Z-0633.1  _______________________________________________

                         SENATE BILL 5605

          _______________________________________________

State of Washington      57th Legislature     2001 Regular Session

By Senators Prentice, Winsley, Gardner and Deccio; by request of Insurance Commissioner

Read first time 01/29/2001.  Referred to Committee on Labor, Commerce & Financial Institutions.

Regulating the investment limits of insurers in noninsurance subsidiaries.

    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 insurance subsidiaries, 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.

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