The online versions of legislation provided on this website are not official. Enrolled bills are the final version passed by the Ohio General Assembly and presented to the Governor for signature. The official version of acts signed by the Governor are available from the Secretary of State's Office in the Continental Plaza, 180 East Broad St., Columbus.
|
Sub. H. B. No. 212 As Passed by the HouseAs Passed by the House
124th General Assembly | Regular Session | 2001-2002 |
| |
REPRESENTATIVES Wolpert, G. Smith, Seitz, Willamowski, Kearns, Faber, Gilb, Britton, Rhine, Stapleton, Olman, Jolivette, Evans, Krupinski, Salerno, Husted, Flowers, Widowfield, Clancy, Hughes, Lendrum, Goodman, DeWine, Schmidt, Cates, Reidelbach, Fessler, Carmichael, Latta, Hartnett, Carey, Peterson, Coates, Hagan, Raga, Collier, Niehaus, Calvert, Setzer, Webster, Williams, Callender
A BILL
| To amend sections 3901.64, 3903.32, 3907.14, and | 1 |
|
3925.08 of the Revised
Code to permit assuming | 2 |
|
insurers, in the event of
the insolvency of a | 3 |
|
ceding insurer, to make
reinsurance payments | 4 |
|
directly to an insured or
beneficiary when this is | 5 |
|
provided for in a
reinsurance agreement; to
permit | 6 |
|
assuming
insurers to introduce defenses in
an | 7 |
|
insolvency
proceeding that it deems to be | 8 |
|
available to the
ceding insurer; and to permit | 9 |
|
insurers to invest in limited liability company | 10 |
|
membership interests of insurance, financial, | 11 |
|
investment, and investment management companies. | 12 |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3901.64, 3903.32, 3907.14, and | 13 |
3925.08 of the Revised
Code be amended to read as follows: | 14 |
Sec. 3901.64. (A) A domestic ceding insurer may take
credit | 15 |
for any reinsurance ceded as provided in sections 3901.61
to | 16 |
3901.63 of the Revised Code only if the reinsurance agreement | 17 |
contained in the reinsurance contract, and any agreement that | 18 |
provides security for the payment of the obligations under the | 19 |
reinsurance agreement, including any trust agreement, provide, in | 20 |
substance, for
the following: | 21 |
(1)
The
In the event of the insolvency of the ceding insurer, | 22 |
the reinsurance, whether paid directly or from trust
assets | 23 |
securing the reinsurance agreement, shall be payable by
the | 24 |
assuming insurer on the basis of the liability of the
domestic | 25 |
ceding insurer under the policy or contract reinsured,
without any | 26 |
diminution because the
domestic ceding insurer is
insolvent or | 27 |
because the liquidator or statutory receiver has
failed to pay all | 28 |
or any portion of any claims; | 29 |
(2) The reinsurance payments, whether paid directly or
from | 30 |
trust assets securing the reinsurance agreement, shall be
made by | 31 |
the assuming insurer directly to the
domestic ceding
insurer, or | 32 |
in the event of its insolvency or liquidation, to its
liquidator | 33 |
or statutory receiver
except where the reinsurance contract or | 34 |
other written agreement specifically provides for direct payment | 35 |
of the reinsurance to the insured or beneficiary of the insurance | 36 |
policy in the event of the insolvency of the ceding insurer. | 37 |
(B)(1) The reinsurance agreement may provide that the | 38 |
domiciliary
liquidator or statutory receiver shall give written | 39 |
notice
to the assuming insurer that a
claim is pending against | 40 |
the
domestic ceding insurer on the
policy or contract reinsured. | 41 |
The notice shall be given within a
reasonable amount of time after | 42 |
the claim is filed with the
liquidator or statutory receiver. | 43 |
During the pendency of the claim, any assuming insurer may | 44 |
investigate the claim and interpose, at its own expense, in the | 45 |
proceeding where the claim is to be adjudicated any defenses which | 46 |
it deems to be available to the ceding insurer or its liquidator. | 47 |
(2) The expense may be filed as a claim against the | 48 |
insolvent ceding insurer to the extent of a proportionate share of | 49 |
the benefit that may accrue to the ceding insurer solely as a | 50 |
result of the defense undertaken by the assuming insurer. Where | 51 |
two or more assuming insurers are involved in the same claim and a | 52 |
majority in interest elect to interpose a defense to the claim, | 53 |
the expense shall be apportioned in accordance with the terms of | 54 |
the reinsurance agreement as though the expense had been incurred | 55 |
by the ceding insurer. | 56 |
Sec. 3903.32. The amount recoverable by the liquidator from | 57 |
reinsurers shall
not be reduced as a result of delinquency | 58 |
proceedings, regardless of any
provision in the reinsurance | 59 |
contract or other agreement. Payment made
by a reinsurer
directly | 60 |
to an insured or other creditor does not diminish the reinsurer's | 61 |
obligation to the insurer's estate except when the reinsurance | 62 |
contract, and
any
or other written agreement
that provides | 63 |
security for the payment
of the obligations under
the contract, | 64 |
provides
for direct
coverage of a named insured and the payment
is | 65 |
made in discharge
of that obligation and the contract or agreement | 66 |
has been
approved
pursuant to division (A)(3) of section 3901.341 | 67 |
or section 3907.12
or
3925.33 of the Revised Code
for direct | 68 |
payment of the
reinsurance to the insured or beneficiary of the | 69 |
insurance policy in the event of the
insolvency of the ceding | 70 |
insurer. | 71 |
Sec. 3907.14. The capital, surplus, and all accumulations
of | 72 |
every domestic life insurance company shall be invested as | 73 |
follows: | 74 |
(A) A domestic company may acquire, hold, and convey real | 75 |
estate: | 76 |
(1) Which has been acquired or is acquired for its
principal | 77 |
offices, or which is used in connection therewith,
provided that | 78 |
it shall not invest more than five per cent of its
admitted assets | 79 |
on the preceding thirty-first day of December in
such real estate; | 80 |
(2) Which has been mortgaged to it in good faith by way of | 81 |
security for loans previously contracted or for money due; | 82 |
(3) Which has been conveyed to it in satisfaction of debts | 83 |
previously contracted in the course of its dealings, or which it | 84 |
may receive in or on account of an exchange for real estate | 85 |
acquired in its operations; | 86 |
(4) Which it has purchased at sales under mortgages and on | 87 |
any legal process in connection with its investments or under | 88 |
decrees obtained or made for such debts; | 89 |
(5) Which is acquired, owned, or held for the purpose of | 90 |
developing, improving, or otherwise utilizing such real estate
for | 91 |
the production of income, without restriction or limitation
as to | 92 |
time, and may acquire, lease, hold, and manage personal
property | 93 |
used in connection therewith. No investments in real
estate to be | 94 |
used primarily for recreational, agricultural, or
mining purposes | 95 |
shall be made under authority of division
(A)(5) of this section | 96 |
and except for investments authorized under divisions
(A)(1), (2), | 97 |
(3), and (4) of this section, no domestic life
insurance company | 98 |
shall invest in real estate under divisions
(A)(5) and (R) of this | 99 |
section a sum exceeding in the
aggregate ten per cent of its | 100 |
admitted assets on the preceding
thirty-first day of December. | 101 |
All real estate specified in divisions (A)(3) and (4) of
this | 102 |
section, which is not necessary for its accommodation in the | 103 |
convenient transaction of its business, shall be sold by the | 104 |
company and disposed of within five years after it has acquired | 105 |
the title to such real estate or within five years after such
real | 106 |
estate has ceased to be necessary for the accommodation of
its | 107 |
business, unless the company procures the certificate of the | 108 |
superintendent of insurance that its interests will suffer | 109 |
materially by a forced sale of the real estate, in which event
the | 110 |
time for the sale may be extended to such time as the | 111 |
superintendent directs in such certificate. | 112 |
(B) A domestic company may acquire, hold, and convey | 113 |
tangible personal property or interests therein for the
production | 114 |
of income, provided no domestic company shall invest
in excess of | 115 |
two per cent of its admitted assets as of the
preceding | 116 |
thirty-first day of December under this division. | 117 |
(C) In loans and liens upon the security of its own | 118 |
policies, not exceeding the reserve or present value of the | 119 |
policies, computed according to any standard authorized by law or | 120 |
according to such higher standard as the company has adopted and | 121 |
maintains on the policy, the reserve being the amount of debts of | 122 |
the life insurance company by reason of its outstanding policies | 123 |
in gross, which may be so treated in the returns for taxation
made | 124 |
by it; | 125 |
(D) In bankers' acceptances and bills of exchange of the | 126 |
kinds and maturities made eligible by law for rediscount with | 127 |
federal reserve banks, provided that such acceptances and bills
of | 128 |
exchange are accepted by a bank or trust company incorporated | 129 |
under the laws of the United States or of this state or any other | 130 |
bank or trust company which is a member of the federal reserve | 131 |
system; | 132 |
(E) In equipment trust obligations or certificates,
security | 133 |
agreements, or other evidences of indebtedness entered
into | 134 |
directly or guaranteed by any company operating wholly or
partly | 135 |
within the United States or Canada, provided that the debt | 136 |
obligation is secured by a first lien on tangible personal | 137 |
property which is purchased or secured for payment thereof and
the | 138 |
debt obligation is repayable within twenty years from the
date of | 139 |
issue in annual, semiannual, or more frequent
installments | 140 |
beginning not later than the first year after such
date; | 141 |
(F) In bonds issued by or for federal land banks and any | 142 |
debentures issued by or for federal intermediate credit banks | 143 |
under the "Federal Farm Loan Act of 1916," 39 Stat. 360, 12 | 144 |
U.S.C.A. 641 as amended; any debentures issued by or for banks
for | 145 |
cooperatives under the "Farm Credit Act of 1933," 48 Stat.
257, 12 | 146 |
U.S.C.A. 131 as amended; | 147 |
(G) In bonds issued under the "Home Owners' Loan Act of | 148 |
1933," 48 Stat. 128, 12 U.S.C.A. 1461; | 149 |
(H) In notes, bonds, debentures, or other such obligations | 150 |
issued by the federal housing administrator; | 151 |
(I)(1)(a) In bonds or other evidences of indebtedness, not | 152 |
in default as to principal or interest, which are valid | 153 |
obligations issued, assumed or guaranteed by the United States,
by | 154 |
any state thereof, by the Commonwealth of Puerto Rico, by any | 155 |
territory or insular possession of the United States, or by the | 156 |
District of Columbia, or which are valid obligations issued, | 157 |
assumed, or guaranteed by any county, municipal corporation, | 158 |
district, or political subdivision, or by any civil division or | 159 |
public instrumentality of such governmental units, if by
statutory | 160 |
or other legal requirements such obligations are
payable, as to | 161 |
both principal and interest, from taxes levied
upon all taxable | 162 |
property within the jurisdiction of such
governmental unit; | 163 |
(b) In bonds or other obligations issued by or for account | 164 |
of any such governmental unit having a population of five
thousand | 165 |
or more by the latest official federal or state census,
which are | 166 |
payable as to both principal and interest from revenues
or | 167 |
earnings from the whole or any part of a publicly owned
utility | 168 |
supplying water, gas, sewage disposal facility, or
electricity, or | 169 |
any or all of them, provided that by statute or
other applicable | 170 |
legal requirements, rates from the service or
operation of such | 171 |
utility must be fixed, maintained, and
collected at all times so | 172 |
as to produce sufficient revenues or
earnings to pay both | 173 |
principal and interest of such bonds or
obligations as they become | 174 |
due; | 175 |
(c) In any bonds or obligations payable from and secured
by | 176 |
revenues of the United States, the Commonwealth of Puerto
Rico, or | 177 |
any state or instrumentality of any of them, or of the
District of | 178 |
Columbia or of any commission, board, or other
instrumentality of | 179 |
one or more of them, provided there is a
specific pledge of | 180 |
revenues, and provided that there is adequate
provision for | 181 |
payment of interest prior to completion of
construction and that | 182 |
rates, fees, tolls, or charges fixed are,
after completion of | 183 |
construction, sufficient to pay all expenses
of operation and | 184 |
maintenance and the principal and interest when
due. | 185 |
(2) In legally authorized and executed bonds, notes, | 186 |
warrants, and securities which are the direct obligation of or
are | 187 |
guaranteed by Canada, or which are the direct obligation of
or are | 188 |
guaranteed as to both principal and interest by any
province of | 189 |
Canada, or which are the direct obligation of or are
guaranteed as | 190 |
to both principal and interest by any municipality
of Canada | 191 |
having a population of fifty thousand or more by the
latest | 192 |
official census, and which are not in default as to
principal or | 193 |
interest; | 194 |
(3) In bonds or other evidence of indebtedness, not in | 195 |
default as to principal or interest, which are valid obligations | 196 |
issued, assumed, or guaranteed by the United States, by any state | 197 |
thereof, the Commonwealth of Puerto Rico, or by the District of | 198 |
Columbia, if by statutory or other legal requirements such | 199 |
obligations are payable, as to both principal and interest, from | 200 |
selective taxes levied by such governmental unit. | 201 |
(J)(1) In mortgage bonds which are the direct obligation
of | 202 |
a railroad, and which are the first lien on a substantial
portion | 203 |
of its property, situated wholly in the United States or
partly in | 204 |
the United States and partly in Canada, the average net
yearly | 205 |
earnings of which, after deducting proper charges for
maintenance | 206 |
of way and equipment, for the five fiscal years
preceding such | 207 |
investments, have been at least one and one-half
times the average | 208 |
yearly interest for the same period on its
mortgages, bonds, and | 209 |
funded debts, and in the junior mortgage
bond issues of such | 210 |
railroad corporations of the same character
and under the same | 211 |
conditions where the average net yearly
earnings for the five | 212 |
fiscal years preceding such investment,
after deducting proper | 213 |
charges for maintenance of way and
equipment, have been at least | 214 |
three times the average yearly
interest charges on such issues and | 215 |
all prior liens; or in the
mortgage bonds of any incorporated | 216 |
railroad company which have
been assumed or guaranteed, both as to | 217 |
principal and interest, by
any incorporated railroad company whose | 218 |
bonds constitute a legal
investment under division (J)(1) of this | 219 |
section. In
applying the earnings test to any issuing, assuming, | 220 |
or
guaranteeing company, whether or not in legal existence during | 221 |
the whole of such five years next preceding the date of
investment | 222 |
by such insurer, which has at any time during such
five-year | 223 |
period acquired the assets of any other company by
purchase, | 224 |
merger, consolidation, or otherwise, substantially as
an entirety, | 225 |
or has been reorganized pursuant to the bankruptcy
law, the | 226 |
earnings of such other predecessor or constituent
companies, or of | 227 |
the company so reorganized, available for
interest for such | 228 |
portion of such period that has preceded such
acquisition, or such | 229 |
reorganization, may be included in the
earnings of such issuing, | 230 |
assuming, or guaranteeing company for
such portion of such period | 231 |
as is determined in accordance with
adjusted or pro forma | 232 |
consolidated earnings statements covering
such portion of such | 233 |
period. In such cases the requirements as
to earnings shall be | 234 |
based upon the mortgages, bonds, and funded
debts as they exist | 235 |
immediately after such acquisitions or such
reorganizations. | 236 |
(2) In mortgage bonds or other interest-bearing
obligations | 237 |
of terminal companies organized under the laws of the
United | 238 |
States or any state thereof, provided such bonds or
obligations | 239 |
have been assumed or guaranteed jointly or severally
by two or | 240 |
more railroad corporations whose bonds constitute legal | 241 |
investments under division (J)(1) of this section; | 242 |
(3) In loans to veterans guaranteed in whole or in part by | 243 |
the United States pursuant to Title III of the "Servicemen's | 244 |
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C.A. 693, as | 245 |
amended, provided such guaranteed loans are liens upon real | 246 |
estate; | 247 |
(4) In mortgage bonds which are the direct obligation of
and | 248 |
first lien upon the property of a corporation engaged
directly and | 249 |
primarily in the production and sale of, or in the
purchase and | 250 |
sale of electricity or gas, or in the operation of
telephone or | 251 |
telegraph systems or waterworks, or in some
combination of them, | 252 |
and situated wholly in the United States, or
the Commonwealth of | 253 |
Puerto Rico, or partly in the United States
and partly in Canada, | 254 |
the average net yearly earnings of which,
after deducting proper | 255 |
charges for replacements, depreciation,
and obsolescence, for the | 256 |
five fiscal years preceding such
investment, have been at least | 257 |
one and one-half times the average
yearly interest for the same | 258 |
period on its mortgages, bonds, and
funded debts; | 259 |
(5) Any such corporation, or any of its predecessors, | 260 |
constituent, or successor corporations, must have been in
business | 261 |
not less than ten years prior to the date of the
purchase of such | 262 |
bonds, and must not have defaulted on the
interest or principal of | 263 |
any of its bonds or funded debts
outstanding during the five years | 264 |
immediately preceding the date
of purchase, provided that division | 265 |
(J)(5) of this section
does not preclude investments in mortgage | 266 |
bonds of railroads
reorganized through purchase of assets, merger, | 267 |
consolidation,
bankruptcy proceedings, or otherwise if such bonds | 268 |
are eligible
for investment under division (J)(1) of this section; | 269 |
(6) No investment shall be made under division (J)(1),
(2), | 270 |
(4), or (5) of this section if such railroad or other
utility | 271 |
corporation and its business, and its issue of bonds,
funded | 272 |
debts, and stocks are not under the supervision and
control of an | 273 |
authorized state or federal official or commission,
provided that | 274 |
division (J)(6) of this section does not apply
to the mortgage | 275 |
bonds or other interest-bearing obligations of
companies engaged | 276 |
in the operation of telephone or telegraph
systems. | 277 |
(K)(1) In bonds or notes secured by mortgages or deeds of | 278 |
trust which are a first lien upon unencumbered fee simple real | 279 |
estate in any state, the Commonwealth of Puerto Rico, the
District | 280 |
of Columbia, or Canada, provided the amount loaned does
not exceed | 281 |
eighty per cent of the actual market value of such
property. | 282 |
The actual market value of any such property shall be shown | 283 |
by a valuation and appraisement in writing by a qualified land | 284 |
appraiser. | 285 |
In the event the amount loaned under division (K)(1)
of this | 286 |
section exceeds eighty per cent of the actual market
value of the | 287 |
land, the structures on the land must be insured by
an authorized | 288 |
fire insurance company or covered by other
comparable | 289 |
indemnification, and the policies or indemnifications
shall be | 290 |
payable or assigned to the mortgagee or to a trustee in its
behalf | 291 |
and shall be held by the mortgagee or an agent of the mortgagee
or | 292 |
by such trustee; or in lieu of holding such policies or | 293 |
indemnifications, the
mortgagee may purchase a policy or policies | 294 |
of mortgage
protection insurance, payable to the mortgagee or a | 295 |
trustee in
its behalf, insuring the mortgagee against loss | 296 |
resulting from
the failure of the mortgagor to acquire and | 297 |
maintain, from such
an authorized fire insurance company or other | 298 |
comparable source,
insurance or indemnification. | 299 |
(2) In bonds or notes secured by mortgages insured by the | 300 |
federal housing administrator; | 301 |
(3) In bonds or notes secured by mortgages or deeds of
trust | 302 |
which are a first lien on leasehold estates in wholly or
partly | 303 |
improved real property, unencumbered, except rentals
accruing from | 304 |
the property to the owner of the fee, provided that
any loan | 305 |
secured by a leasehold estate must provide for
amortization by | 306 |
repayment of principal at least once in each year
in amounts | 307 |
sufficient to repay the loan within a period of
four-fifths of the | 308 |
unexpired term of the leasehold but within a
period of not more | 309 |
than thirty years, and further provided that
the amount loaned on | 310 |
the leasehold estate does not exceed
seventy-five per cent of | 311 |
total market value of the leasehold
estate determined by | 312 |
appraisements in writing made under oath by
two real estate | 313 |
owners, residents of the county or local district
in which the | 314 |
real estate is located, or by a qualified land
appraiser; if the | 315 |
amount loaned exceeds seventy-five per cent of
the value of that | 316 |
portion of the leasehold estate represented by
the value of the | 317 |
land, exclusive of improvements on the land,
such improvements | 318 |
shall be insured against fire for the benefit
of the mortgagee in | 319 |
an amount not less than the difference
between seventy-five per | 320 |
cent of the value of such land,
exclusive of buildings, and the | 321 |
amount loaned; the policies for
such amount shall be payable to | 322 |
and held by the mortgagee or a
trustee named in the lease who | 323 |
shall be required by the terms of
said lease to use and apply the | 324 |
proceeds of such insurance for
repairing, restoring, or rebuilding | 325 |
such buildings; | 326 |
(4) The following shall not be considered as prior liens
or | 327 |
encumbrances in the construction and application of this
section: | 328 |
leasehold estates of any duration, rights-of-way,
servitudes, | 329 |
joint driveways, easements, party wall agreements,
current taxes | 330 |
and assessments not delinquent, and restrictions as
to building, | 331 |
use, and occupancy. | 332 |
(5) This section does not prohibit a domestic life
insurance | 333 |
company from renewing or extending a loan for the
original or a | 334 |
lesser amount nor does it prohibit a company from
accepting as | 335 |
part payment for real estate sold by it a mortgage
on the real | 336 |
estate for a greater percentage of the purchase price
of the real | 337 |
estate than is otherwise permitted by this section. | 338 |
(L) In bonds, notes, or other evidences of indebtedness of | 339 |
corporations, trusts, partnerships, or similar business entities | 340 |
organized
under the laws of the United
States, or any state | 341 |
thereof, the Commonwealth of Puerto Rico,
the District of | 342 |
Columbia, or Canada or any province of Canada,
secured by | 343 |
assignment of lease or leases or the rentals payable
under such | 344 |
leases, of real or personal property or both to (1)
the United | 345 |
States or any instrumentality thereof, or any state of
the United | 346 |
States, the Commonwealth of Puerto Rico, or the
District of | 347 |
Columbia, or any county, city, town, school, or water
district, | 348 |
authority, or other political subdivision in any such
government, | 349 |
or Canada, any province of Canada, or any municipal
corporation of | 350 |
Canada that has a population of fifty thousand or
more by the | 351 |
latest official census; or (2) one or more
corporations, trusts, | 352 |
partnerships, or similar business entities
organized under the | 353 |
laws of the United States, any state thereof,
the Commonwealth of | 354 |
Puerto Rico, the District of Columbia, or
Canada or any province | 355 |
of Canada, provided that (a) the fixed
rentals assigned shall be | 356 |
sufficient to repay the indebtedness
within the unexpired term of | 357 |
the lease, exclusive of the term
which may be provided by an | 358 |
enforceable option of renewal; (b)
such lessee has not defaulted | 359 |
in payment of interest or principal
on any of its bonds, notes, | 360 |
debentures, or other evidences of
indebtedness during the five | 361 |
years immediately preceding the date
of the investment, and | 362 |
provided the average net earnings
available for fixed charges of | 363 |
such lessee under division (L)(2)
of this section for not less | 364 |
than five fiscal years preceding
such investment have been at | 365 |
least one and one-half times average
fixed charges for that period | 366 |
and during either of the last two
years of such period, the net | 367 |
earnings available for fixed
charges shall have been not less than | 368 |
one and one-half times
fixed charges for such year, except that | 369 |
railroad companies and
utility companies may qualify as lessees | 370 |
herein by application of
the earnings test provided for railroads | 371 |
under division (J)(1) of
this section and for utilities under | 372 |
division (J)(4) of this
section; and (c) a first lien on the | 373 |
interest of the lessor in
the unencumbered property so leased | 374 |
shall be obtained as
additional security for the indebtedness; | 375 |
(M) In ground rents, land trust certificates, or fee | 376 |
ownership certificates representing or evidencing beneficial | 377 |
ownership of or interest in improved real estate under lease for | 378 |
not less than twenty-five years from the date of such lease, in | 379 |
which it must be provided that the lessee shall pay all taxes and | 380 |
assessments levied on or assessed against said real estate, shall | 381 |
maintain the improvements on the real estate in good repair, and | 382 |
shall provide and maintain fire insurance in an amount equal to | 383 |
the insurable value of the building on the real estate; provided: | 384 |
(1) The value of the land and improvements shall be | 385 |
evidenced by an appraisement made under oath by a disinterested | 386 |
appraiser resident in and the owner of real estate in the city in | 387 |
which the property is situated, and such appraisement shall not
be | 388 |
less than one and sixty-seven hundredths times the amount of
such | 389 |
land trust certificates, which amount shall be not less than | 390 |
twenty times the net annual rental distributable to holders of | 391 |
outstanding certificates; | 392 |
(2) Such beneficial interests shall only be in properties
on | 393 |
which actual earning records for five years immediately
preceding | 394 |
are available; | 395 |
(3) Such declaration of trust or other trust instrument | 396 |
shall provide for a depreciation or other similar fund, in an | 397 |
amount which is not less than nine per cent of the net annual | 398 |
distributable rental, for the benefit of the holders of | 399 |
outstanding certificates. | 400 |
(N)(1) In certificates of deposit or other evidence of | 401 |
indebtedness of a savings and loan association provided
the | 402 |
certificates or other evidence of deposit are insured pursuant to | 403 |
the
"Financial Institutions Reform, Recovery, and Enforcement Act | 404 |
of 1989," 103
Stat. 183, 12 U.S.C.A. 1811, as amended; | 405 |
(2) In interest-bearing obligations, including savings | 406 |
accounts and time certificates of deposit of a national bank or | 407 |
state bank provided such bank is a member of the federal deposit | 408 |
insurance corporation created pursuant to the "Banking Act of | 409 |
1933," 92 Stat. 624, 12 U.S.C.A. 624, as amended. | 410 |
(O) In obligations issued, assumed, or guaranteed by the | 411 |
international
finance corporation or by the
international bank for | 412 |
reconstruction and development, the Asian
development bank, the | 413 |
inter-American development bank, the
African development bank, or | 414 |
other similar development bank in
which the president, as | 415 |
authorized by congress and on behalf of
the United States, has | 416 |
accepted membership; | 417 |
(P)(1) In the preferred stocks of any company organized | 418 |
under the laws of the United States or of any state thereof | 419 |
engaged directly and primarily in the production and sale of, or | 420 |
in the purchase and sale of electricity or gas, or in the | 421 |
operation of telephone or telegraph systems or water works, or in | 422 |
some combination of them, if the average annual net earnings of | 423 |
such company, for not less than five fiscal years preceding | 424 |
purchase thereof, after deduction of interest on all mortgages, | 425 |
bonds, debentures, and funded debts and after deduction of the | 426 |
proper charges for replacements, depreciation, and obsolescence, | 427 |
have been at least two times the average yearly amount which is | 428 |
required to pay the dividends or distributions on all preferred | 429 |
stocks; and in which the mortgages, bonds, debentures, funded | 430 |
debts, and preferred stocks shall not in the aggregate exceed | 431 |
seventy per cent of the total capitalization of such company, | 432 |
including mortgages, bonds, debentures, funded debts, and | 433 |
preferred and common stocks; | 434 |
(2) In the preferred stocks of any other company organized | 435 |
under the laws of the United States, or of any state thereof if | 436 |
the average annual net earnings of such company for a period of | 437 |
not less than five fiscal years preceding purchase thereof, after | 438 |
deduction of interest on all mortgages, bonds, debentures, and | 439 |
funded debts and after deduction of the proper charges for | 440 |
replacements, depreciation, and obsolescence, have been at least | 441 |
four times the amount which is required to pay the dividends or | 442 |
distributions on all preferred stocks, and in which the
mortgages, | 443 |
bonds, debentures, funded debts, and preferred stocks
shall not in | 444 |
the aggregate exceed sixty per cent of the total
capitalization of | 445 |
such company, including mortgages, bonds,
debentures, funded | 446 |
debts, and preferred and common stocks; | 447 |
(3) A domestic life insurance company shall not purchase
any | 448 |
preferred stocks when the total market values of such stocks
then | 449 |
owned with those purchased exceed in the aggregate of book
values | 450 |
and purchase price the capital, surplus, and contingency
funds, | 451 |
excluding all reserves required by law, of such company on
the | 452 |
thirty-first day of December preceding the date of such
purchase, | 453 |
or contemplated purchase, provided that in case of
appreciations | 454 |
in values of stocks owned the cost rather than the
market values | 455 |
shall be used in arriving at such aggregate; the
purpose being to | 456 |
restrict the investments of such company in all
preferred stocks | 457 |
to capital, surplus, and contingency funds. | 458 |
(4) In the bonds, notes, debentures, or other evidences of | 459 |
indebtedness of a solvent corporation,
trust, partnership, or | 460 |
similar business entity existing under the
laws of the United | 461 |
States, of any state thereof, the Commonwealth
of Puerto Rico, or | 462 |
Canada or any province of Canada, provided
that either: | 463 |
(a) The bonds, notes, debentures, or other evidences of | 464 |
indebtedness
of such corporation, trust, partnership, or similar | 465 |
business
entity are rated 1 or 2 by the securities valuation | 466 |
office of the national
association of insurance commissioners; | 467 |
(b) The corporation, trust,
partnership, or similar business | 468 |
entity has not defaulted in payment of
interest or principal on | 469 |
any of its bonds, notes, debentures, or other
evidences of | 470 |
indebtedness during the five years immediately
preceding the date | 471 |
of purchase, and
the average annual net earnings of such | 472 |
corporation, trust,
partnership, or similar business entity that | 473 |
are available for fixed
charges for not
less than five fiscal | 474 |
years preceding such purchase have been at
least one and one-half | 475 |
times the average fixed
charges of such corporation, trust, | 476 |
partnership, or similar business
entity for that period and during | 477 |
either of the last two years
of such period, the net earnings | 478 |
available for fixed charges
shall have been not less than one and | 479 |
one-half times
the fixed charges of such corporation, trust, | 480 |
partnership, or
similar business entity for such year. | 481 |
(5) In common stocks or shares of any solvent incorporated | 482 |
company organized under the laws of the United States, or of any | 483 |
state, district, or territory thereof, or the Commonwealth of | 484 |
Puerto Rico, provided that a dividend or distribution has been | 485 |
paid by the
corporation in the preceding twelve months upon such | 486 |
stock to be purchased, or
that such corporation, together with its | 487 |
predecessor corporation or
corporations, has been in existence for | 488 |
a period of at least five years.
No domestic company shall invest | 489 |
in common stock or
shares under divisions (P)(5) and (R) of this | 490 |
section a sum exceeding in the aggregate ten per cent of its | 491 |
admitted assets on the preceding thirty-first day of December. | 492 |
(6) In the stocks
or limited liability company membership | 493 |
interests of insurance
corporations, financial
corporations, | 494 |
investment
corporations, and investment management companies, | 495 |
which investment
management companies are registered with the | 496 |
securities and exchange
commission under the "Investment Company | 497 |
Act of
1940," 54 Stat. 789, 15 80a-1, as
amended, except its own | 498 |
stock, but no domestic
life insurance company shall invest in such | 499 |
stocks
or limited liability company membership interests under | 500 |
division
(P)(6) of this section, exclusive of its investments in | 501 |
stocks
or limited liability company membership interests of | 502 |
insurance company subsidiaries or subsidiaries engaged exclusively | 503 |
in the
ownership of insurance company subsidiaries, a sum | 504 |
exceeding the lesser
of fifty per cent of its policyholder surplus | 505 |
or
ten per cent of its admitted assets as of the preceding | 506 |
thirty-first day of
December unless the approval of the | 507 |
superintendent of insurance is first
obtained. Whenever the | 508 |
superintendent has reason to believe that
the retention, | 509 |
investment, or acquisition of the stock
or limited liability | 510 |
company membership interest of any
such
corporation
company | 511 |
substantially lessens competition generally in
the business of | 512 |
insurance or creates a monopoly therein the
superintendent shall | 513 |
proceed under section 3901.13 of the Revised Code to cause such | 514 |
domestic insurance company to divest itself of such stock
or | 515 |
limited liability company membership interest. | 516 |
(7)(a) In bonds, notes, debentures, or other evidences of | 517 |
indebtedness issued, assumed, or guaranteed by a solvent | 518 |
corporation, trust,
or partnership formed or existing under the | 519 |
laws of a foreign jurisdiction,
provided each such foreign | 520 |
investment is of the same kind and quality as
United States | 521 |
investments authorized under this section; or
in common or | 522 |
preferred stock or shares of any solvent corporation formed or | 523 |
existing under the laws of a foreign jurisdiction provided each | 524 |
such foreign
investment is of the same kind and quality as United | 525 |
States
investments authorized under this section; or in bonds or | 526 |
other evidences of
indebtedness issued, assumed, or guaranteed by | 527 |
a foreign jurisdiction. | 528 |
An insurer shall not invest in foreign investments under | 529 |
division
(P)(7) of this section, including investments
denominated | 530 |
in foreign currency, a sum exceeding in the aggregate fifteen per | 531 |
cent of its admitted assets as of the preceding thirty-first day | 532 |
of
December. The aggregate amount of investments held by an | 533 |
insurer in
a single foreign jurisdiction shall not exceed three | 534 |
per cent of its admitted
assets as of the preceding thirty-first | 535 |
day of December. | 536 |
As used in division (P)(7)(a) of this section,
"foreign | 537 |
jurisdiction" means a jurisdiction outside the United
States, | 538 |
Puerto Rico, or canada, whose
bonds are rated 1 by the securities | 539 |
valuation office of the national
association of insurance | 540 |
commissioners. | 541 |
(b) An insurer may acquire investments denominated in | 542 |
foreign
currency whether or not they are foreign investments. | 543 |
An insurer shall not invest in investments denominated in | 544 |
foreign currency
a sum exceeding in the aggregate ten per cent of | 545 |
its admitted assets as of the
preceding thirty-first day of | 546 |
December. The aggregate amount of
investments denominated in a | 547 |
single foreign currency held by an insurer shall
not exceed three | 548 |
per cent of an insurer's admitted assets as of the preceding | 549 |
thirty-first day of December. | 550 |
(c) As used in division (P)(7) of this section,
"foreign | 551 |
currency" means a currency other than that of the United
States. | 552 |
(8) An insurer may invest without limitation in investments | 553 |
of government
money market funds. As used in division (P)(8) of | 554 |
this section,
"government money market fund" means a mutual fund | 555 |
that at all times invests
in obligations issued, guaranteed, or | 556 |
insured by the federal government of the
United States, or | 557 |
collateralized repurchase agreements
comprised of these | 558 |
obligations, and that qualifies for investment without a
reserve | 559 |
pursuant to the purposes and procedures of the securities | 560 |
valuation
office of the national association of insurance | 561 |
commissioners. | 562 |
(Q) In loans upon the pledge of any securities in which
such | 563 |
companies are authorized by this section to invest, provided
that | 564 |
any loan upon such a pledge shall not exceed eighty per cent
of | 565 |
the cash market value of the collateral at the time of the
making | 566 |
of such loan and at the end of each twelve-month period | 567 |
thereafter, and such company, through the collateral pledged to | 568 |
it, shall not exceed the amounts which it may, under this
section, | 569 |
invest in one corporation so that, in the stocks and
securities | 570 |
which may be owned and those which are pledged to it,
the | 571 |
limitations in this section might be indirectly evaded; | 572 |
(R)(1) Any domestic legal reserve life insurance company
may | 573 |
loan or invest its funds, to an extent not exceeding in the | 574 |
aggregate five per cent of its total admitted assets, in loans or | 575 |
investments not permitted under this section. Any such company | 576 |
may also invest up to an additional five per cent of its total | 577 |
admitted assets, in loans or investments in small businesses | 578 |
having more than half of their assets or employees in this state | 579 |
and in venture capital firms having an office within this state, | 580 |
provided that, as a condition of a company making an investment
in | 581 |
a venture capital firm, the firm must agree to use its best | 582 |
efforts to make investments, in an aggregate amount at least
equal | 583 |
to the investment to be made by the company in that venture | 584 |
capital firm, in small businesses having their principal offices | 585 |
within this state and having either more than one-half of their | 586 |
assets within this state or more than one-half of their employees | 587 |
employed within this state. | 588 |
As used in division (R) of this section: | 589 |
(a) "Small businesses" means any corporation, partnership, | 590 |
proprietorship, or other entity that either does not have more | 591 |
than four hundred employees, or would qualify as a small business | 592 |
for the purpose of receiving financial assistance from small | 593 |
business investment companies licensed under the "Small Business | 594 |
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as | 595 |
amended, and rules of the small business administration. | 596 |
(b) "Venture capital firms" means any corporation, | 597 |
partnership, proprietorship, or other entity, the principal | 598 |
business of which is or will be the making of investments in
small | 599 |
businesses. | 600 |
(c) "Investments" means any equity investment, including | 601 |
limited partnership interests and other equity interests in which | 602 |
liability is limited to the amount of the investment, but does
not | 603 |
include general partnership interests or other interests
involving | 604 |
general liability. | 605 |
(2) In the event that, subsequent to being made under | 606 |
provisions of division (R) of this section, an investment is | 607 |
determined to
have become qualified as an investment for a | 608 |
domestic life
insurance company as provided for in this section, | 609 |
the company
may consider such investment as held under the | 610 |
applicable
provisions of the foregoing divisions (A) to (Q) of | 611 |
this section
and such investment shall no longer be considered as | 612 |
having been
made under the provisions of this division. | 613 |
(S)(1) No domestic life insurance company shall subscribe
to | 614 |
or participate in any underwriting for the purchase or sale of | 615 |
securities or property, nor shall it enter into any such | 616 |
transaction for purchase or sale on account of said company | 617 |
jointly with any other person, nor shall any such company enter | 618 |
into any agreement to withhold from sale any of its property, but | 619 |
the disposition of its property shall be at all times within the | 620 |
control of its board of directors. Nothing contained in
division | 621 |
(S)(1) of this section shall be construed to invalidate
or | 622 |
prohibit an agreement by an insurance company for the purchase
for | 623 |
its own account of an entire issue of the securities of a | 624 |
corporation or to invalidate or prohibit an agreement by an | 625 |
insurance company and one or more other investors to join and | 626 |
share in the purchase of investments for their individual
accounts | 627 |
and for bona fide investment purposes. | 628 |
(2) In the determination of capitalization in this section | 629 |
the value of all bonds, debentures, and funded debts, and | 630 |
nonconvertible or nonparticipating preferred stocks shall be | 631 |
figured at par. Participating or convertible preferred shares | 632 |
shall be figured at par or market on the preceding thirty-first | 633 |
day of December, whichever is higher, and the value of all common | 634 |
shares shall be figured at the market on the preceding | 635 |
thirty-first day of December. | 636 |
(3) As used in this section: | 637 |
(a) "Funded debt" means all interest-bearing obligations | 638 |
maturing in more than one year from their issuance and all | 639 |
guaranteed or assumed interest-bearing obligations or stock. | 640 |
Securities or stock of a corporation pledged to secure other | 641 |
funded debt of the corporation are not included in the funded | 642 |
debt. | 643 |
(b) "Fixed charges" include actual interest incurred in
each | 644 |
year on funded and unfunded debt and annual apportionment of
debt | 645 |
discount or premium. Where interest is partially or
entirely | 646 |
contingent upon earnings, "fixed charges" include
contingent | 647 |
interest payments. | 648 |
(c) "Net earnings available for fixed charges" means
income | 649 |
after deducting operating and maintenance expenses, taxes
other | 650 |
than income taxes, depreciation, and depletion.
Extraordinary, | 651 |
nonrecurring items of income or expense shall be
excluded. | 652 |
(4) Except as provided in a plan of mutualization adopted | 653 |
pursuant to the provisions of sections 3913.01 to 3913.10 of the | 654 |
Revised Code, no domestic life insurance company may invest in or | 655 |
loan upon its own stock, either directly or indirectly. | 656 |
(5) If the investments of any domestic life insurance | 657 |
company are at the time of the making thereof or on October 13, | 658 |
1953, otherwise than as authorized in this section, such | 659 |
investments shall not be admitted or accepted as authorized | 660 |
investments for such company. | 661 |
(6) Any earnings test provided for in this section shall
be | 662 |
deemed to have been met if the requirements of such earnings
test | 663 |
are met by any company which assumes or guarantees the
investment | 664 |
or which assumes or guarantees the performance of any
lease which | 665 |
is the security for the investment. In applying any
such earnings | 666 |
test, the operations of a company's predecessor
companies, if any, | 667 |
for the stipulated period shall be included. | 668 |
(7) No domestic life insurance company shall at any time | 669 |
have invested in or loaned upon the security of the obligations, | 670 |
property, or securities of a particular corporation, trust, | 671 |
partnership, or similar business entity a sum exceeding the | 672 |
greater of two
per cent of its admitted assets as
of the preceding | 673 |
thirty-first day of December or twenty-five per
cent of that | 674 |
portion of its capital and surplus, or its surplus
in the case of | 675 |
a mutual company, that exceeds the minimum
required capital and | 676 |
surplus under section 3907.05 of the Revised
Code unless the | 677 |
approval of the superintendent of insurance is
first obtained.
The | 678 |
restrictions of division (S)(7) of this section do not
apply
to | 679 |
divisions (C), (F), (G), (H), (P)(6), and (R) of this
section
or | 680 |
to any valid obligation issued, assumed, or guaranteed
by the | 681 |
United States, or any state thereof, the Commonwealth of
Puerto | 682 |
Rico, the District of Columbia, or Canada or any province
of | 683 |
Canada. For purposes of division (S)(7) of this section, such | 684 |
company
may, at its option, consider either the lessor or the | 685 |
lessee
under division (L) of this section to be the person to whom | 686 |
any
such investment or loan is made. | 687 |
(8) This section does not affect the propriety or legality | 688 |
of an investment made by a domestic life insurance company which | 689 |
was in accordance with the laws in force at the time of the
making | 690 |
of the investment. | 691 |
Sec. 3925.08. Funds accumulated in the course of
business, | 692 |
or surplus money above the capital stock, of any
company organized | 693 |
under any law of this state, for the purpose
provided in section | 694 |
3925.01 of the Revised Code, shall only be
loaned or invested in | 695 |
the securities listed in sections 3925.05
and 3925.06 of the | 696 |
Revised Code, or in the following: | 697 |
(A)(1) Bonds and mortgages on unencumbered real estate | 698 |
within this or any other state worth twenty-five per cent more | 699 |
than the sum loaned thereon, exclusive of buildings, unless such | 700 |
buildings are insured in some company authorized to do business
in | 701 |
this state, and the policy is transferred to the company
making | 702 |
the investment; or, in lieu of transferring such policies,
the | 703 |
mortgagee may purchase a policy or policies of mortgage
protection | 704 |
insurance, payable to the mortgagee or a trustee in
its behalf, | 705 |
insuring the mortgagee against loss resulting from
the failure of | 706 |
the mortgagor to acquire and maintain, from such
an authorized | 707 |
insurance company, insurance in the amount required
by this | 708 |
section; | 709 |
(2) Bonds or notes secured by mortgages insured by the | 710 |
federal housing administrator; | 711 |
(3) Loans to veterans guaranteed in whole or in part by
the | 712 |
United States pursuant to Title III of the "Servicemen's | 713 |
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C. 693, as | 714 |
amended, provided such guaranteed loans are liens upon real | 715 |
estate. | 716 |
(B)(1) Legally authorized and executed bonds, notes, | 717 |
warrants, and securities which are the direct obligation of or
are | 718 |
guaranteed as to both principal and interest by Canada, or
which | 719 |
are the direct obligation of or are guaranteed as to both | 720 |
principal and interest by any province of Canada, or which are
the | 721 |
direct obligation of or are guaranteed as to both principal
and | 722 |
interest by any municipal corporation of Canada having a | 723 |
population of one hundred thousand or more by the latest official | 724 |
census, and which are not in default as to principal or interest; | 725 |
(2) Obligations issued, assumed, or guaranteed by the | 726 |
international finance
corporation or by the
international bank for | 727 |
reconstruction and development, the Asian
development bank, the | 728 |
inter-American development bank, the
African development bank, or | 729 |
similar development bank in which
the president, as authorized by | 730 |
congress and on behalf of the
United States, has accepted | 731 |
membership. | 732 |
(C) Bonds or other evidences of indebtedness, not in
default | 733 |
as to principal or interest, which are valid obligations
issued, | 734 |
assumed, or guaranteed by the United States, by any state
thereof, | 735 |
the Commonwealth of Puerto Rico, by any territory or
insular | 736 |
possession of the United States, or by the District of
Columbia, | 737 |
or which are valid obligations issued, assumed, or
guaranteed by | 738 |
any county, municipal corporation, district, or
political | 739 |
subdivision, or by any civil division or public
instrumentality of | 740 |
such governmental units, if by statutory or
other legal | 741 |
requirements such obligations are payable, as to both
principal | 742 |
and interest, from taxes levied upon all taxable
property within | 743 |
the jurisdiction of such governmental unit, or in
bonds or other | 744 |
obligations issued by or for account of any such
governmental unit | 745 |
having a population of five thousand or more by
the latest | 746 |
official federal or state census, which are payable as
to both | 747 |
principal and interest from revenues or earnings from the
whole or | 748 |
any part of a publicly owned utility, provided that by
statute or | 749 |
other applicable legal requirements, rates from the
service or | 750 |
operation of such utility must be fixed, maintained,
and collected | 751 |
at all times so as to produce sufficient revenues
or earnings to | 752 |
pay both principal and interest of such bonds or
obligations as | 753 |
they become due, and in any bonds or obligations
issued or | 754 |
guaranteed by the United States, any state, the
District of | 755 |
Columbia, the Commonwealth of Puerto Rico, any
county, municipal | 756 |
corporation, district, political subdivision,
civil division, | 757 |
commission, board, authority, agency, or other
instrumentality of | 758 |
one or more of them, provided there is a
specific pledge of | 759 |
revenues, earnings, or other adequate security
and provided that | 760 |
no prior or parity obligation of the same
issuer, payable from | 761 |
revenues or earnings from the same source,
has been in default as | 762 |
to principal or interest during the five
years next preceding the | 763 |
date of such investment, but such issuer
need not have been in | 764 |
existence for that period, and obligations
acquired under this | 765 |
section may be newly issued, and further
provided that there is | 766 |
adequate provision for payment of expenses
of operation and | 767 |
maintenance and the principal and interest on
all obligations when | 768 |
due; | 769 |
(D)(1) Bonds or other evidences of indebtedness, bearing
or | 770 |
accruing interest, issued, assumed, or guaranteed by any solvent | 771 |
corporation, trust, partnership, or similar business entity | 772 |
organized and existing under the laws of this or any other state, | 773 |
or of the
United States, the Commonwealth of Puerto Rico, or of | 774 |
the
District of Columbia, or of Canada or any province of Canada, | 775 |
upon which there is no existing interest or principal
default, | 776 |
provided that either: | 777 |
(a) The bonds or other evidences of indebtedness are rated 1 | 778 |
or 2
by the securities valuation office of the national | 779 |
association of insurance
commissioners; | 780 |
(b) The corporation, together with its predecessor | 781 |
corporation or
corporations, or the trust, partnership, or similar | 782 |
business entity, has been
in existence for a period of at least | 783 |
five years. | 784 |
(2) Stocks
or limited liability company membership interests | 785 |
of any insurance
corporation, financial
corporation, investment | 786 |
corporation, and investment
management
company
companies, which | 787 |
investment management
company is
companies are registered with the | 788 |
securities and exchange commission under the "Investment
Company | 789 |
Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1, as amended,
except | 790 |
its own stock, and stocks
or limited liability company membership | 791 |
interests, bonds, notes, and
debentures of any
corporation
company | 792 |
which is organized for, and limited
in its operations to, the | 793 |
financing of insurance premiums, upon
approval of such investments | 794 |
by the superintendent of insurance;
except that approval shall not | 795 |
be required for the purchase of
the outstanding stocks
or limited | 796 |
liability company membership interests of any such
corporation | 797 |
company, if investment
in each such
corporation
company does not | 798 |
exceed in the
aggregate two and one-half per
cent of the total | 799 |
admitted assets of the company making the
investment as of the | 800 |
preceding thirty-first day of December.
Whenever the | 801 |
superintendent has reason to believe that the
retention, | 802 |
investment, or acquisition of the stock
or limited liability | 803 |
company membership interest of any such
corporation
company | 804 |
substantially lessens competition generally in the
business of | 805 |
insurance or creates a monopoly therein
he
the
superintendent | 806 |
shall
proceed under section 3901.13 of the Revised Code to cause | 807 |
such
domestic insurance company to divest itself of such stock
or | 808 |
limited liability company membership interest. | 809 |
(3) Other stocks of any solvent corporation organized
under | 810 |
the laws of this or any other state, or of the United
States, or | 811 |
of the District of Columbia, or of Canada or any
province of | 812 |
Canada, provided that a dividend or distribution has
been paid by | 813 |
the corporation in the preceding twelve months upon
the stock to | 814 |
be purchased or such corporation, together with its
predecessor | 815 |
corporation or corporations, has been in existence for a period of | 816 |
at least five years. | 817 |
(4) A domestic company may acquire, hold, and convey | 818 |
tangible personal property or interests therein for the
production | 819 |
of income, provided no domestic company shall invest
in excess of | 820 |
two per cent of its admitted assets as of the
preceding | 821 |
thirty-first day of December under this division. | 822 |
(5) In equipment trust obligations or certificates,
security | 823 |
agreements, or other evidences of indebtedness entered
into | 824 |
directly or guaranteed by any company operating wholly or
partly | 825 |
within the United States or Canada, provided
that such debt | 826 |
obligation is secured by a first lien on tangible personal | 827 |
property which is purchased or secured for payment thereof and | 828 |
such debt
obligation is repayable within twenty years from the | 829 |
date of issue in
annual, semiannual, or more frequent installments | 830 |
beginning not later than
the first year after such date. | 831 |
(6) An insurer may invest without limitation in investments | 832 |
of
government money market funds. As used in division (D)(6) of | 833 |
this
section, "government money market fund" means a fund that at | 834 |
all times invests
in obligations issued, guaranteed, or insured by | 835 |
the federal government of the
United States or collateralized | 836 |
repurchase agreements
comprised of such obligations, and that | 837 |
qualifies for investment without a
reserve pursuant to the | 838 |
purposes and procedures of the securities valuation
office of the | 839 |
national association of insurance commissioners. | 840 |
(E) Negotiable promissory notes maturing in not more than | 841 |
six months from the date thereof, secured by collateral security | 842 |
through the transfer of any of the classes of securities
described | 843 |
in this section or in sections 3925.05 and 3925.06 of
the Revised | 844 |
Code, with absolute power of sale within twenty days
after default | 845 |
in payment at maturity; | 846 |
(F)(1) Repurchase agreements with, and interest-bearing | 847 |
obligations, including savings accounts and time certificates of | 848 |
deposit of, a national bank of the United States, a commonwealth | 849 |
bank of Puerto Rico, a chartered bank of Canada, or a state bank, | 850 |
provided such bank is either a member of the federal deposit | 851 |
insurance corporation created pursuant to the "Banking Act of | 852 |
1933," as amended, or the Canada deposit insurance corporation | 853 |
created pursuant to the act of parliament known as the "Canada | 854 |
Deposit Insurance Corporation Act," as amended. | 855 |
(2) Certificates of deposit, savings share accounts, | 856 |
investment share accounts, stock deposits, stock certificates, or | 857 |
other evidences of indebtedness of a savings and loan association, | 858 |
provided
all such
evidences of indebtedness are insured pursuant | 859 |
to the "Financial Institutions
Reform, Recovery, and Enforcement | 860 |
Act of 1989," 103 Stat. 183, 12 U.S.C.A.
1811, as amended; | 861 |
(3) Bankers' acceptances and bills of exchange of the
kinds | 862 |
and maturities made eligible by law for rediscount with the | 863 |
federal reserve banks, provided that the same are accepted by a | 864 |
bank or trust company incorporated under the laws of the United | 865 |
States or of this state or any other bank or trust company which | 866 |
is a member of the federal reserve system. | 867 |
(G) Any securities issued as a result of any
reorganization, | 868 |
or capital or debt adjustment, in whole or in
part, in exchange | 869 |
for securities acquired by it prior to such
reorganization, or | 870 |
capital or debt adjustment; | 871 |
(H)(1) In bonds, notes, debentures, or other evidences of | 872 |
indebtedness
issued, assumed, or guaranteed by a solvent | 873 |
corporation, trust, or partnership
formed or existing under the | 874 |
laws of a foreign jurisdiction, provided each such
foreign | 875 |
investment is of the same kind and quality as United
States | 876 |
investments authorized under this section; or in common or | 877 |
preferred stock or shares of any solvent corporation formed or | 878 |
existing under
the laws of a foreign jurisdiction, provided each | 879 |
such foreign investment is of
the same kind and quality as United | 880 |
States investments
authorized under this section; or in bonds or | 881 |
other evidences of indebtedness
issued, assumed, or guaranteed by | 882 |
a foreign jurisdiction. | 883 |
An insurer shall not invest in foreign investments under | 884 |
division
(H) of this section, including investments denominated in | 885 |
foreign
currency, a sum exceeding in the aggregate fifteen per | 886 |
cent of its admitted
assets as of the preceding thirty-first day | 887 |
of December. The
aggregate amount of investments held by an | 888 |
insurer in a single foreign
jurisdiction shall not exceed three | 889 |
per cent of its admitted assets as of the
preceding thirty-first | 890 |
day of December. | 891 |
As used in division (H)(1) of this section, "foreign | 892 |
jurisdiction"
means a jurisdiction outside the United States, | 893 |
Puerto Rico, or Canada whose bonds are rated 1 by
the securities | 894 |
valuation office of the national association of insurance | 895 |
commissioners. | 896 |
(2) An insurer may acquire investments denominated in | 897 |
foreign currency
whether or not they are foreign investments. | 898 |
An insurer shall not invest in investments denominated in | 899 |
foreign currency
a sum exceeding in the aggregate ten per cent of | 900 |
its admitted assets as of the
preceding thirty-first day of | 901 |
December. The aggregate amount of
investments denominated in a | 902 |
single foreign currency held by an insurer shall
not exceed three | 903 |
per cent of an insurer's admitted assets as of the preceding | 904 |
thirty-first day of December. | 905 |
(3) As used in division (H) of this section, "foreign | 906 |
currency"
means a currency other than that of the United States. | 907 |
(I)(1) Any securities or other property not permitted
under | 908 |
section 3925.05, 3925.06, 3925.08, or 3925.20 of the
Revised Code | 909 |
to an extent not exceeding in the aggregate six per
cent of the | 910 |
total admitted assets of such company on the
preceding | 911 |
thirty-first day of December, within the limitations
prescribed in | 912 |
division (J) of this section. Any such company may
also invest up | 913 |
to an additional five per cent of the total
admitted assets of | 914 |
such company on the preceding thirty-first day
of December, within | 915 |
the limitations prescribed in division
(J) of this section, in | 916 |
loans or investments in small
businesses having
more than half of | 917 |
their assets or employees in this state and in
venture capital | 918 |
firms having an office within this state,
provided that, as a | 919 |
condition of a company making an investment
in a venture capital | 920 |
firm, the firm must agree to use its best
efforts to make | 921 |
investments, in an aggregate amount at least
equal to the | 922 |
investment to be made by the company in that venture
capital firm, | 923 |
in small businesses having their principal offices
within this | 924 |
state and having either more than one-half of their
assets within | 925 |
this state or more than one-half of their employees
employed | 926 |
within this state. | 927 |
As used in division (I) of this section: | 928 |
(a) "Small businesses" means any corporation, partnership, | 929 |
proprietorship, or other entity that either does not have more | 930 |
than four hundred employees, or would qualify as a small business | 931 |
for the purpose of receiving financial assistance from small | 932 |
business investment companies licensed under the "Small Business | 933 |
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as | 934 |
amended, and rules of the small business administration. | 935 |
(b) "Venture capital firms" means any corporation, | 936 |
partnership, proprietorship, or other entity, the principal | 937 |
business of which is or will be the making of investments in
small | 938 |
businesses. | 939 |
(c) "Investments" means any equity investment, including | 940 |
limited partnership interests and other equity interests in which | 941 |
liability is limited to the amount of the investment, but does
not | 942 |
include general partnership interests or other interests
involving | 943 |
general liability. | 944 |
(2) In the event that, subsequent to being made under this | 945 |
division, a loan or investment is determined to have become | 946 |
qualified as a loan or investment under any of the divisions (A) | 947 |
to (F) of this section or under section 3925.05, 3925.06, or | 948 |
3925.20 of the Revised Code, the company may consider such loan
or | 949 |
investment as held under such other statutory provision and
such | 950 |
loan or investment shall no longer be considered as having
been | 951 |
made under this division. | 952 |
(J) No domestic insurance company shall at any time have | 953 |
invested a sum exceeding five per cent of its admitted assets as | 954 |
of the preceding thirty-first day of December in the bonds,
notes, | 955 |
debentures, other evidences of indebtedness, and stocks
of a | 956 |
particular corporation, trust, partnership, or similar business | 957 |
entity, except
for investments authorized under divisions (A) and | 958 |
(D)(2) of this
section, and no domestic insurance company together | 959 |
with its
subsidiary, if any, shall at any time own directly or | 960 |
indirectly
more than twenty-five per cent of the outstanding | 961 |
bonds, notes,
debentures, other evidences of indebtedness, and | 962 |
stocks of any
corporation, except for investments
authorized under | 963 |
divisions (A) and (D)(2) of this section. | 964 |
This section does not affect the propriety or legality of
an | 965 |
investment made by such domestic insurance company which was
in | 966 |
accordance with the laws in force at the time of the making of
the | 967 |
investment. | 968 |
Section 2. That existing sections 3901.64, 3903.32, 3907.14, | 969 |
and 3925.08 of the
Revised Code are hereby repealed. | 970 |
|
|