TRENTON, N.J. – Assemblywoman Victoria Flynn’s bill increasing the competitive advantage of New Jersey-based insurance companies while potentially reducing policy costs for Garden State residents was signed into law Monday.
The law (A4785/S3409), which takes effect immediately, allows for higher foreign investment limitations, which gives New Jersey insurance companies the ability to have more diversified portfolios overall.
“This law levels the playing field for New Jersey insurers as companies in 36 other states across the nation have already been granted the same opportunities,” Flynn (R-Monmouth) said. “I am pleased to join my colleague Assemblyman McKeon across the aisle to take this step towards making New Jersey more affordable for its residents and more business friendly for the insurance industry.”
Insurance companies will now be permitted to invest up to 30% of assets in friendly foreign countries that have received a high rating from an independent, nationally recognized American rating agency. Companies cannot invest more than 10% in any one country.
“Any time we can allow insurance companies to meet their obligations to policyholders in a more cost-effective way is a win for New Jersey,” Flynn explained.
The largest foreign markets for U.S. insurance companies are the United Kingdom, Canada, Australia, the Netherlands and France. The most common investments for insurers include debt securities, such as bonds, and equity securities, such as stocks and mutual funds.
“Expanding opportunities for more diversified strategic investments serves the interests of both New Jersey insurance companies and policyholders,” Flynn said.