CHAPTER 336
FORMERLY
SENATE BILL NO. 338
AS AMENDED BY HOUSE AMENDMENT NO. 2
AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO INVESTMENT IN STOCK OF SUBSIDIARIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Amend §1313, Title 18, Delaware Code by deleting that section in its entirety, and by substituting in lieu thereof a new section to read as follows:
"§1313. Stock of Subsidiaries.
(a) An insurer may invest in the stock of subsidiary insurance corporations formed or acquired by it, or, in addition to the right to own stock in other corporations given insurers in §1305(2) of this title, it may also invest in not less than a majority of the voting stock of a business corporation formed under the laws of this or another state or a foreign nation, the activities of which corporation are primarily supplementary and complementary to the convenient operation of the insurer's business or to the administration of its affairs and, corporations engaged or organized to engage in the marketing of financial, insurance or service products, the products to be subject to the approval of the Insurance Commissioner. As used in this title, a subsidiary insurance corporation shall include, in addition to those such corporations where the insurer owns a majority of their stock, those corporations formed or acquired by an insurer where it owns less than a majority of such corporation's voting stock due to the laws of a foreign nation which require the insurer to own less than a majority of the voting stock of such subsidiary insurance corporation if it is to operate in that nation.
(b) Limitations on investments in subsidiary insurance corporations shall be as follows:
(1) Domestic insurers transacting insurance in any state of the United States of America and not establishing reserves and operating in accordance with §1104 of this title: All of the insurer's investments in subsidiary insurance corporations shall not at any time exceed the lesser of ten percent (10%) of the insurer's admitted assets or fifty percent (50%) of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in §511(a)(2) of this Title) if other than a life insurer. With prior approval of the Commissioner, an insurer may invest a greater amount in the securities of subsidiary insurance corporations than permitted above, if, after such investment the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in §511(a)(2) of this Title) if other than a life insurer, will be reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs.
(2) Domestic insurers transacting insurance in foreign countries only, and not transacting insurance in any state of the United States of America and establishing reserves and operating in accordance with §1104 of this title: All of the insurer's investments in subsidiary insurance corporations shall not at any time exceed (100%) of the insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in §511(a)(2) of this Title) if other than a life insurer.
(c) All of the insurer's investments under this section, together with its investments in insurance stocks under section 1312(b) of this title, shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in §511(a)(2) of this title) if other than a life insurer."
Section 2. Any insurer whose investments in subsidiary insurance corporations exceed 50% of its surplus as of the effective date of this Act shall not be required to obtain the Commissioner's approval for such investments. After the effective date of this Act, all existing investments, irrespective of when made, shall be included in the calculations required under this Act.