TRENTON, N.J. – Assemblywoman Vicky Flynn’s bill increasing the foreign investment limit for New Jersey-based insurance companies to align with accepted best practices cleared the Assembly Commerce and Economic Development Committee on Monday. Flynn argues New Jersey’s insurance companies are currently at a disadvantage and her bill would allow them to diversify their portfolios.
“Limiting foreign investment for insurers only increases the cost of doing business in New Jersey and has no benefit for policyholders,” Flynn (R-Monmouth) said. “This legislation would put New Jersey insurers on a level playing field with insurance companies in 36 other states. It is a sound practice that will ultimately allow insurance companies to meet their obligations to policyholders in a more cost effective way.”
The bill (A4785) allows insurance companies to invest up to 30% of assets in foreign countries that have received a high rating from an independent, nationally recognized American rating agency. Companies could invest no more than 10% in any one country.
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 helps insurance companies continue to pay claims to their policyholders and makes New Jersey a better place to run a business,” Flynn said.