Public Act 098-0823
 
SB2662 EnrolledLRB098 15962 RPM 51012 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Farm Mutual Insurance Company Act of 1986 is 
amended  by changing Section 12 as follows:
 



    (215 ILCS 120/12)  (from Ch. 73, par. 1262)



    Sec. 12. Investments. Without the prior approval of the 
Director, the
funds of any company operating under or
regulated 
by the provisions of this Act, shall be invested only in the

following:


        (1) Direct obligations of the United States of America, 
    or obligations
of agencies or instrumentalities of the 
    United States to the extent
guaranteed or insured as to the 
    payment of principal and interest by the
United States of 
    America;


        (2) Bonds which are direct, general obligations of the 
    State of Illinois or any other state, subject to a maximum 
    of 30% of admitted assets in states other than Illinois in 
    the aggregate;


        (3) Bonds which are direct, general obligations of 
    political
subdivisions of the State of Illinois or any       
    other state, subject to the following conditions:


            (a) Maximum of 5% of admitted assets in any one 
        political subdivision;


            (b) Maximum of 30% of admitted assets in all 
        political
subdivisions in
the aggregate;

            (c) Rating of A3 or higher by Moody's Investors 
        Service, Inc. or A- or higher by Standard & Poor's 
        Corporation; 

        (4) Bonds, notes, debentures, or other similar 
    obligations of the United States of America, its agencies, 
    and its instrumentalities, subject to a maximum investment 
    of 10% of admitted assets in any one issuer Bonds that are 
    obligations of the Federal National Mortgage
Association 
    subject to a maximum investment of 10% of admitted assets 
    in the
aggregate;


        (5) Bonds that are obligations of corporations 
    organized by the United States of America, subject to the 
    following conditions: 
            (a) Maximum of 5% of admitted assets in any one 
        issuer; 
            (b) Maximum of 15% of admitted assets in the 
        aggregate; 
            (c) Rating of A3 or higher by Moody's Investors 
        Service, Inc. or A- or higher by Standard & Poor's 
        Corporation; 
            (d) Maximum maturity of no longer that 10 years the 
        Federal Home Loan Mortgage
Corporation subject to a 
        maximum investment of 10% of admitted assets in the

        aggregate;


        (6) Mutual funds, unit investment trusts, and exchange 
    traded funds, subject to the following conditions:


            (a) Maximum of 6% 3% of policyholders' surplus in 
        any one balanced or
growth mutual fund that invests in 
        common stock;


            (b) Maximum of 5% of admitted assets in any one 
        bond or income mutual
fund or any one non-governmental 
        money market mutual fund;


            (c) Maximum of 10% of admitted assets in any one 
        governmental money
market mutual fund;


            (d) Maximum of 25% of admitted assets in all mutual 
            funds in the
aggregate;


        (7) Common stock and preferred stock subject to the 
    following
conditions:


            (a) Common stock and preferred stock shall be 
        traded on the New York
Stock Exchange or the American 
        Stock Exchange or listed on the National
Association of 
        Securities Dealers Automated Quotation (NASDAQ) 
        system;


            (b) Maximum of 3% of policyholders' surplus in 
        excess of $400,000 in
any one common stock or preferred 
        stock issuer provided that the net unearned
premium 
        reserve does not exceed policyholders' surplus;


        (8) Investments authorized under subdivision (a) of 
    item (6) and
subdivision (a) of item (7) of this Section 
    shall not in the
aggregate exceed 15% 10% of policyholders' 
    surplus;


        (9) Funds on deposit in solvent banks and savings and 
    loan
associations which are insured by
the Federal Deposit 
    Insurance Corporation; however, the uninsured portion
of 
    funds held in any one such bank or association shall not 
    exceed 5% of
the company's
policyholders' surplus;


        (10) Real estate for home office building purposes, 
    provided
that such
investments are approved by the Director 
    of Insurance on the basis of a
showing by the company that 
    the company has adequate assets available for
such 
    investment and that the proposed acquisition does not 
    exceed the
reasonable normal value of such property; .

        (11) Amounts in excess of the investment limitations 
    contained in items (2) through (9) may be allowed, subject 
    to the following conditions:
            (a) Maximum additional investment of 3% of 
        admitted assets in any one issuer;
            (b) Maximum  additional investment of 6% of 
        admitted assets in the aggregate. 
    An investment that qualified under this Section at the time 
it was
acquired by the company shall continue to qualify under 
this Section.

    Investments permitted under this Section shall be 
registered in the name of
the
company and under its direct 
control or shall be held in a custodial account
with a bank or 
trust company that is qualified to administer trusts in 
Illinois
under
the Corporate Fiduciary Act and that has an 
office in Illinois.
 However, securities may be held in street 
form and in the custody of a
licensed dealer for a period not 
to exceed 30 days.

    Notwithstanding the provisions of this Act, the Director 
may, after notice
and hearing, order a company to limit or 
withdraw from certain investments or
discontinue certain 
investments or investment practices to the extent the
Director 
finds those investments or investment practices endanger the 
solvency
of the company.

(Source: P.A. 90-794, eff. 1-1-99.)