Texas 2019 - 86th Regular

Texas Senate Bill SB1502 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R6054 JES-F
2	2	By: Creighton S.B. No. 1502
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authority of certain insurers to make investments
8	8	in bond exchange-traded funds.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter B, Chapter 424, Insurance Code, is
11	11	amended by adding Section 424.075 to read as follows:
12	12	Sec. 424.075. AUTHORIZED INVESTMENTS: BOND EXCHANGE-TRADED
13	13	FUNDS. (a) An insurer may invest the insurer's funds in excess of
14	14	minimum capital and surplus in shares of a bond exchange-traded
15	15	fund registered under the Investment Company Act of 1940 (15 U.S.C.
16	16	Section 80a-1 et seq.), as amended, if:
17	17	(1) the exchange-traded fund is solvent and reported
18	18	at least $1 million of net assets in the exchange-traded fund's
19	19	latest annual or more recent certified audited financial statement;
20	20	(2) the securities valuation office has designated the
21	21	exchange-traded fund as meeting the criteria to be placed on the
22	22	list promulgated by the securities valuation office of
23	23	exchange-traded funds eligible for reporting as a statutory
24	24	long-term bond obligation on Internal Revenue Service Form 1040,
25	25	Schedule D; and
26	26	(3) the amount of the insurer's investment in the
27	27	exchange-traded fund does not exceed 15 percent of the insurer's
28	28	capital and surplus.
29	29	(b) An insurer may deposit with the department shares of a
30	30	bond exchange-traded fund described by Subsection (a) as a
31	31	statutory deposit if state law requires a statutory deposit from
32	32	the insurer.
33	33	SECTION 2. Subchapter C, Chapter 425, Insurance Code, is
34	34	amended by adding Section 425.1231 to read as follows:
35	35	Sec. 425.1231. AUTHORIZED INVESTMENTS: BOND
36	36	EXCHANGE-TRADED FUNDS. (a) An insurance company may invest the
37	37	insurer's funds in excess of minimum capital and surplus in shares
38	38	of a bond exchange-traded fund registered under the Investment
39	39	Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended,
40	40	if:
41	41	(1) the exchange-traded fund is solvent and reported
42	42	at least $1 million of net assets in the exchange-traded fund's
43	43	latest annual or more recent certified audited financial statement;
44	44	(2) the securities valuation office has designated the
45	45	exchange-traded fund as meeting the criteria to be placed on the
46	46	list promulgated by the securities valuation office of
47	47	exchange-traded funds eligible for reporting as a statutory
48	48	long-term bond obligation on Internal Revenue Service Form 1040,
49	49	Schedule D; and
50	50	(3) the amount of the insurance company's investment
51	51	in the exchange-traded fund does not exceed the investment amount
52	52	limit in Section 425.157(b).
53	53	(b) An insurance company may deposit with the department
54	54	shares of a bond exchange-traded fund described by Subsection (a)
55	55	as a statutory deposit if state law requires a statutory deposit
56	56	from the insurance company.
57	57	(c) A bond exchange-traded fund described by Subsection (a)
58	58	shall be considered a business entity for purposes of Section
59	59	425.110.
60	60	SECTION 3. This Act takes effect September 1, 2019.