N.J. Stat. tit. 17, ch. 24

in effect

N.J. Stat. § 17:24-1 Investments by insurance companies generally.

17:24-1. Any insurance company of this State for the purpose of investing its capital, surplus and other funds, or any part thereof, may: a. Purchase or hold as collateral security or otherwise and sell and transfer any bonds or public stock issued, created or guaranteed by the United States, or any territory or insular possession thereof, or the Commonwealth of Puerto Rico, or by this State, or by any of the other states of the United States or the District of Columbia, or by Canada or any of the provinces thereof, or by any of the incorporated cities, counties, parishes, townships or other municipal corporations situated in any of the places hereinabove mentioned; or bonds authorized to be issued by any commission appointed by the Supreme Court of this State as the said court was constituted prior to September 15, 1948. b. Purchase or hold real estate for business or residential purposes, other than as provided for in R.S.17:19-8 to 17:19-12, inclusive, as an investment for the production of income, and improve or otherwise develop such real estate; provided, that if the commissioner shall determine, after due hearing upon notice to any such insurance company, that the interests of such insurance company's policyholders require that any specified real estate so purchased or held be disposed of, then such insurance company shall dispose of such real estate within such reasonable time as the commissioner shall direct; and provided further, the aggregate amount of such investments for the production of income, but excluding real estate held as provided for in R.S.17:19-8 to 17:19-12, inclusive, shall not exceed 5% of the total admitted assets of such insurance company as of December 31 next preceding. The term "real estate for business or residential purposes" as used in this subsection b. shall include any real property used or operated as a part of or in connection with a business or a residential development, and shall also include a leasehold of such real estate having an unexpired term of not less than 20 years, inclusive of the term or terms which may be provided by any enforceable option or options of extension or of renewal. Income produced by investment in any such leasehold shall be applied by such insurance company in a manner calculated to amortize the amount invested for acquisition and improvement thereof within a period not exceeding 8/10 of such unexpired term of the leasehold following such acquisition or improvement, or within a period of 40 years thereafter, whichever is less. c. Invest in bonds or notes secured by mortgages or trust deeds on unencumbered fee simple or leasehold real estate, which shall include areas above the surface of the ground but not contiguous thereto, or any interest therein, located within the United States, any territory or insular possession thereof, the Commonwealth of Puerto Rico, or Canada, worth at least 1/3 more than the sum so invested. No loan may be made on leasehold real estate unless the terms of such loan provide for amortization payments to be made by the borrower on the principal thereof in amounts sufficient to completely amortize the loan within a period not exceeding 9/10 of the term of the leasehold, inclusive of the term or terms which may be provided by any enforceable option or options of extension or of renewal, which is unexpired at the time the loan is made. For the purpose of this subsection c., fee simple or leasehold real estate or any interest therein shall not be deemed to be encumbered within the meaning of this subsection c. by reason of the existence of taxes or assessments that are not delinquent, easements, profits or licenses, nor by reason of building restrictions or other restrictive covenants, nor when such real estate or interest therein is subject to lease in whole or in part whereby rents or profits are reserved to the owner; provided, that the security created by the mortgage or trust deed on such real estate or interest therein securing such bond or note is a first lien upon such real estate or interest therein. No insurance company shall, pursuant to this subsection c., invest in or loan upon the security of any one property more than $30,000 or more than 2% of its total admitted assets, whichever is the greater. The total investments of any insurance company made pursuant to this subsection c. shall not exceed 40% of its total admitted assets. d. Invest in bonds or notes evidencing loans to veterans if the full amount of any such loan is guaranteed by the government of the United States or by the Administrator of Veterans' Affairs pursuant to the "Servicemen's Readjustment Act of 1944," Pub.L.78-346 (38 U.S.C. s.3701 et seq.), as heretofore or hereafter amended; and in the case of loans so guaranteed for less than the full amount thereof, the maximum amount which may be loaned or invested by any such insurance company pursuant to the provisions of any law of this State shall be increased by the amount so guaranteed. e. Lend on or purchase mortgage or collateral trust bonds of railroad companies organized under the laws of said states, or the District of Columbia, or the Commonwealth of Puerto Rico, or Canada or any province thereof, or operated wholly or partly therein; or equipment trust certificates or obligations which are adequately secured or other adequately secured instruments evidencing an interest in transportation or municipal sanitation equipment wholly or in part within the United States or any territory or insular possession thereof, the Commonwealth of Puerto Rico or Canada and a right to receive determined portions of rental, purchase or other fixed obligatory payments for the use or purchase of such equipment; or certificates of receivers of any corporation where such purchase is necessary to protect an investment in the securities of such corporation theretofore made under authority of chapters 17 to 33, inclusive, of this Title; or the bonds or other evidences of indebtedness of public utility companies organized under the laws of Canada or any province thereof; or the capital stock, bonds, securities or evidences of indebtedness created by any corporation of the United States or of any state, or of the District of Columbia, or of the Commonwealth of Puerto Rico or of Canada or of any province thereof; provided, that no purchase of any bond or evidence of indebtedness which is in default as to interest shall be made by such company unless such purchase is necessary to protect an investment theretofore made under authority of chapters 17 to 33, inclusive, of this Title, in the securities of the corporation which issued, assumed or guaranteed such bond or evidence of indebtedness in default; provided further, that no purchase of the stock of any corporation of a class on which dividends have not been paid during each of the past five years preceding the time of purchase shall be made unless the stock so purchased shall represent a majority in control of all the stock then outstanding, or the corporation shall have earned during the period of such five years an aggregate sum available for dividends upon such stock which would have been sufficient, after all fixed charges and obligations, to pay dividends upon all shares of such class of stock outstanding during such period averaging 4% per annum computed upon the par value of such stock, or in the case of stock having no par value, upon the stated capital in respect thereof; and provided further, that in the case of the stock of a corporation resulting from or formed by merger, consolidation, acquisition or otherwise, less than five years preceding the time of purchase, each consecutive year next preceding the effective date of such merger, consolidation, acquisition or other action during which dividends or other distributions of profits shall have been paid by any one or more of its constituent or predecessor institutions shall be deemed a year during which dividends have been paid on such class of stock and the earnings of such constituent or predecessor institutions available for dividends during each of such years may be included as earnings of the existing corporation whose stock is to be purchased for each such years, and in the case of the stock of a corporation resulting from or formed by merger or consolidation less than five years preceding such purchase, each consecutive year next preceding the effective date of such merger or consolidation during which dividends shall have been paid by any one or more of its constituent corporations on any or all classes of its or their stock in an aggregate amount sufficient to have paid dividends on that class of stock of the existing corporation whose stock is to be purchased, had such corporation then been in existence, shall be deemed a year during which dividends have been paid on such class of stock; provided, however, that nothing herein contained shall prohibit the purchase of stock of any class which is preferred, as to dividends, over any class the purchase of which is not prohibited by this section; and provided further, that no purchase of its own stock shall be made by any insurance company except for the purpose of the retirement of such stock or except as specifically permitted by any law of this State applicable by its terms only to insurance companies. Unless the stock so purchased shall represent a majority in control of all the stock then outstanding, the cost of stock investment pursuant to this section may not exceed more than 25% of the total admitted assets of such insurance company as of December 31 next preceding with no more than 5% in any one stock. Notwithstanding any other provision of R.S.17:24-1 et seq., the cost basis of all stock investment shall be used for the purpose of determining the asset value against which such percentage limitations are to be applied. The aggregate amount invested at cost, including but not limited to common stock, preferred stock and debt obligations, in one or more subsidiaries shall not exceed the lesser of 10% of such insurance company's assets or 50% of such insurance company's surplus as regards policyholders as of December 31 next preceding. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries shall be excluded. f. Invest in bonds or notes evidencing loans if the full amount of any such loan is insured by the government of the United States, or by the Administrator of the Farmers' Home Administration pursuant to the " Bankhead-Jones Farm Tenant Act," Pub.L.75-210 (7 U.S.C. s.1000 et seq.), as heretofore or hereafter amended. g. Invest in securities, properties and other investments in foreign countries, in addition to those specified in R.S.17:24-10, which are substantially of the same character as prescribed for authorized investments for funds of the insurance company under the preceding subsections of this section, to an amount valued at cost, not exceeding in the aggregate at any one time 20% of the total admitted assets of the insurance company as of December 31 next preceding; provided, however, that the amount invested pursuant to this subsection in authorized investments, other than qualified foreign investments, shall not exceed in the aggregate, at any one time, 5% of such admitted assets; and provided further that the amount invested in authorized investments in any one foreign country pursuant to this subsection shall not exceed in the aggregate, at any one time, 10% of such admitted assets. For the purposes of this subsection, Canada shall not be deemed to be a foreign country. The term "qualified foreign investment" as used in this subsection shall include any investment in a foreign country where: (1) the issuer or obligor is: (a) a jurisdiction which is rated in one of the two highest rating categories by an independent, nationally recognized United States rating agency; (b) any political subdivision or other governmental unit of any such jurisdiction, or any agency or instrumentality of any such jurisdiction, political subdivision or other governmental unit; or (c) an institution that is organized under the laws of any such jurisdiction, or, in the case of investments which are substantially of the same character as prescribed for investments under subsections b. and c. of this section, the real property is located in any such jurisdiction; and (2) if the investment is denominated in any currency other than United States dollars, the investment is effectively hedged, substantially in its entirety, against the United States dollar pursuant to contracts or agreements which are: (a) issued by or traded on a securities exchange or board of trade regulated under the laws of the United States or Canada or a province thereof; (b) entered into with a United States banking institution which has assets in excess of $5 billion and which has obligations outstanding, or has a parent corporation which has obligations outstanding, which are rated in one of the two highest rating categories by an independent, nationally recognized United States rating agency, or with a broker-dealer registered with the Securities and Exchange Commission which has net capital in excess of $250 million; or (c) entered into with any other banking institution which has assets in excess of $5 billion and which has obligations outstanding, or has a parent corporation which has obligations outstanding, which are rated in one of the two highest rating categories by an independent, nationally recognized United States rating agency and which is organized under the laws of a jurisdiction which is rated in one of the two highest rating categories by an independent, nationally recognized United States rating agency. Any investment qualified pursuant to paragraph (2) of the preceding definition of "qualified foreign investment" shall remain so qualified only at such time or times that the hedging requirements of paragraph (2) are met. h. Except as provided in section 3 of P.L.2007, c.252 (C.17:24-1.2), make loans or investments not qualifying or permitted under any subsection of this section to an amount, not including the amount of investments otherwise expressly authorized by law, not exceeding in the aggregate at any one time the greater of 5% of the total admitted assets or 50% of the excess of total admitted assets over the sum of liabilities plus capital and surplus required to transact business, but in any event not to exceed 10% of the total admitted assets of such insurance company as of December 31 next preceding. Amended 1938, c.359; 1938, c.368; 1945, c.226, s.2; 1946, c.116; 1947, c.358, s.1; 1950, c.283, s.2; 1952, c.136; 1953, c.17, s.115; 1955, c.185, s.1; 1962, c.163; repealed(as to life insurance companies), 1967, c.201, s.9; saved from repeal(see N.J.S. 17B:36-1); 1983, c.81, s.1; 2007, c.252, s.1; 2023, c.219.

N.J. Stat. § 17:24-1.1 Written plan for acquiring, holding investments, investment practices.

2. a. An insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice. b. Investments acquired and held under R.S.17:24-1 et seq. shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments. c. On no less than a quarterly basis, and more often if deemed appropriate, an insurer's board of directors or committee of the board of directors shall: (1) Receive and review a summary report on the insurer's investment portfolio, its investment activities and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and (2) Review and revise, as appropriate, the written plan. d. In discharging its duties under this section, the board of directors shall require that records of any authorizations or approvals, other documentation as the board may require and reports of any action taken under authority delegated under the plan referred to in subsection a. of this section shall be made available on a regular basis to the board of directors. e. If an insurer does not have a board of directors, all references to the board of directors in R.S.17:24-1 et seq. shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors. L.2007, c.252, s.2.

N.J. Stat. § 17:24-1.2 Actions prohibited by insurer without prior approval; exceptions.

3. a. (1) Except as provided in subsection b. of this section, an insurer shall not, without the prior written approval of the commissioner, directly or indirectly: (a) make a loan to, or other investment in, an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; (b) make a guarantee for the benefit of, or in favor of, an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or (c) enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest. (2) For purposes of this section, an officer or director shall not be deemed to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than 5% of all outstanding equity interests issued by a person that is a party to the transaction, or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction. (3) Nothing in this subsection shall permit an investment that is otherwise prohibited by law. (4) This subsection shall not apply to a transaction between an insurer and any of its subsidiaries or affiliates entered into in compliance with section 4 of P.L.1970, c.22 (C.17:27A-4) other than a transaction between an insurer and its officer or director. b. An insurer may make, without the prior written approval of the commissioner: (1) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or debit cards issued or credit extended for the purpose of financing these expenses; (2) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, so long as the terms and conditions otherwise are the same as those generally available from unaffiliated third parties; (3) Secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans: (a) do not have a term exceeding two years; (b) are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer; (c) do not exceed an amount equal to the equity of the officer in the prior residence; and (d) are required to be fully repaid within two years, or upon the sale of the prior residence whichever first occurs; and (4) Loans and advances to officers or directors made in compliance with State or federal law specifically related to the loans and advances by a regulated non-insurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than those available to other customers of the entity. L.2007, c.252, s.3.

N.J. Stat. § 17:24-3 Accepting or acquiring corporate stock or other securities or property

Nothing contained in this chapter shall be construed to prohibit an insurance company from accepting or acquiring corporate stock or evidences of indebtedness or other securities or property (1) pursuant to a plan of reorganization approved or made effective by order of a court having jurisdiction over the property of a debtor, (2) pursuant to a voluntary plan or agreement of reorganization approved in writing by the commissioner, (3) as payment on account of an existing indebtedness, (4) as realization of collateral for a loan in default, or (5) through the exercise of rights of conversion, warrants or rights to purchase stock, or preemptive rights to subscribe to stock, contained in or attached to a previously existing investment of such company. If any such stock, securities or property so received shall be of a kind or in an amount not otherwise allowable as an investment by this chapter, they shall be disposed of within 5 years from the time of their acquisition, unless the commissioner shall, for good cause shown, allow further time for the disposal thereof and then within the time so allowed. Amended by L.1956, c. 182, p. 692, s. 2.

N.J. Stat. § 17:24-5 Valuation of bonds

All bonds or other evidences of debt held by an insurance corporation authorized to do business in this state may, if amply secured and not in default as to principal or interest, be valued as follows: If purchased at par, at the par value; if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield meantime the effective rate of interest at which the purchase was made, but the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, and the commissioner shall have full discretion in determining the method of calculating values according to the foregoing rule, and the values found by him in accordance therewith shall be final and binding, and any such corporation may return the bonds or other evidences of debt at their market value or their book value, but in no event at an aggregate value in excess of the aggregate of the values calculated according to the foregoing rule. This section shall not be construed to apply to any insurance corporation authorized to do business in this state which shall not elect to value its bonds and other evidences of debt by amortization as herein provided.

N.J. Stat. § 17:24-5.1 Valuation of securities held by insurance company; violations; penalties

4. Except as otherwise required by the commissioner, securities held by an insurance company transacting business in this State in accordance with the provisions of Title 17 of the Revised Statutes shall be valued in accordance with the published valuation standards of the Securities Valuation Office of the National Association of Insurance Commissioners. Every insurance company licensed to transact business in this State shall comply with the filing and valuation requirements of the Securities Valuation Office of the National Association of Insurance Commissioners or requirements established by the commissioner, as applicable, with respect to the valuation of securities. Any insurance company that fails to comply with the provisions of this section shall be subject to a penalty of not less than $1,000 nor more than $5,000 for a first violation, and not less than $2,000 nor more than $10,000 for each subsequent violation. L.1993,c.242,s.4.

N.J. Stat. § 17:24-6 Marine insurance companies; additional investments

Any company organized for the purpose of marine insurance may also lend its funds on bottomry and respondentia bonds and change and reinvest the same.

N.J. Stat. § 17:24-7 Title insurance companies; dealing in real estate mortgages; issuing obligations

A company organized under chapters seventeen to thirty-three of this Title (s. 17:17-1 et seq.), to transact the business authorized by paragraph "h" of section 17:17-1 of this Title, may also, with its capital and surplus, take, buy, sell and deal in first mortgages on real estate, and, also may act as agent for investors in and the holders of mortgages and interests therein, in the purchase, sale, and servicing thereof; provided, that no contract of insurance or guaranty or other obligation to pay money be incurred in connection with such managing or servicing beyond the obligation of accounting for funds received. Companies incorporated and authorized to conduct the business of insuring titles under charters issued prior to the enactment of this amendment shall enjoy all of the powers given by this act as amended and all of the powers they enjoy under their existing certificates of incorporation; provided, however, that they shall not be permitted to write any new contracts guaranteeing payment of principal and interest of bonds and mortgages, or shares or parts of mortgages or mortgage participation certificates, or shares or parts of bonds secured by mortgage, or bonds secured by trust mortgage, or participation certificates or coupon bonds entitling the holder to a proportionate share in a series or number of mortgages and bonds, or extensions or renewals thereof, or other obligations directly or indirectly secured by bonds and mortgages, except such contracts of guaranty as may be issued or made by way of extensions, substitutions, refunding issues of bonds or participations, or otherwise in performing existing contracts of that character. Amended by L.1938, c. 289, p. 625, s. 9.

N.J. Stat. § 17:24-8 Additional investment permitted title insurance companies

Any insurance company of this state, engaged in the business of insuring title to real estate, may also invest its capital or surplus, or both, in shares or parts of mortgages and any mortgage participation certificates which entitle the holder to a proportionate share in a mortgage or number of mortgages or extensions or renewals thereof, which are a first lien on improved real estate in this state, and the amount of which mortgages shall not at the time of the making of the loan exceed sixty per cent of the estimated worth of the real estate covered by the respective mortgages at a rate of interest not less than three per cent nor greater than six per cent per annum. No share or part of the mortgages so held shall be subordinated to any prior interest therein. Mortgages in parts of which any of the capital or surplus, or both, may be invested, together with any guarantees of payment, insurance policies, and other instruments and evidences of title relating thereto, shall be held for the benefit of the insurance company and of any other persons interested in the mortgages by a bank, trust company or title guaranty corporation organized under the laws of this state, or jointly by such a corporation and an individual who is a citizen and bona fide resident of this state. A certificate stating that the corporation, or the corporation and the individual jointly, as the case may be, holds the instruments for the benefit of the insurance company and of any other persons who may be interested in the mortgage, among whom the corporation or the individual jointly holding the instruments may be included, shall be executed by the corporation and delivered to each person who becomes interested in the mortgage. Every corporation, or corporation and individual jointly, issuing any such certificate, shall keep a record in proper books of account of all certificates issued. Any investments made by any such title insurance company, prior to March twenty-sixth, one thousand nine hundred and twenty-eight, shall be considered as legal assets forming part of the capital and surplus of the insurance company.

N.J. Stat. § 17:24-9 Investment of surplus in stock of certain companies

Any company, other than a life insurance company, organized and authorized to transact business under chapters 17 to 33 of this title (s. 17:17-1 et seq.), may also invest not exceeding twenty-five per cent of its surplus in the common stock of any nondividend-paying insurance company or companies organized in and authorized to transact business in this state.

N.J. Stat. § 17:24-10 Investments in foreign securities

Any insurance company of this State lawfully doing business in any foreign country may also invest its funds, to an amount not exceeding the value of its outstanding policies of insurance issued or delivered in the foreign country, in securities issued by any governing body or agency or any corporation of the foreign country or in obligations secured upon property therein, otherwise of the same character as that prescribed for authorized investments for the funds of the company under the laws of this State; provided, that any loan secured by first mortgage on unencumbered real estate in the Dominion of Canada, authorized and placed under any act of that Dominion by virtue of which it assumes liability for all or a substantial portion of any loss resulting from the liquidation of such investment after the foreclosure of the mortgage securing the same, or by virtue of which it guarantees the payment of such loan, shall be construed as being of such character. Any investment hereby authorized shall be subject to all other limitations imposed by the laws of this State. Amended by L.1945, c. 23, p. 80, s. 1.

N.J. Stat. § 17:24-11 Bond and mortgage; sale or assignment of part with guaranty of payment; subordinate interests

If a company incorporated under this subtitle has, prior to April eighteenth, one thousand nine hundred and thirty-two, under any provision thereof, purchased, obtained or invested in bonds secured by mortgages which are first liens upon the properties described in the mortgages and the company has sold or assigned with a guaranty of payment of principal and interest or shall, after April eighteenth, one thousand nine hundred and thirty-two, sell or assign with such guaranty a primary part or portion of any of such bonds and mortgages to a purchaser thereof, retaining the balance of the bond and mortgage itself behind and subordinate to the lien of the purchaser, the company may continue to hold such interest in the bonds and mortgages and thereafter acquire any other interest in the bonds and mortgages. In each case any such interest shall be considered a proper authorized and legal investment under the terms of this subtitle. Nothing herein contained shall be construed to authorize the retention of subordinate interests in bonds and mortgages hereafter purchased, obtained or invested in.

N.J. Stat. § 17:24-12 Holding of securities within State; exceptions

17:24-12. All securities of domestic insurers shall be held for safekeeping within the geographical limits of this State, except: a. Securities deposited with public officials of other states, the District of Columbia, the United States Government, any territory or possession thereof, the Commonwealth of Puerto Rico, and foreign countries, to the extent required by the laws of the jurisdiction as a condition for authority to transact business; b. Securities required as collateral for loans or as security for the performance of contracts; c. Mortgages and evidences of indebtedness secured thereby, which are held for safekeeping in one or more offices operated by and under the direct control of an officer of the company; d. Stock and other securities representing stock or convertible into stock, and options, warrants, or rights to acquire stock; e. Debt securities with a maturity of less than one year; f. Securities issued or guaranteed by the United States or any department or agency or instrumentality thereof; and g. As long as there are held for safekeeping within the geographical limits of this State securities having a value of not less than $50,000,000.00, any other debt securities which are publicly traded. This section shall not limit or prohibit: (1) the deposit of securities under agreements as provided in R.S.17:24-3, or (2) the transmission of securities outside the State for the purpose of securing or recording title to the securities or to property, or for the purpose of the sale, exchange or alteration of the provisions of the securities, or for the collection of any payment due thereon, or (3) the holding of securities in the names of nominees authorized by the board of directors of the insurer, or by a committee of the board which is charged with the duty of supervising investments, or (4) the lending of securities to any corporation or business partnership upon adequate collateral security, or (5) the holding outside of the State, in The Depository Trust Company or any other depository institution approved by the Commissioner of Insurance, of securities which comprise all or part of a custodial account for which the fiduciary is a qualified bank pursuant to section 28 of P.L.1948, c.67 (C.17:9A-28) or is an association authorized to exercise fiduciary powers pursuant to subsection (19) of section 48 of P.L.1963, c.144 (C.17:12B-48). Amended 1977,c.351; 1983,c.81,s.2; 1983,c.279,s.1; 1995,c.182,s.1.

N.J. Stat. § 17:24-13 Purpose of act; expenses of committee in investigation, analyses, and valuation of securities

The purpose of this act is to provide a means of making funds not in excess of two hundred and fifty thousand dollars ($250,000.00) in any one year available to the Committee on Valuation of Securities of the National Association of Insurance Commissioners to defray the expenses of such committee in the investigation, analyses and valuation of securities and the determination of the amortizability of bonds, owned by insurance companies, for the purpose of furnishing to the several States on a uniform basis information needed in the supervision of insurance companies licensed to transact business in the several States. The Commissioner of Banking and Insurance is hereby authorized to disburse in the manner hereinafter provided, in co-operation with supervisory officials of other States, funds obtained through assessments for such purpose under this act. L.1949, c. 248, p. 797, s. 1.

N.J. Stat. § 17:24-14 Budget estimate

The Commissioner of Banking and Insurance shall periodically obtain from such Committee on Valuation of Securities a verified budget estimate of the receipts and of the expenses to be incurred by the committee for a stated period, not exceeding one year, with appropriate explanations of the estimates therein contained. L.1949, c. 248, p. 797, s. 2.

N.J. Stat. § 17:24-16 Audit of receipts and disbursements; statement of assets and liabilities

The commissioner shall require annually and at such other times as he may deem it necessary or advisable a duly certified audit of receipts and disbursements and statement of assets and liabilities, showing the details of the financial operations of the Committee on Valuation of Securities. L.1949, c. 248, p. 798, s. 4.

N.J. Stat. § 17:24-25 Partial repeal

a. The following sections of the Revised Statutes, insofar as they apply to life insurance companies are repealed: Sections 17:2-1, 17:2-2, 17:2-4 to 17:2-8, 17:19-1 to 17:19-12, 17:24-1, 17:24-3, 17:24-5, 17:24-10 to 17:24-12. b. The following acts insofar as they apply to life insurance companies are repealed: P.L.1938, chapter 222, P.L.1945, chapter 257, and P.L.1947, chapter 308. L.1967, c. 201, s. 9, eff. Aug. 25, 1967.

N.J. Stat. § 17:24-26 Repeal

Section 17:24-2 of the Revised Statutes and P.L.1964, chapter 138 are repealed. L.1967, c. 201, s. 10, eff. Aug. 25, 1967.

N.J. Stat. § 17:24-28 Definitions relative to investment pools.

1. As used in this act: "Business entity" means a corporation, limited liability company, limited liability partnership, association, partnership, joint stock company, joint venture, mutual fund trust, or other legal form of organization, whether organized for-profit or not-for-profit. "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the published valuation standards of the Securities Valuation Office of the National Association of Insurance Commissioners. "Commissioner" means the Commissioner of Banking and Insurance. "Government money market mutual fund" means a money market mutual fund that at all times: (1) Invests only in obligations issued, guaranteed or insured by the federal government of the United States or collateralized and repurchase agreements composed of these obligations; and (2) Qualifies for investment without a reserve under the published valuation standards of the Securities Valuation Office of the National Association of Insurance Commissioners. "Money market mutual fund" means a mutual fund that meets the conditions of 17 C.F.R.s.270.2a-7, under the federal "Investment Company Act of 1940," 15 U.S.C.s.80a-1 et seq. "Obligation" means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases and other evidence of indebtedness for the payment of money (or participations, certificates or other evidences of an interest in any of the foregoing), whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment. "Qualified bank" means a national bank, state bank or trust company that at all times is no less than adequately capitalized as determined by the standards adopted by the United States banking regulators and that is either regulated by state banking laws or is a member of the Federal Reserve System. "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand. "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand. "Securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand. "SVO" means the Securities Valuation Office of the National Association of Insurance Commissioners. L.1999,c.20,s.1.

N.J. Stat. § 17:24-29 Permitted investments, qualifications.

2. An insurer may invest in investment pools that: a. Invest only in: (1) Obligations that are rated "1" or "2" by the SVO or have an equivalent of an SVO "1" or "2" rating by a nationally recognized statistical rating organization recognized by the SVO and have: (a) A remaining maturity of 397 days or less or a put that entitles the holder to receive the principal amount of the obligation, which put may be exercised through maturity at specified intervals, not exceeding 397 days; or (b) A remaining maturity of three years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, London InterBank Offered Rate (LIBOR) or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes; (2) Government money market mutual funds or class one money market mutual funds; or (3) Securities lending, repurchase and reverse repurchase transactions on investments in which an insurer is permitted to invest pursuant to the provisions of R.S.17:24-1; or b. Invest only in investments which an insurer may acquire under subsection a. of this section if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of section 4 of this act. L.1999,c.20,s.2.

N.J. Stat. § 17:24-30 Qualified investment pools.

3. For an investment in an investment pool to be qualified under this act, the investment pool shall not: a. Acquire securities issued, assumed, guaranteed or insured by the insurer or an affiliate of the insurer; b. Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of this act; or c. Permit the aggregate value of securities then loaned or sold to, purchased from or invested in any one business entity under this act to exceed ten percent of the total assets of the investment pool. L.1999,c.20,s.3.

N.J. Stat. § 17:24-31 Limits on permitted investments.

4. Notwithstanding the provisions of R.S.17:24-1 to the contrary, an insurer may invest in an investment pool, however, an insurer shall not acquire an investment in an investment pool under this act if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer: a. n any one investment pool would exceed ten percent of its admitted assets; or b. In all investment pools, investing in investments permitted under section 2 of this act, would exceed thirty-five percent of its admitted assets. L.1999,c.20,s.4.

N.J. Stat. § 17:24-32 Requirements of manager of investment pool.

5. For an investment in an investment pool to be qualified under this act, the manager of the investment pool shall: a. Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement; b. Be the insurer, an affiliated insurer or a business entity affiliated with the insurer, a qualified bank, a business entity registered under the federal "Investment Advisors Act of 1940," 15 U.S.C.s.80A-1 et seq., or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact, or in the case of a United States branch of an alien insurer, its United States manager or affiliated or subsidiaries of its United States manager; c. Compile and maintain detailed accounting records setting forth: (1) The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool; (2) A complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date (if any) and other appropriate designations); and (3) Other records which, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and d. Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement shall: (1) State and recognize the claims and rights of each participant; (2) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; (3) Contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person ; and (4) Conform with guidelines established by the National Association of Insurance Commissioners and regulations governing custodial or safeguard agreements promulgated by the commissioner. L.1999,c.20,s.5.

N.J. Stat. § 17:24-33 Written pooling agreement, terms.

6. The pooling agreement for each investment pool shall be in writing and shall provide that: a. An insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under section 2 of this act, the insurer and its subsidiaries, affiliates or any pension or profit sharing plan of the insurer, its subsidiaries and affiliates or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold one hundred percent of the interests in the investments pool; b. The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person; c. In proportion to the aggregate amount of each pool participant's interest in the investment pool: (1) Each participant owns an undivided interest in the underlying assets of the investment pool; and (2) The underlying assets of the investment pool are held solely for the benefit of each participant; d. A participant, or in the event of the participant's insolvency, bankruptcy or receivership, its trustee, receiver or other successor-in-interest, may withdraw all or any portion of its investment from the pool under the terms of the pooling agreement; e. Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five business days. Distributions under this paragraph shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager: (1) In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool; (2) In kind, a pro rata share of each underlying asset; or (3) In a combination of cash and in kind distributions, a pro rata share in each underlying asset; f. The pool manager shall make the records of the investment pool available for inspection by the commissioner, and an audit of the pool accounting records shall be conducted at least annually by an independent certified public accountant; and g. Valuation of the assets of the investment pool shall be in conformance with valuation standards established by the National Association of Insurance Commissioners and regulations promulgated by the commissioner. L.1999,c.20,s.6.

N.J. Stat. § 17:24-34 Investment pool, organized as business entity.

7. An investment pool established pursuant to the provisions of this act shall be a business entity and shall be a subsidiary organized to engage exclusively in the acquisition, ownership or management of investments, provided that the subsidiary is wholly-owned by two or more insurers domiciled in the United States, who are members of the same holding company system. L.1999,c.20,s.7.

N.J. Stat. § 17:24-35 Authority of commissioner.

8. The commissioner shall have the authority to: a. Review any investment pool agreement and disapprove that agreement if it does not comply with the provisions of this act; b. Review the operation of any investment pool and order compliance with this act; and c. Disallow, as an admitted asset, any investment not in compliance with the provisions of this act. L.1999,c.20,s.8.

N.J. Stat. § 17:24-36 Inapplicability of C.17:27A-4 as to transaction standards.

9. The provisions of section 4 of P.L.1970, c.22 (C.17:27A-4) shall not apply to transactions between the pool and its participants, provided, however, that the investment activities of the pool and transactions between an insurer investment pool and its participants shall be reported annually in the registration statement required pursuant to section 3 of P.L.1970, c.22 (C.17:27A-3). L.1999,c.20,s.9.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026