2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 27 - Insurers' Rehabilitation And Liquidation Act › Section 38-27-475. Federal home loan banks and insurer-members, pledge collateral, delinquency proceedings.

(A) Notwithstanding any other provision of this chapter to the contrary, the receiver for an insurer-member shall not void any transfer of, or any obligation to transfer, money or any other property arising under or in connection with any federal home loan bank security agreement, or any pledge, security, collateral, or guarantee agreement, or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement made in the ordinary course of business and in compliance with the applicable federal home loan bank agreement. The receiver also may not void a redemption or repurchase of any stock or equity securities made by the federal home loan bank within four months of the commencement of the delinquency proceedings or which received prior approval of the receiver. However, a transfer is voidable if the transfer is made with the actual intent to hinder, delay, or defraud the insurer-member, existing creditors, or future creditors.
(B) If a federal home loan bank exercises its rights regarding collateral pledged by an insurer-member who is subject to a delinquency proceeding, the federal home loan bank shall repurchase any outstanding capital stock that is in excess of that amount of federal home loan bank stock that the insurer-member is required to hold as a minimum investment, to the extent the federal home loan bank in good faith determines the repurchase to be permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan, and consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.
(C) Following the appointment of a receiver for an insurer-member, the federal home loan bank shall, within ten business days after a request from the receiver is made, provide a process and establish timelines for the:
(1) release of collateral that exceeds the lendable collateral value, as determined pursuant to the advance agreement with the federal home loan bank, required to support secured obligations remaining after any repayment of advances;
(2) release of any of the insurer-member's collateral remaining in the federal home loan bank's possession following full repayment of all outstanding secured obligations of the insurer-member in full;
(3) payment of fees owed by the insurer-member and the operation of deposits and other accounts of the insurer-member with the federal home loan bank; and
(4) possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer-member is required to own.
(D) Upon request from the receiver for an insurer-member, the federal home loan bank shall provide any available options that an insurer-member may exercise to renew or restructure an advance to defer associated prepayment fees, subject to:
(1) market conditions;
(2) the terms of the advances outstanding to the insurer-member;
(3) the applicable policies of the federal home loan bank; and
(4) the compliance of the federal home loan bank with the Federal Home Loan Bank Act, 12 U.S.C. Section 1421, et seq., and corresponding regulations.
(E) Nothing in this section affects the rights of a receiver regarding advances to an insurer-member in delinquency proceedings pursuant to 12 C.F.R. Section 1266.4.
(F) The provisions of this section apply notwithstanding another provision of this chapter.
HISTORY: 2016 Act No. 190 (S.693), Section 1, eff May 26, 2016.