75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 2842
 
                         House Bill 2793
 
Sponsored by COMMITTEE ON CONSUMER PROTECTION
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Limits insurance company investments in stocks by aggregate
amount and type. Prescribes phase-in period for new limitations.
 
                        A BILL FOR AN ACT
Relating to insurance company investments; creating new
  provisions; and amending ORS 733.620.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 733.620 is amended to read:
  733.620. (1) Funds of an insurer may be invested in stocks
(including trust certificates) of solvent corporations organized
and carrying on a business under the laws of a sovereign as
follows:
  (a) Preferred or guaranteed stocks if the corporation is not in
default or arrears as to any preferred or guaranteed dividend and
has continuously and regularly paid such dividends during the
preceding three years or has paid cash dividends for five years
on common stock.
  (b) Common stocks as provided in paragraph (c) of this
subsection if:
  (A) The obligations and preferred stock, if any, of such
corporation are eligible for investment under ORS 733.510 to
733.780; and
  (B) The stock is registered on a national securities exchange
regulated under the Securities Exchange Act, or if of a type not
commonly so registered is regularly traded on a broad national or
regional basis.
  (c) Notwithstanding ORS 733.780 (1), not more than   { - 25 - }
 { + 10 + } percent of admitted assets may be in common stocks
that have not paid a cash dividend during each of the five years
preceding the date of acquisition.
  (2) An insurer shall not invest so as to own or control more
than five percent of the voting power outstanding of a
corporation, nor shall it invest in the obligations or stocks of
a corporation if the insurer, directors, trustees and officers
own or control, or as a result thereof shall own and control, in
the aggregate more than 50 percent of the voting power. This
subsection does not apply to limit the amount of an insurer's
assets that may be invested in the voting securities of a
depository institution or any company that controls the
depository institution.
 
   { +  (3) An insurer may not acquire an investment under this
section if, as a result of and after giving effect to the
investment, the aggregate amount of investments then held by the
insurer under this section would exceed the lesser of 20 percent
of the insurer's admitted assets or 100 percent of its surplus to
policyholders. + }
  SECTION 2.  { + (1) An insurer authorized to transact insurance
in this state on the day before the effective date of this 2009
Act that on the effective date of this 2009 Act does not comply
with the limitation on aggregate amount of investments set forth
in ORS 733.620 (3), as amended by section 1 of this 2009 Act,
must comply with the limitation so that the aggregate amount of
investments held by the insurer under ORS 733.620 (3):
  (a) Does not exceed 40 percent of the insurer's total admitted
assets on December 31, 2010;
  (b) Does not exceed 30 percent of the insurer's total admitted
assets on December 31, 2011; and
  (c) Does not exceed the lesser of 20 percent of the insurer's
total admitted assets or 100 percent of its surplus to
policyholders on December 31, 2012.
  (2) An insurer authorized to transact insurance in this state
on the day before the effective date of this 2009 Act that
reapplies for a certificate of authority after having a
certificate of authority revoked for any cause may not be granted
authority to transact any insurance in this state until the
insurer complies with the applicable provisions of ORS 733.620
(3), as amended by section 1 of this 2009 Act. + }
                         ----------