Provides that an insurer may not invest in any medium or lower grade obligation if they exceed 20 percent of the total assets. Mr. Chorpenning answered that it is the standard used by the SVO of the National Association of Insurance Commissioners. Mr. Eberhart asked whether a bond changes grade over a period of time. Mr. Chorpenning said he will defer that question to others to answer. Mike Low, representing PMI Mortgage Insurance Company, testified that this legislation was requested by PMI to try to modernize the Arizona Investment Code and bring it up to the same standards that other states follow.
Current practice puts Arizona insurers at a competitive disadvantage.
Arizona has the greatest limitation because it permits no more than 20 percent of an insurer's assets to be invested in government revenue bonds. This should benefit Arizona cities and towns, and it puts Arizona insurance companies on a similar footing with competition in other states. He advised that the Department of Insurance supports this legislation. He urged Members to support H.B. 2382. Victor Bacigalupi, Senior Vice President and General Counsel, PMI Mortgage Insurance Company, testified that H.B. 2382 is of benefit to all domiciled insurance companies in Arizona.