CERTIFICATION OF ENROLLMENT

HOUSE BILL 1727

57th Legislature

2001 Regular Legislative Session

Passed by the House March 9, 2001

Yeas 98 Nays 0

Speaker of the House of Representatives

Speaker of the House of Representatives

Passed by the Senate April 6, 2001

Yeas 48 Nays 0

CERTIFICATE

We, Timothy A. Martin and Cynthia Zehnder, Co-Chief Clerks of the House of Representatives of the State of Washington, do hereby certify that the attached is HOUSE BILL 1727 as passed by the House of Representatives and the Senate on the dates hereon set forth.

Chief Clerk

President of the Senate

Approved

FILED

Governor of the State of Washington

Secretary of State

State of Washington

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HOUSE BILL 1727

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Passed Legislature - 2001 Regular Session

State of Washington 57th Legislature 2001 Regular Session

By Representatives Roach, Miloscia, Benson and Hatfield; by request of Insurance Commissioner

Read first time 02/01/2001. Referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to the investment limits of insurers in noninsurance subsidiaries; and adding a new section to chapter 48.13 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.13 RCW to read as follows:

(1) Notwithstanding RCW 48.13.220 and 48.13.240, an insurer may not loan or invest its funds in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries in an aggregate amount exceeding the lesser of the following sums: Ten percent of its assets, or fifty percent of its surplus as regards policyholders. In calculating the amount of investments under this section, investments in domestic or foreign subsidiary insurers, health care service contractors, and health maintenance organizations are excluded.

(2) For the purposes of this section, "subsidiary" has the same meaning as in RCW 48.31B.005.