83R3715 JRR-F
By: Smithee H.B. No. 2784
A BILL TO BE ENTITLED
AN ACT
relating to certain authorized investments under the Insurance
Code.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 424.064(b), Insurance Code, is amended
to read as follows:
(b) An insurer with admitted assets of more than $500
million may individually or in conjunction with other investors
acquire, own, hold, develop, and improve real property that is
essentially residential or commercial in character, even though the
property is subject to an existing mortgage or the insurer
subsequently mortgages the property. An investment in [investment
real property other than real property authorized by another
provision of this code, or participations in that other investment]
real property is authorized [,] if the property is materially
enhanced in value by:
(1) the construction of durable, permanent-type
buildings and other improvements that cost an amount at least equal
to the cost of the real property, excluding buildings and
improvements at the time the property is acquired; or
(2) the construction, commenced before the second
anniversary of the date the real property is acquired, of buildings
and improvements described by Subdivision (1).
SECTION 2. Section 424.068, Insurance Code, is amended to
read as follows:
Sec. 424.068. AUTHORIZED INVESTMENTS: INVESTMENT IN
FOREIGN JURISDICTION. (a) In addition to the investments in Canada
authorized by Sections 424.051, 424.058-424.071, and 424.074 and
subject to this section, an insurer may make investments within
another [invest the insurer's funds in excess of minimum capital
and surplus in an investment in a] foreign country or a
commonwealth, territory, or possession of the United States[, a
foreign country other than Canada, or a foreign security
originating in one of those commonwealths, territories,
possessions, or countries, if:
[(1) the investment is similar to investments the
insurer is authorized by Sections 424.051, 424.058-424.071, and
424.074 to make within the United States or Canada; and
[(2) if a debt obligation, the investment is rated one
or two by the securities valuation office].
(b) An investment made under this section must be
substantially the same type as an investment authorized to be made
within the United States or Canada by this subchapter. [The
aggregate amount of an insurer's investments under Sections
424.051, 424.058-424.071, and 424.074 in a single foreign
jurisdiction may not exceed:
[(1) as to a foreign jurisdiction that is given a
sovereign debt rating of one by the securities valuation office, 10
percent of the insurer's admitted assets; or
[(2) as to any other foreign jurisdiction, five
percent of the insurer's admitted assets.]
(c) The sum of the amount of investments made under this
section and the amount of similar investments made within the
United States and Canada may not exceed any limitation imposed by
Sections 424.051, 424.058-424.071, and 424.074 [the sum of:
[(1) the amounts authorized by Section 424.073; and
[(2) 20 percent of the insurer's assets].
(d) The aggregate [combined total of the] amount of an
insurer's investments [made] under this section[, the amount of
similar investments made within the United States and Canada, and
any amounts of investments authorized by Section 424.073] may not
exceed the sum of:
(1) the amount of the insurer's reserves attributable
to insurance business in force in foreign countries, if any, and any
additional investments required by a foreign country as a condition
of engaging in business in that country; and
(2) 20 percent of the insurer's assets [any limitation
prescribed by Sections 424.051, 424.058-424.071, and 424.074].
(e) An insurer may not invest more than 10 percent of the
insurer's assets in investments denominated in foreign currency
that are not hedged under Subchapter E.
SECTION 3. Section 425.119(f), Insurance Code, is amended
to read as follows:
(f) In addition to an investment authorized by [Except as
provided by] Subsection (g), an insurance company may individually
or in conjunction with other investors acquire, [not] own, hold,
develop, and improve real property that is essentially residential
or commercial in character, even though the property is subject to
an existing mortgage or the insurance company subsequently
mortgages the property [or hold an equity interest in any
residential property or subdivision, single or multiunit family
dwelling property, or undeveloped real property to subdivide for or
develop residential or single or multiunit family dwellings].
SECTION 4. Section 424.064(d), Insurance Code, is repealed.
SECTION 5. This Act takes effect September 1, 2013.