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07/17/2024 05:33 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20130&cosponId=14851
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Senate Co-Sponsorship Memoranda

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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: June 10, 2014 10:19 AM
From: Senator John H. Eichelberger, Jr.
To: All Senate members
Subject: Federal Home Loan Banks and PA Insurance Companies
 
I will be introducing legislation to enable Pennsylvania insurance companies to receive better terms when borrowing from Federal Home Loan banks (FHLBanks), specifically in the Commonwealth, the FHLBank of Pittsburgh.

FHLBanks serve as a reliable source of long-term, low-cost funding for insurance companies. Because Pennsylvania law governing FHLBank lending to insurance companies differs from federal banking law, PA insurance companies borrow from FHLBanks on less advantageous terms (including collateral requirements) than do similarly rated depository institutions.

In 2013, the Federal Home Loan Banks worked with a National Association of Insurance Commissioners (NAIC) subgroup to study the issue. This legislation follows the NAIC recommendations.

Similar legislation has been passed in Delaware, Iowa, Colorado, Kansas, Oklahoma, Nebraska, Michigan and Indiana, and is being considered in other states where many insurers are domiciled. The legislation is supported by the American Council of Life Insurers and Pennsylvania insurers, such as Donegal Mutual Insurance Company.



Introduced as SB1415