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PARRIS N. GLENDENING, Governor
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S.B. 763
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(5) (i) Except as otherwise required by the Commissioner, each parcel
of fee-simple or improved leasehold real estate held by a life insurer directly or
through a limited partnership under this subsection shall be valued on the books of
the life insurer as of December 31 of each year at an amount that includes a
write-down of the cost of the property, excluding the land cost, but including all
improvements or development costs, at a rate that averages not less than 2% per year
of the cost of the property for each year or part of a year that the property is held.
(ii) The admitted values of each parcel of fee-simple or improved
leasehold real estate held under this subsection may not exceed the depreciated value
of the property.
(6) A life insurer may not count towards its cash reserves any more than
the lesser of:
(i) 75% of the investment value of any limited partnership interest;
and
(ii) 75% of the current book value of that limited partnership
interest.
(7) (i) Interests in limited partnerships under this subsection shall be
valued at the actual cost of the investment adjusted by any additional capital
contributions or capital withdrawals.
(ii) The valuation of a limited partnership interest may not exceed
the life insurer's proportionate share of the equity of the real estate asset owned by
the limited partnership.
(M) THE RESERVE INVESTMENTS OF A LIFE INSURER MAY INCLUDE THOSE
INVESTMENTS PERMITTED UNDER § 5-509 OF THIS SUBTITLE.
(N) (1) THE RESERVE INVESTMENTS OF A LIFE INSURER MAY INCLUDE
SECURITIES LENDING, REPURCHASE, REVERSE REPURCHASE, AND DOLLAR ROLL
TRANSACTIONS WITH BUSINESS ENTITIES, SUBJECT TO THE REQUIREMENTS OF
PARAGRAPHS (2) THROUGH (9) OF THIS SUBSECTION.
(2) THE INSURER'S BOARD OF DIRECTORS SHALL ADOPT A WRITTEN
PLAN THAT SPECIFIES GUIDELINES AND OBJECTIVES TO BE FOLLOWED, SUCH AS:
(I) A DESCRIPTION OF HOW CASH RECEIVED WILL BE INVESTED
OR USED FOR GENERAL CORPORATE PURPOSES OF THE INSURER;
(II) OPERATIONAL PROCEDURES TO MANAGE INTEREST RATE RISK,
COUNTERPARTY DEFAULT RISK, THE CONDITIONS UNDER WHICH PROCEEDS FROM
REVERSE REPURCHASE TRANSACTIONS MAY BE USED IN THE ORDINARY COURSE OF
BUSINESS, AND THE USE OF ACCEPTABLE COLLATERAL IN A MANNER THAT
REFLECTS THE LIQUIDITY NEEDS OF THE TRANSACTION; AND
(III) THE EXTENT TO WHICH THE INSURER MAY ENGAGE IN THESE
TRANSACTIONS.
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- 4137 -
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