S.F. _____ H.F. _____ Section 1. Section 511.8, subsection 22, paragraph b, 1 subparagraph (2), Code 2022, is amended to read as follows: 2 (2) Be between an insurer and a conduit and be 3 collateralized by cash or obligations which are eligible 4 under subsection 1, 2, 3, 5, 19, or 24 , are deposited with 5 a custodian bank as defined in subsection 21 , and are held 6 under a written agreement with the custodian bank that 7 complies with subsection 21 and provides for the proceeds 8 of the collateral, subject to the terms and conditions of 9 the applicable collateral or other credit support agreement, 10 to be remitted to the legal reserve deposit of the company 11 or association and to vest in the state in accordance with 12 section 508.18 whenever proceedings under that section are 13 instituted. Paragraphs “c” , “d” , and “e” of this subsection are 14 not applicable to investments in financial instruments used in 15 hedging transactions eligible pursuant to this subparagraph. 16 As used in this subparagraph, “conduit” means a person within 17 an insurer’s insurance holding company system, as defined 18 in section 521A.1, subsection 7 , which aggregates hedging 19 transactions by other persons within the insurance holding 20 company system and replicates them with counterparties. 21 Sec. 2. Section 521A.1, Code 2022, is amended by adding the 22 following new subsections: 23 NEW SUBSECTION . 5A. “Group capital calculation instructions” 24 means the most recent instructions adopted by the NAIC group 25 capital calculation working group or its successor, and as 26 published or amended by the NAIC in accordance with procedures 27 adopted by the NAIC. 28 NEW SUBSECTION . 9A. “Liquidity stress test framework” means 29 the most recent NAIC liquidity stress test framework, initially 30 adopted in 2020, for life insurers meeting the scope criteria, 31 and as published or amended by the NAIC in accordance with 32 procedures adopted by the NAIC. 33 NEW SUBSECTION . 9B. “NAIC” means the national association 34 of insurance commissioners. 35 -1- LSB 5164XD (7) 89 ko/rn 1/ 13

S.F. _____ H.F. _____ NEW SUBSECTION . 10A. “Reciprocal jurisdiction” means the 1 same as described in section 521B.102, subsection 6, paragraph 2 “a” , subparagraph (1). 3 NEW SUBSECTION . 11A. “Scope criteria” means the thresholds 4 detailed in the NAIC liquidity stress test framework that are 5 used to establish the life insurer entities that are subject to 6 a liquidity stress test for a specific data year. 7 Sec. 3. Section 521A.3, subsection 2, paragraph a, 8 subparagraph (12), Code 2022, is amended to read as follows: 9 (12) An agreement by the person required to file the 10 statement referred to in subsection 1 that the person will 11 provide the annual enterprise risk report specified in section 12 521A.4, subsection 12 , for so long as control exists. 13 Sec. 4. Section 521A.4, subsections 3 and 12, Code 2022, are 14 amended to read as follows: 15 3. Materiality. Information need not be disclosed on the 16 registration statement filed pursuant to subsection 2 if the 17 information is not material for the purposes of this section 18 subsections 1 through 12 . Unless the commissioner by rule or 19 order provides otherwise, sales, purchases, exchanges, loans or 20 extensions of credit, or investments or guarantees involving 21 one-half of one percent or less of an insurer’s admitted assets 22 as of the next preceding December 31 , are not material for 23 purposes of this section subsections 1 through 12 . 24 12. Enterprise risk report. The ultimate controlling person 25 of every insurer subject to registration shall also file an 26 annual enterprise risk report. The report shall, to the best 27 of the ultimate controlling person’s knowledge and belief, 28 identify the material risks within the insurance holding 29 company system that could pose enterprise risk to the insurer. 30 The report shall be filed with the lead state commissioner 31 of the insurance holding company system as determined by the 32 procedures within the financial analysis handbook adopted by 33 the national association of insurance commissioners NAIC . 34 Sec. 5. Section 521A.4, Code 2022, is amended by adding the 35 -2- LSB 5164XD (7) 89 ko/rn 2/ 13

S.F. _____ H.F. _____ following new subsections: 1 NEW SUBSECTION . 12A. Group capital calculation. 2 a. The ultimate controlling person of every insurer 3 subject to registration shall concurrently file with the 4 registration an annual group capital calculation. The 5 calculation must be completed in accordance with the group 6 capital calculation instructions, and must be filed with the 7 lead state commissioner of the insurance holding company system 8 as determined by the procedures in the most recent financial 9 analysis handbook published by the NAIC. As permitted by 10 the group capital calculation instructions, the lead state 11 commissioner may allow a controlling person, other than 12 the ultimate controlling person, to file the group capital 13 calculation. The following insurance holding company systems 14 are exempt from filing the group capital calculation: 15 (1) An insurance holding company system that has only one 16 insurer within its holding company structure, that only writes 17 business and is only licensed in its domestic state, and that 18 assumes no business from any other insurer. 19 (2) An insurance holding company system that is required to 20 perform a group capital calculation specified by the federal 21 reserve board, if the board is able to share the calculation 22 with the lead state commissioner pursuant to the terms of 23 applicable information sharing agreements. The exemption shall 24 not apply if the board does not share the calculation with the 25 lead state commissioner. 26 (3) An insurance holding company system whose non-United 27 States group-wide supervisor is located within a reciprocal 28 jurisdiction that recognizes the United States’ state 29 regulatory approach to group supervision and group capital. 30 (4) An insurance holding company system that meets all of 31 the following criteria: 32 (a) The system provides information to a lead state that 33 meets the requirements for accreditation under the NAIC 34 financial standards and accreditation program, either directly 35 -3- LSB 5164XD (7) 89 ko/rn 3/ 13

S.F. _____ H.F. _____ or indirectly through the group-wide supervisor who has 1 determined such information is satisfactory to allow the lead 2 state to comply with the group supervision approach as detailed 3 in the most recent financial analysis handbook published by the 4 NAIC. 5 (b) The system’s non-United States’ group-wide supervisor 6 that is not in a reciprocal jurisdiction recognizes and 7 accepts, as established by the commissioner by rule, the group 8 capital calculation as the world-wide group capital assessment 9 for United States’ insurance groups that operate in that 10 jurisdiction. 11 b. Notwithstanding paragraph “a” , subparagraphs (3) and (4), 12 a lead state commissioner, after any necessary consultation 13 with appropriate supervisors or officials, shall require the 14 United States’ operations of any non-United States-based 15 insurance holding company system to file a group capital 16 calculation if the lead state commissioner deems it appropriate 17 for prudential oversight and solvency monitoring purposes, or 18 for ensuring the competitiveness of the insurance marketplace. 19 c. Notwithstanding paragraph “a” , the lead state 20 commissioner shall have the discretion to exempt the ultimate 21 controlling person of an insurer subject to registration from 22 the annual group capital calculation filing requirement, or to 23 allow a limited group capital filing or report in accordance 24 with criteria as established by the commissioner by rule. 25 d. If the lead state commissioner determines that an 26 insurance holding company system no longer satisfies the 27 criteria for exemption under paragraph “a” , subparagraphs (1) 28 through (4), the insurance holding company system shall file 29 the group capital calculation at the next annual filing date, 30 unless for reasonable grounds shown is granted an extension by 31 the lead state commissioner. 32 NEW SUBSECTION . 12B. Liquidity stress test. 33 a. The ultimate controlling person of every insurer 34 subject to registration, and that meets the scope criteria, 35 -4- LSB 5164XD (7) 89 ko/rn 4/ 13

S.F. _____ H.F. _____ shall file the results of a liquidity stress test for each 1 data year that the insurer is subject to the liquidity stress 2 test framework. The filing shall be made to the lead state 3 insurance commissioner of the insurance holding company system 4 as determined by the procedures in the applicable financial 5 analysis handbook published by the NAIC. 6 b. Any change to the NAIC liquidity stress test framework, 7 or to the data year for which the scope criteria is to be 8 measured, shall be effective on January 1 of the calendar year 9 immediately following the calendar year that the change to the 10 liquidity stress test framework or the data year is adopted by 11 the NAIC. 12 c. An insurer that meets at least one threshold of the 13 scope criteria shall be subject to the liquidity stress 14 test framework for the specified data year unless the lead 15 state insurance commissioner, in consultation with the NAIC 16 financial stability task force or its successor, determines 17 that the insurer shall be exempt from the liquidity stress test 18 framework for that data year. An insurer that does not meet 19 at least one threshold of the scope criteria for a specified 20 data year may be subject to the liquidity stress test framework 21 if the lead state insurance commissioner, in consultation with 22 the NAIC financial stability task force or its successor, 23 determines that the insurer shall be subject to the liquidity 24 stress test framework for that data year. 25 d. The performance of, and filing of the results from, a 26 specific year’s liquidity stress test shall comply with all the 27 following: 28 (1) The liquidity stress test framework instructions and 29 reporting template applicable to the corresponding data year. 30 (2) The determinations made by the lead state insurance 31 commissioner, in conjunction with the NAIC’s financial 32 stability task force or its successor, that are provided within 33 the liquidity stress test framework. 34 Sec. 6. Section 521A.7, subsection 1, Code 2022, is amended 35 -5- LSB 5164XD (7) 89 ko/rn 5/ 13

S.F. _____ H.F. _____ to read as follows: 1 1. a. All information, documents, and copies thereof 2 obtained by or disclosed to the commissioner or any other 3 person in the course of an examination or investigation made 4 pursuant to section 521A.6 or 521A.6A , and all information 5 reported or provided to the commissioner pursuant to 6 sections 521A.4 , 521A.5 , 521A.6A , and 521A.6B , shall be given 7 confidential treatment shall be considered a confidential 8 record and be recognized and protected as a trade secret 9 pursuant to section 22.7 , shall not be subject to subpoena, 10 shall not be subject to discovery or admissible in evidence 11 in a private civil action, and shall not be made public by 12 the commissioner or any other person, except to insurance 13 departments of other states, without the prior written 14 consent of the insurer to which it pertains unless the 15 commissioner, after giving the insurer and its affiliates 16 who would be affected thereby, notice and opportunity to 17 be heard, determines that the interests of policyholders, 18 shareholders, or the public will be served by the publication 19 thereof, in which event the commissioner may publish all or 20 any part thereof in such manner as the commissioner may deem 21 appropriate. However, the commissioner is authorized to use 22 the information, documents, or copies obtained by, disclosed 23 to, or reported or provided to the commissioner as described in 24 this subsection , in the furtherance of any regulatory or legal 25 action brought as a part of the commissioner’s official duties. 26 b. Notwithstanding paragraph “a” , the commissioner shall 27 maintain the confidentiality and shall not publish any of the 28 following submitted to the commissioner pursuant to section 29 521A.4, subsection 12A: 30 (1) Group capital calculations. 31 (2) Group capital ratios produced within the group capital 32 calculation. 33 (3) Any group capital information received from an 34 insurance holding company supervised by the federal reserve 35 -6- LSB 5164XD (7) 89 ko/rn 6/ 13

S.F. _____ H.F. _____ board or any United States’ group-wide supervisor. 1 c. Notwithstanding paragraph “a” , the commissioner shall 2 maintain the confidentiality and shall not publish any of the 3 following submitted to the commissioner pursuant to section 4 521A.4, subsection 12B: 5 (1) Liquidity stress test results and supporting 6 documentation. 7 (2) Any liquidity stress test information received from an 8 insurance holding company supervised by the federal reserve 9 board or any non-United States’ group-wide supervisor. 10 Sec. 7. Section 521A.7, subsection 3, Code 2022, is amended 11 by striking the subsection and inserting in lieu thereof the 12 following: 13 3. In order to assist in the performance of the 14 commissioner’s duties, the commissioner: 15 a. May share documents, materials, or other information, 16 including confidential, privileged, and trade secret documents, 17 materials, or information subject to subsection 1, with 18 other state, federal, and international regulatory agencies, 19 the NAIC, any third-party consultants designated by the 20 commissioner, state, federal, and international law enforcement 21 authorities, including members of any supervisory college 22 described in section 521A.6A, if the recipient provides a 23 written attestation that states all of the following: 24 (1) That the recipient shall maintain the confidentiality, 25 privileged, or trade secret status of the document, material, 26 or other information. 27 (2) That the recipient has the legal authority to maintain 28 the confidentiality, privileged, or trade secret status of the 29 document, material, or other information. 30 b. Notwithstanding paragraph “a” , the commissioner may 31 only share confidential and privileged documents, materials, 32 or information filed or submitted pursuant to section 33 521A.4, subsection 12, with the commissioner of a state that 34 has statutes or regulations substantially similar if the 35 -7- LSB 5164XD (7) 89 ko/rn 7/ 13

S.F. _____ H.F. _____ commissioner provides a written attestation that the documents, 1 material, or information shall not be disclosed. 2 c. May receive documents, materials, or information, 3 including otherwise confidential, privileged, proprietary, 4 or trade secret documents, materials, or information from 5 the NAIC and its affiliates and subsidiaries, regulatory 6 and law enforcement officials of other foreign or domestic 7 jurisdictions, and shall maintain as confidential, privileged, 8 proprietary, or trade secret any document, material, or 9 information received with either notice or the understanding 10 that it is confidential, privileged, proprietary, or trade 11 secret under the laws of the jurisdiction that is the source of 12 the document, material, or information. 13 d. Shall enter into a written agreement with the NAIC, and 14 any third-party consultant designated by the commissioner, that 15 governs sharing and the use of information provided pursuant to 16 this chapter, that is consistent with this subsection, and that 17 does all the following: 18 (1) Specifies procedures and protocols regarding the 19 confidentiality and security of information shared pursuant 20 to this chapter with the NAIC or a third-party consultant 21 designated by the commissioner, including procedures and 22 protocols for the NAIC sharing the information with other 23 state, federal, or international regulators. The agreement 24 must provide that the recipient of the information shared 25 by the NAIC or a third-party consultant designated by the 26 commissioner shall provide a written attestation that states 27 all of the following: 28 (a) That the recipient shall maintain the confidentiality, 29 privileged, or trade secret status of the information. 30 (b) That the recipient has the legal authority to maintain 31 the confidentiality, privileged, or trade secret status of the 32 information. 33 (2) Specifies that ownership of all information shared 34 pursuant to this chapter with the NAIC or a third-party 35 -8- LSB 5164XD (7) 89 ko/rn 8/ 13

S.F. _____ H.F. _____ consultant designated by the commissioner remains with the 1 commissioner, and the NAIC’s or third-party consultant’s 2 use of the information is subject to the direction of the 3 commissioner. 4 (3) Prohibits the NAIC or a third-party consultant 5 designated by the commissioner from storing the information 6 shared pursuant to this chapter in a permanent database after 7 the underlying analysis is completed. This prohibition shall 8 not apply to filings and supporting documentation made pursuant 9 to section 521A.4, subsection 12A. 10 (4) Requires prompt notice be given by the NAIC or a 11 third-party consultant designated by the commissioner to an 12 insurer whose confidential information is the possession of the 13 NAIC or the consultant pursuant to this chapter and that is 14 subject to a request or subpoena to the NAIC or the consultant 15 for disclosure or production. 16 (5) Requires the NAIC or a third-party consultant 17 designated by the commissioner to consent to intervention by an 18 insurer in any judicial or administrative action in which the 19 NAIC or the consultant may be required to disclose confidential 20 information about the insurer that had been shared with the 21 NAIC or consultant pursuant to this chapter. 22 (6) Requires notification to an insurer of the identity of 23 a third-party consultant designated by the commissioner that is 24 in possession of the results of the insurer’s liquidity stress 25 test or any supporting documentation filed pursuant to section 26 521A.4, subsection 12B. 27 Sec. 8. Section 521A.7, subsection 6, Code 2022, is amended 28 to read as follows: 29 6. Documents, materials, or other information in the 30 possession or control of the national association of insurance 31 commissioners NAIC or a third-party consultant designated by 32 the commissioner pursuant to this chapter shall be confidential 33 by law and privileged, shall not be subject to chapter 22 , 34 shall not be subject to subpoena, and shall not be subject 35 -9- LSB 5164XD (7) 89 ko/rn 9/ 13

S.F. _____ H.F. _____ to discovery or admissible in evidence in any private civil 1 action. 2 Sec. 9. NEW SECTION . 521A.7A Announcements to the public 3 —— prohibition. 4 1. a. The group capital calculation and all supporting 5 documentation filed pursuant to section 521A.4, subsection 6 12A, and the liquidity stress test results and all supporting 7 documentation filed pursuant to section 521A.4, subsection 8 12B, shall be designated as regulatory tools utilized for the 9 purpose of assessing group risks, and capital adequacy and 10 group liquidity risks, respectively, and shall not be construed 11 as a means to rank insurers or insurance holding company 12 systems. 13 b. Except as otherwise required under this chapter, an 14 insurer, broker, or other person engaged in the business of 15 insurance shall be prohibited from making an announcement to 16 the public. For purposes of this subsection, “announcement to 17 the public” means the use, directly or indirectly, of any print 18 media, broadcast media, electronic media, subscription internet 19 site, internet site available to the public, or any other means 20 to make a representation or statement related to any of the 21 following: 22 (1) (a) An insurer’s or an insurer group’s filings made 23 under section 521A.4, subsection 12A, including a group capital 24 calculation and any supporting documentation. 25 (b) Any component derived from an insurer’s or an insurer 26 group’s group capital calculation or supporting documentation 27 filed under subparagraph division (a). 28 (c) Any comparison of an insurer’s or an insurer group’s 29 group capital calculation, group capital ratio, or other metric 30 calculated or derived from the insurer’s or insurer group’s 31 filings under subparagraph division (a). 32 (2) (a) An insurer’s or an insurer group’s filings made 33 under section 521A.4, subsection 12B, including the result of 34 the liquidity stress test and any supporting documentation. 35 -10- LSB 5164XD (7) 89 ko/rn 10/ 13

S.F. _____ H.F. _____ (b) Any component derived from the results of an insurer’s 1 or an insurer group’s group liquidity stress test or supporting 2 documentation filed under subparagraph division (a). 3 (c) Any comparison of an insurer’s or an insurer 4 group’s liquidity stress test or other metric calculated or 5 derived from the insurer’s or insurer group’s filings under 6 subparagraph division (a). 7 2. If an insurer or an insurer group is able to demonstrate 8 to the commissioner with substantial proof the material falsity 9 or inappropriateness of an announcement made to the public 10 under subsection 1, paragraph “b” , by an insurer, broker, or 11 other person engaged in the business of insurance, the insurer 12 or insurer group may publish an announcement in a written 13 publication if the sole purpose of the announcement is to rebut 14 the materially false or inappropriate announcement made to the 15 public by the insurer, broker, or other person engaged in the 16 business of insurance. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to financial reporting by insurance 21 holding company systems (holding companies). 22 The bill requires the ultimate controlling person (person) 23 of every insurer subject to registration to concurrently file 24 with the registration an annual group capital calculation, 25 completed in accordance with the group capital calculation 26 instructions, and filed with the lead state commissioner (lead 27 commissioner) of the holding company as determined by the 28 procedures in the most recent financial analysis handbook 29 (handbook) published by the national association of insurance 30 commissioners (NAIC). “Group capital calculation instructions” 31 are defined in the bill as the most recent instructions 32 adopted by the NAIC group capital calculation working group 33 or its successor, and as published or amended by the NAIC 34 in accordance with procedures adopted by the NAIC. Certain 35 -11- LSB 5164XD (7) 89 ko/rn 11/ 13

S.F. _____ H.F. _____ holding companies, as detailed in the bill, are exempt from 1 filing the calculation. 2 The bill also requires the person of every insurer subject 3 to registration, and that meets the scope criteria, to file 4 the results of a liquidity stress test (stress test) for each 5 data year that the insurer is subject to the liquidity stress 6 test framework (framework). The filing shall be made to the 7 lead commissioner of the holding company as determined by the 8 procedures in the most recent handbook published by the NAIC. 9 An insurer that meets at least one threshold of the scope 10 criteria shall be subject to the framework for the specified 11 data year unless the lead commissioner, in consultation 12 with the NAIC financial stability task force (task force), 13 determines that the insurer is exempt. An insurer that does 14 not meet at least one threshold of the scope criteria for a 15 specified data year may be subject to the framework if the 16 lead commissioner, in consultation with the NAIC task force, 17 determines that the insurer shall be subject to the framework 18 for that data year. “Scope criteria” and “liquidity stress 19 test framework” are defined in the bill. 20 The performance of, and the filing of, the results from a 21 specific year’s stress test must comply with the requirements 22 detailed in the bill. Any change to the framework, or to the 23 data year for which the scope criteria is to be measured, shall 24 be effective on January 1 of the calendar year immediately 25 following the calendar year that the change to the framework or 26 to the data year is adopted by the NAIC. 27 All information reported or provided to the commissioner 28 shall be considered a confidential record and be recognized and 29 protected as a trade secret, and is subject to disclosure or 30 prohibited from disclosure as detailed in the bill. 31 The group capital calculation and all supporting 32 documentation, and the stress test results and all supporting 33 documentation, shall be designated as regulatory tools utilized 34 for the purpose of assessing group risks, and capital adequacy 35 -12- LSB 5164XD (7) 89 ko/rn 12/ 13

S.F. _____ H.F. _____ and group liquidity risks, respectively, and shall not be 1 construed as a means to rank insurers or holding companies. 2 Except as otherwise required under the bill, an insurer, a 3 broker, or other person engaged in the business of insurance 4 shall be prohibited from making an announcement to the public. 5 “Announcement to the public” is defined in the bill as the 6 use, directly or indirectly, of any print media, broadcast 7 media, electronic media, subscription internet site, internet 8 site available to the public, or any other means to make a 9 representation or statement related to an insurer’s or an 10 insurer group’s filings as detailed in the bill. 11 The bill provides that if an insurer or an insurer group is 12 able to demonstrate to the commissioner with substantial proof 13 the material falsity or inappropriateness of an announcement 14 made to the public by an insurer, broker, or other person 15 engaged in the business of insurance, the insurer or insurer 16 group may publish an announcement in a written publication if 17 the sole purpose of the announcement is to rebut the materially 18 false or inappropriate announcement made to the public by the 19 insurer, broker, or other person engaged in the business of 20 insurance. 21 The bill makes conforming changes to Code sections 22 511.8(22)(b)(2) and 521A.3(2)(a)(12). 23 -13- LSB 5164XD (7) 89 ko/rn 13/ 13