Today's Law As Amended


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SB-713 Insurer and State Compensation Insurance Fund investments.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 1210 of the Insurance Code is amended to read:

1210.
 (a) Any A  domestic incorporated insurer, after investing an amount equal to its required minimum paid-in capital in securities specified in Article 3 (commencing with Section 1170), may make such  investments as it may see fit in the purchase of, or loans upon, properties and securities other than or in addition to or in excess of those set forth in Articles Article  2 (commencing with Section 1150), Article  3 (commencing with Section 1170) 1170),  and Article  4 (commencing with Section 1190) of this chapter.  1190).  Investments under this section shall not exceed, in the aggregate, the lesser of any either  of the following:
(1) Five percent of the insurer’s admitted assets.
(2) Fifty percent of the excess of admitted assets over the sum of capital paid up, liabilities liabilities,  and the surplus required by Section 700.02. The percentage or dollar value of admitted assets and capital paid up and liabilities shall be determined by the insurer’s last preceding annual statement of conditions and affairs made as of the preceding December 31st and which that  has been filed with the commissioner pursuant to  as required by  law. The investments shall be subject to the provisions of Sections 1153.5, 1154, 1200, 1201, and 1202 as if they were excess funds investments. This section shall apply  applies  to an insurer other than a  life insurer  only if the insurer has aggregate capital and surplus of at least ten million dollars ($10,000,000).
(b) An investment originally made by an insurer pursuant to this section which that  subsequently meets the requirements of an investment contained in Article 2 (commencing with Section 1150), Article  3 (commencing with Section 1170) 1170),  or Article  4 (commencing with Section 1190) may, at the election of the insurer, be considered to be held pursuant to any provision contained in those articles.
(c) Pursuant to the authority conferred by subdivision (a), notwithstanding Section 1100, an insurer may make discretionary investments in shares of an open-end diversified management investment company, as defined in the federal Investment Company Act of 1940, as amended. Nothing in this subdivision is intended to  This subdivision does not  prohibit any other discretionary investment, now or in the future, that might otherwise be made by an insurer, whether expressly identified in this section or not.
(d) (1) The limitation in subdivision (a) shall be increased for an insurer if both of the following apply:
(A) The commissioner has approved the amount and other terms of the investment for the insurer before the insurer makes the investment.
(B) The California Organized Investment Network (COIN) has identified the investment in an investment opportunity bulletin, or otherwise deemed the investment to be a qualified investment, pursuant to Article 10.1 (commencing with Section 926) of Chapter 1.
(2) On or before December 31, 2025, the commissioner shall submit a report to the committees of the Senate and Assembly having jurisdiction over insurance on investments made pursuant to paragraph (1), with a focus on impact investments, high-impact investments, and community development investments, as defined in Article 10.1 (commencing with Section 926) of Chapter 1.
(e) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.

SEC. 2.

 Section 1210 is added to the Insurance Code, to read:

1210.
 (a)  A domestic incorporated insurer, after investing an amount equal to its required minimum paid-in capital in securities specified in Article 3 (commencing with Section 1170), may make investments as it may see fit in the purchase of, or loans upon, properties and securities other than or in addition to or in excess of those set forth in Article 2 (commencing with Section 1150), Article 3 (commencing with Section 1170), and Article 4 (commencing with Section 1190). Investments under this section shall not exceed, in the aggregate, the lesser of either of the following:
(1) Five percent of the insurer’s admitted assets.
(2) Fifty percent of the excess of admitted assets over the sum of capital paid up, liabilities, and the surplus required by Section 700.02. The percentage or dollar value of admitted assets and capital paid up and liabilities shall be determined by the insurer’s last preceding annual statement of conditions and affairs made as of the preceding December 31st and that has been filed with the commissioner as required by law. The investments shall be subject to the provisions of Sections 1153.5, 1154, 1200, 1201, and 1202 as if they were excess funds investments. This section applies to an insurer other than a life insurer only if the insurer has aggregate capital and surplus of at least ten million dollars ($10,000,000).
(b) An investment originally made by an insurer pursuant to this section that subsequently meets the requirements of an investment contained in Article 2 (commencing with Section 1150), Article 3 (commencing with Section 1170), or Article 4 (commencing with Section 1190) may, at the election of the insurer, be considered to be held pursuant to any provision contained in those articles.
(c) Pursuant to the authority conferred by subdivision (a), notwithstanding Section 1100, an insurer may make discretionary investments in shares of an open-end diversified management investment company, as defined in the federal Investment Company Act of 1940, as amended. This subdivision does not prohibit any other discretionary investment, now or in the future, that might otherwise be made by an insurer, whether expressly identified in this section or not.
(d) This section shall become operative on January 1, 2027.

SEC. 3.

 Section 11797 of the Insurance Code, as amended by Section 12 of Chapter 396 of the Statutes of 2019, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9,  1192.9 except as provided in subdivision (d) of this section,  1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199. Notwithstanding the foregoing, the State Compensation Insurance Fund may invest or reinvest an aggregated maximum of 20 percent of moneys that are in excess of the admitted assets over the liabilities and required reserves in the investments allowed pursuant to Sections 1191, 1192.4, 1192.6, 1192.10, 1194.7, and 1198.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code or notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) Notwithstanding any other law, the State Compensation Insurance Fund may invest in the discretionary investments authorized pursuant to Section 1210, but those investments shall not exceed the lesser of 2.5 percent of its admitted assets or 10 percent of moneys that are in excess of the admitted assets over the liabilities and required reserves.
(c) (d)  The Department of Insurance shall submit to the Legislature by January 31, 2019, a report that assesses the benefit and risk of the  Notwithstanding subdivision (a) or any other law, the State Compensation Insurance Fund may invest in money market mutual funds that comply with Section 1192.9, but shall not invest in a money market mutual fund that holds any assets in foreign investments, as defined in Section 1240. Investments in money market mutual funds made by the  State Compensation Insurance Fund’s equities investment history by measuring the volatility and total return of  Fund shall not exceed the lesser of 2.5 percent of its admitted assets or 10 percent of moneys that are in excess of the admitted assets over the liabilities and required reserves. The commissioner shall retain all remedies available, including the remedies in subdivision (d) of Section 1192.9, to enforce compliance by  the State Compensation Insurance Fund’s investment portfolio with and without equities. The report shall be submitted pursuant to Section 9795 of the Government Code. Fund with the money market mutual fund investment authority granted by this subdivision. 
(d) (e)  This section shall remain in effect only until January 1, 2025, 2027,  and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2025, 2027,  deletes or extends that date.

SEC. 4.

 Section 11797 of the Insurance Code, as amended by Section 13 of Chapter 396 of the Statutes of 2019, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code or warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) This section shall become operative on January 1, 2025. 2027.