HCS HB 1567 -- INSURANCE COMPANY INVESTMENTS

SPONSOR:  Luetkenhaus

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
by a vote of 15 to 0.

This bill allows insurance companies to invest in a wider
assortment of financial instruments, including derivative
instruments.  These investments are limited to various
percentages of the insurance company's assets, depending on the
type of financial instrument, and must fall within guidelines
established by the National Association of Insurance
Commissioners.  The Director of the Department of Insurance may
promulgate reasonable rules and regulations to enforce the law,
including financial solvency standards, valuation standards, and
reporting requirements.

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that the investment instruments
proposed in the bill will allow insurance companies to reduce the
risk they now bear in their investments.  The Department of
Insurance will have oversight of the use of "derivative
instruments," which cannot be used to increase any investment
risks.  It will, however, increase efficiency through investment-
pooling and, in general, will modernize the state's investment
laws.  The language is based upon guidelines approved by the
National Association of Insurance Commissioners.

Testifying for the bill were Representative Luetkenhaus;
Metropolitan Life Insurance Company; and Department of Insurance.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
Last Updated October 11, 2002 at 9:01 am