in compliance with the limitations for
investment of admitted assets in single mortgage loans to
individuals and total aggregate investments of admitted assets in
mortgage loans provided in this subsection by December 31, 1997.
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Insurers shall maintai n accurate and adequate records reflecting
the provisions of this section and submit such records with
quarterly and annual statements.
D. No such mortgage loan or loans shall be made or acquired by
an insurer except after an appraisal made by a qualified appraiser
for the purpose of such investment. No change or modification
shall be made to such appraisal by any mortgage underwriter unless
such person is licensed or certified as an appraiser pursuant to
the Oklahoma Certified Real Estate Appraisers Act or unless such
person has been provided by the person who made the appraisal
written consent to make the modification. Such modification shall
be disclosed to the seller and buyer and/or the seller's agent.
E. No such mortgage loan or loans made or acqui red by an
insurer after July 1, 2006, shall be made or acquired by an insurer
unless the mortgages or mortgage loans are upon improved,
unencumbered real property permitted as an investment pursuant to
Section 1624 of this title.
F. No mortgage loan upon a leasehold shall be made or acquired
pursuant to this section unless the terms thereof shall provide for
amortization payments to be made by the borrower on the principal
thereof at least once in each year in amounts sufficient completely
to amortize the loan within a period of four -fifths (4/5) of the
term of the leasehold, inclusive of the term which may be provided
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by an enforceable option of renewal, which is unexpired at the time
the loan is made, but in no event exceeding thirty -five (35) years.
G. Subject to specific limitations otherwise applicable, no
more than an aggregate of thirty-five percent (35%) forty-five
percent (45%) of the company's admitted assets may be invested in
mortgage loans pursuant to this section, purchase money mortgages
pursuant to Section 1623 of this title, and real property pursuant
to Section 1624 of this title.
SECTION 2. AMENDATORY 36 O.S. 2011, Section 1624, as
amended by Section 4, Chapter 287, O.S.L. 2017 (36 O.S. Supp. 2020,
Section 1624), is amended to read as follows:
Section 1624. No insurance company, foreign, alien or domestic,
doing business in Oklahoma, may acquire or hold real property
therein, except as follows:
1. Such as shall be requisite for the convenient accommodation
of the transaction of its own business; the amount invested in such
real property shall not exceed ten percent (10%) of the investing
company's admitted assets but the Insurance Commissioner may grant
permission to the company to invest in real property for such
purpose in such increased amount as the Insurance Commissioner may
deem proper on the showing made, if upon a hearing held the
Insurance Commissioner finds that the amount represented by such
percentage of its admitted assets is insufficient to provide
convenient accommodation for the company's business. Real estate
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maintained for the convenient accommodation of the transaction of
its own business, permitted to be carried as an admitted asset of
the company pursuant to this section shall be carried at an amount
equal to its cost at the time of acquisition together with the
actual cost of improvements made thereon, less encumbrances and less
depreciation; provided, however, any real estate carried at fair
market value as an admitted asset of the company on the effective
date of this act shall be excluded from this provision;
2. Such as shall have been mortgaged to it in good faith by way
of security for loans previously contracted for monies due;
3. Such as shall have been conveyed to it in satisfaction of
debts previously contracted in course of its dealings;
4. Such as shall have been purchased at sales on judgments,
decrees, or mortgages obtained or made for such debts;
5. Such real property as shall have been acquired in whole or
in part, in exchange for real property of approximately the same
value theretofore legally acquired and held by it;
6. Real property and improvements thereon located in
incorporated cities and towns and as additions thereto or real
property and improvements wherever located a cquired for sale or
lease, if such lessee or purchaser could have legally acquired the
same in the first instance, and may make improvements thereon for
commercial and industrial purposes as an investment for the
production of income. The phrase "commerci al and industrial
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purposes" shall not include real property primarily intended for use
or valued as agricultural, horticultural, farm, and ranch, unless
adjacent to other real property the ownership of which is permitted
under this section and was acquired prior to July 1, 2006. The
total amount invested in such real property and improvements thereon
shall not exceed the company's capital and/or surplus, or ten
percent (10%) of its admitted assets whichever is the lesser;
provided, however, the amount inve sted in any one investment shall
not exceed four percent (4%) of the company's admitted assets. The
admitted assets shall be determined by the company's last annual
report made as of December 31, immediately preceding and which has
been filed with the Ins urance Commissioner as required by law, or as
shown by a current financial statement on file with the
Commissioner;
7. Real property acquired and held under Section 1612.1 of this
title; and
8. Subject to specific limitations otherwise applicable, no
more than an aggregate of thirty-five percent (35%) forty-five
percent (45%) of the company's admitted assets may be invested in
real property pursuant to this section, purchase money mortgages
pursuant to Section 1623 of this title, and mortgage loans pursua nt
to Section 1622 of this title.
SECTION 3. This act shall become effective November 1, 2021.
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Passed the House of Representatives the 3rd day of March, 2021.
Presiding Officer of the House
of Representatives
Passed the Senate th e ___ day of __________, 2021.
Presiding Officer of the Senate