Senate File 320 - Introduced SENATE FILE 320 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 1086) A BILL FOR An Act relating to life insurance company or association cash 1 reinvestments in repurchase agreements collateralized by 2 securities, and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1781SV (1) 89 ko/rn

S.F. 320 Section 1. Section 511.8, subsection 23, paragraph c, Code 1 2021, is amended to read as follows: 2 c. If the loan is collateralized by cash or cash 3 equivalents, the cash or cash equivalent collateral may be 4 reinvested by the life insurance company or association in 5 rule 2a-7 money market funds as defined in subsection 24 , 6 individual securities which are eligible for inclusion in the 7 legal reserve of the life insurance company or association, 8 or in repurchase agreements fully collateralized by such 9 securities if the life insurance company or association takes 10 delivery of the collateral either directly or through an 11 authorized custodian or pooled fund comprised of individual 12 securities which are eligible for inclusion in the legal 13 reserve of the life insurance company or association. If such 14 reinvestment is made in individual securities , or in repurchase 15 agreements collateralized by securities other than United 16 States government obligations as described in subsection 1 , the 17 individual securities or the securities which collateralize the 18 repurchase agreements shall mature in less than two hundred 19 seventy days. If such reinvestment is made in a pooled fund, 20 the average maturity of the securities comprising such pooled 21 fund must be one hundred eighty days or less and the individual 22 maturities of the securities comprising such pooled fund 23 must be three hundred ninety-seven days or less. Individual 24 securities and securities comprising the pooled fund shall 25 be investment grade. As used in this paragraph, “maturity” 26 means the earlier of the fixed date on which the holder of 27 the security is unconditionally entitled to receive principal 28 and interest in full or the date on which the holder of the 29 security is unconditionally entitled upon demand to receive 30 principal and interest in full. 31 Sec. 2. APPLICABILITY. This Act applies to cash or cash 32 equivalent reinvestments by a life insurance company or 33 association made in repurchase agreements collateralized by 34 securities on or after January 1, 2022. 35 -1- LSB 1781SV (1) 89 ko/rn 1/ 2

S.F. 320 EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill allows life insurance companies and associations 4 to reinvest cash or cash equivalent collateral for loans 5 from securities held in their legal reserves in repurchase 6 agreements collateralized by securities in United States 7 government obligations maturing in 270 days or more. Under 8 current law, all securities that collateralize repurchase 9 agreements must mature in less than 270 days. “United States 10 government obligations” is described in the bill. 11 The bill applies to cash or cash equivalent reinvestments, 12 by life insurance companies and associations, made in 13 repurchase agreements collateralized by securities, on or after 14 January 1, 2022. 15 -2- LSB 1781SV (1) 89 ko/rn 2/ 2