Insurer and State Compensation Insurance Fund investments.

Existing law generally regulates the business of insurance in the state, including the types and amounts of investments that insurers may make. Existing law establishes the California Organized Investment Network (COIN) within the Department of Insurance to, among other things, pursue active measures to encourage insurers to make investments in California's underserved and low-to-moderate-income communities. Existing law authorizes a domestic incorporated insurer to make discretionary investments after investment of an amount equal to its required minimum paid-in capital in specified securities. Under existing law, those discretionary investments may include the purchase of, or loans upon, properties and securities, but are limited to the lesser of 5% of the insurer's admitted assets or 50% of the excess of admitted assets over the sum of capital paid up, liabilities, and a required surplus. This bill would, until January 1, 2027, increase that limitation if the Insurance Commissioner has approved the amount and terms of the investment in advance and COIN has identified the investment in an investment opportunity bulletin or otherwise deemed it to be a qualified investment. The bill would require the commissioner to submit a report to the committees of the Senate and Assembly having jurisdiction over insurance on or before December 31, 2025, regarding the investments made due to the increased limitation. Existing law establishes the State Compensation Insurance Fund to be administered by a board of directors for the purpose of transacting workers' compensation insurance and other public employment-related insurances. Existing law requires the board to invest and reinvest all moneys in the State Compensation Insurance Fund in excess of current requirements in the same manner as is authorized in certain provisions applicable to private insurance carriers. Existing law prohibits the board from investing or reinvesting in certain investments, including real estate and call options on common stock. Existing law, until January 1, 2025, authorizes the board to invest or reinvest an aggregated maximum of 20% of the moneys that are in excess of the admitted assets over the liabilities and required reserves in specified investments, including the stock of certain corporations and specified mortgage-related investment instruments. This bill would extend that investment authorization until January 1, 2027. The bill, until January 1, 2027, would also authorize the State Compensation Insurance Fund to make discretionary investments in properties and securities, and to invest in money market mutual funds, as specified.