Subsection 14G of Section 63 of Chapter 175 of the General Laws is hereby amended by inserting after paragraph (3) the following paragraphs:-
(4) are of a bond exchange-traded fund registered under the Investment Company Act of 1940 (the “1940 Act”), 15 USC 80a-1 et seq. if:
(a) the exchange-traded fund is solvent and reported at least $100 million of net assets in the exchange-traded fund’s latest annual or more recent certified audited financial statement;
(b) the exchange-traded fund operates as a corporation, trust, or substantially similar legal structure registered with the U.S. Securities and Exchange Commission (“SEC”) under the 1940 Act and its offered shares are registered under the Securities Act of 1933 (the “Securities Act”). Each individual exchange-traded fund shall be treated as a separate investment company or issuer for purposes of the disclosure, liability and investor protection provisions of the 1940 Act and other federal securities laws;
(c) the National Association of Insurance Commissioners Securities Valuation Office (“NAIC-SVO”) has designated the exchange-traded fund as meeting the criteria to be placed on the list promulgated by the NAIC-SVO of exchange-traded funds eligible for reporting as a long-term bond in the Purposes and Procedures Manual (“ETF Bond List”) of the NAIC-SVO or successor publication;
(d) the exchange-traded fund uses the systematic value accounting methodology to calculate its Net Asset Value (“NAV”); and
(e) the amount of the insurance company’s investment in the exchange-traded fund does not exceed 15 percent of the insurance company’s capital and surplus.
The provisions of the subparagraph do not authorize an insurance company to invest in bond exchange-traded funds that has embedded structural features designed to deliver performance that does not track the full unlevered and positive return of the underlying index or exposure, including a leverage or inverse exchange-traded fund.
An insurer may deposit with the department shares of a bond exchange-traded fund described by Subsection (4) as a statutory deposit if state law requires a statutory deposit from the insurer.
The information contained in this website is for general information purposes only. The General Court provides this information as a public service and while we endeavor to keep the data accurate and current to the best of our ability, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.