Regards insurance transactions, plans, and policies

sb306_03_RH

As Reported by the House Insurance Committee

136th
General Assembly

Regular
Session
Sub. S. B. No. 306

2025-2026

Senator Lang

Cosponsors: Senators Craig, DeMora,
Hicks-Hudson, Johnson, Patton, Reineke

Representatives Lampton, Craig

To
amend sections 1345.02, 3901.046, 3905.01, 3906.01, 3906.08, 3907.14,
3925.08, 3964.03, 3964.194, 4509.70, 4513.70
,
and 4513.71

and to enact sections 1345.82 and 3905.0612 of the Revised Code

regarding
changes to Ohio insurance laws and certain towed vehicles and repair
shop activities.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
sections 1345.02, 3901.046, 3905.01, 3906.01, 3906.08, 3907.14,
3925.08, 3964.03, 3964.194, 4509.70, 4513.70
,
and 4513.71

be amended and sections 1345.82 and 3905.0612 of the Revised Code be
enacted to read as follows:

Sec.
1345.02.
(A)
No supplier shall commit an unfair or deceptive act or practice in
connection with a consumer transaction. Such an unfair or deceptive
act or practice by a supplier violates this section whether it occurs
before, during, or after the transaction.

(B)
Without limiting the scope of division (A) of this section, the act
or practice of a supplier in representing any of the following is
deceptive:

(1)
That the subject of a consumer transaction has sponsorship, approval,
performance characteristics, accessories, uses, or benefits that it
does not have;

(2)
That the subject of a consumer transaction is of a particular
standard, quality, grade, style, prescription, or model, if it is
not;

(3)
That the subject of a consumer transaction is new, or unused, if it
is not;

(4)
That the subject of a consumer transaction is available to the
consumer for a reason that does not exist;

(5)
That the subject of a consumer transaction has been supplied in
accordance with a previous representation, if it has not, except that
the act of a supplier in furnishing similar merchandise of equal or
greater value as a good faith substitute does not violate this
section;

(6)
That the subject of a consumer transaction will be supplied in
greater quantity than the supplier intends;

(7)
That replacement or repair is needed, if it is not;

(8)
That a specific price advantage exists, if it does not;

(9)
That the supplier has a sponsorship, approval, or affiliation that
the supplier does not have;

(10)
That a consumer transaction involves or does not involve a warranty,
a disclaimer of warranties or other rights, remedies, or obligations
if the representation is false.

(C)
In construing division (A) of this section, the court shall give due
consideration and great weight to federal trade commission orders,
trade regulation rules and guides, and the federal courts'
interpretations of subsection 45 (a)(1) of the "Federal Trade
Commission Act," 38 Stat. 717 (1914), 15 U.S.C.A. 41, as
amended.

(D)
No supplier shall offer to a consumer or represent that a consumer
will receive a rebate, discount, or other benefit as an inducement
for entering into a consumer transaction in return for giving the
supplier the names of prospective consumers, or otherwise helping the
supplier to enter into other consumer transactions, if earning the
benefit is contingent upon an event occurring after the consumer
enters into the transaction.

(E)(1)
No supplier, in connection with a consumer transaction involving
natural gas service or public telecommunications service to a
consumer in this state, shall request or submit, or cause to be
requested or submitted, a change in the consumer's provider of
natural gas service or public telecommunications service, without
first obtaining, or causing to be obtained, the verified consent of
the consumer. For the purpose of this division and with respect to
public telecommunications service only, the procedures necessary for
verifying the consent of a consumer shall be those prescribed by rule
by the public utilities commission for public telecommunications
service under division (D) of section 4905.72 of the Revised Code.
Also, for the purpose of this division, the act, omission, or failure
of any officer, agent, or other individual, acting for or employed by
another person, while acting within the scope of that authority or
employment, is the act or failure of that other person.

(2)
Consistent with the exclusion, under 47 C.F.R. 64.1100(a)(3), of
commercial mobile radio service providers from the verification
requirements adopted in 47 C.F.R. 64.1100, 64.1150, 64.1160, 64.1170,
64.1180, and 64.1190 by the federal communications commission,
division (E)(1) of this section does not apply to a provider of
commercial mobile radio service insofar as such provider is engaged
in the provision of commercial mobile radio service. However, when
that exclusion no longer is in effect, division (E)(1) of this
section shall apply to such a provider.

(3)
The attorney general may initiate criminal proceedings for a
prosecution under division (C) of section 1345.99 of the Revised Code
by presenting evidence of criminal violations to the prosecuting
attorney of any county in which the offense may be prosecuted. If the
prosecuting attorney does not prosecute the violations, or at the
request of the prosecuting attorney, the attorney general may proceed
in the prosecution with all the rights, privileges, and powers
conferred by law on prosecuting attorneys, including the power to
appear before grand juries and to interrogate witnesses before grand
juries.

(F)
Concerning a consumer transaction in connection with a residential
mortgage, and without limiting the scope of division (A) or (B) of
this section, the act of a supplier in doing either of the following
is deceptive:

(1)
Knowingly failing to provide disclosures required under state and
federal law;

(2)
Knowingly providing a disclosure that includes a material
misrepresentation.

(G)
Without limiting the scope of division (A) of this section, the
failure of a supplier to obtain or maintain any registration,
license, bond, or insurance required by state law or local ordinance
for the supplier to engage in the supplier's trade or profession is
an unfair or deceptive act or practice.

(H)
A violation of section 111.242 of the Revised Code is an unfair or
deceptive act or practice.

(I)
A violation of section 1345.82 of the Revised Code is an unfair or
deceptive act or practice.

Sec.
1345.82.
(A)(1)
As used in this section, "repair facility" means any
garage, body shop, or other entity that undertakes the repair or
replacement of those parts that generally constitute the exterior of
a motor vehicle.

(2)
"Repair facility" does not include an entity owned or
operated by a motor vehicle dealer, as defined in section 4517.01 of
the Revised Code.

(B)
No repair facility shall require a consumer to sign a contract that
interferes with a policy of insurance, prohibits an insurer or
consumer from commencing an action under section 4513.70 of the
Revised Code, or prohibits an insurer or consumer from filing a writ
of replevin under Chapter 2737. of the Revised Code.

(C)
No repair facility shall require a consumer to sign a contract
requiring the consumer to pay the legal fees of the repair facility
for filing any action designed to return the vehicle to the consumer.

(D)
No repair facility shall require a consumer to sign a contract
prohibiting the consumer from transferring the title of the vehicle
the consumer owns.

(E)
No repair facility, or third party acting on behalf of a repair
facility, shall represent, negotiate, obtain, or attempt to obtain an
assignment of claims, rights, benefits, power of attorney, or
proceeds from a consumer.

(F)(1)
A repair facility shall cease assessing or accruing any and all
charges for any fee reasonably related to storage, regardless of how
the fee is listed on a bill or list of charges, once either of the
following is met:

(a)
The repair facility has been notified by the insurer, or has
otherwise determined, that the vehicle has been deemed a total loss.

(b)
An insurance company files an action under section 4513.70 of the
Revised Code. Any fee described in division (F)(1) of this section by
a repair facility after an action under section 4513.70 of the
Revised Code is filed must be rescinded or refunded once the repair
facility receives notification of the action being filed.

(2)
Notification under division (F)(1) of this section may occur via
electronic mail, commercial carrier service, or the United States
postal service, or service or written notice from the insurance
company of a complaint being filed as described in division (B) of
section 4513.70 of the Revised Code.

(G)
A repair facility shall allow prompt access to the vehicle by the
insurer for the purposes of inspection and valuation of the loss. In
no case shall access be prohibited during normal business hours after
the vehicle is towed or otherwise delivered to the repair facility.

(H)
A violation of this section constitutes a deceptive act or practice
in connection with a consumer transaction in violation of section
1345.02 of the Revised Code and is subject to any applicable
penalties prescribed under Chapter 1345. of the Revised Code.

Sec.
3901.046.
(A)
As used in this section:

(1)
"Electronic signature" has the same meaning as in section
1306.01 of the Revised Code.

(2)
"Insurer" has the same meaning as in section 3901.32 of the
Revised Code.

(B)
An insurer may use an electronic signature to comply with any
signature requirement placed upon insurers by
this
title
the
Revised Code
,
including any requirement that a document submitted by an insurer to
the department of insurance be signed.

Sec.
3905.01.
As
used in this chapter:

(A)
"Affordable Care Act" means the "Patient Protection
and Affordable Care Act," 124 Stat. 119, 42 U.S.C. 18031 (2011).

(B)
"Business entity" means a corporation, association,
partnership, limited liability company, limited liability
partnership, or other legal entity.

(C)
"Home state" means the state or territory of the United
States, including the District of Columbia, in which an insurance
agent maintains the insurance agent's principal place of residence or
principal place of business and is licensed to act as an insurance
agent.

(D)
"In-person assister" means any person, other than a
navigator, who receives any funding from, or who is selected or
designated by, an exchange, the state, or the federal government to
perform any of the activities and duties identified in division (i)
of section 1311 of the Affordable Care Act. "In-person assister"
includes any individual that is employed by, supervised by, or
affiliated with an in-person assister and performs any of the
activities and duties identified in division (i) of section 1311 of
the Affordable Care Act, any non-navigator assistance personnel, and
any other person deemed as such by rules adopted by the
superintendent under division (L) of section 3905.471 of the Revised
Code.

(E)
"Insurance" means any of the lines of authority set forth
in Chapter 1739., 1751., or 1761. or Title XXXIX of the Revised Code,
or as additionally determined by the superintendent of insurance.

(F)
"Insurance agent" or "agent" means any person
that, in order to sell, solicit, or negotiate insurance, is required
to be licensed under the laws of this state, including limited lines
insurance agents

and
,

surplus line brokers
,
and investment adviser insurance agents
.

(G)
"Insurer" has the same meaning as in section 3901.32 of the
Revised Code.

(H)
"License" means the authority issued by the superintendent
to a person to act as an insurance agent for the lines of authority
specified, but that does not create any actual, apparent, or inherent
authority in the person to represent or commit an insurer.

(I)
"Limited line credit insurance" means credit life, credit
disability, credit property, credit unemployment, involuntary
unemployment, mortgage life, mortgage guaranty, mortgage disability,
guaranteed automobile protection insurance, or any other form of
insurance offered in connection with an extension of credit that is
limited to partially or wholly extinguishing that credit obligation
and that is designated by the superintendent as limited line credit
insurance.

(J)
"Limited line credit insurance agent" means a person that
sells, solicits, or negotiates one or more forms of limited line
credit insurance to individuals through a master, corporate, group,
or individual policy.

(K)
"Limited lines insurance" means those lines of authority
set forth in divisions (B)(7) to (13) of section 3905.06 of the
Revised Code or in rules adopted by the superintendent, or any lines
of authority the superintendent considers necessary to recognize for
purposes of complying with section 3905.072 of the Revised Code.

(L)
"Limited lines insurance agent" means a person authorized
by the superintendent to sell, solicit, or negotiate limited lines
insurance.

(M)
"NAIC" means the national association of insurance
commissioners.

(N)
"Insurance navigator" means a person selected to perform
the activities and duties identified in division (i) of section 1311
of the Affordable Care Act that is certified by the superintendent of
insurance under section 3905.471 of the Revised Code. "Insurance
navigator" refers to a navigator specified in section 1311 of
the Affordable Care Act, 42 U.S.C. 13031.

(O)
"Negotiate" means to confer directly with, or offer advice
directly to, a purchaser or prospective purchaser of a particular
contract of insurance with respect to the substantive benefits,
terms, or conditions of the contract, provided the person that is
conferring or offering advice either sells insurance or obtains
insurance from insurers for purchasers.

(P)
"Person" means an individual or a business entity.

(Q)
"Sell" means to exchange a contract of insurance by any
means, for money or its equivalent, on behalf of an insurer.

(R)
"Self-service storage facility" means an entity that is
engaged in the business of providing real property designed and used
for the purpose of renting or leasing individual storage space to the
public who are to have access to the space for the purpose of storing
and removing personal property on a self-service basis, but does not
include a garage or other storage area in a private residence.

(S)
"Solicit" means to attempt to sell insurance, or to ask or
urge a person to apply for a particular kind of insurance from a
particular insurer.

(T)
"Superintendent" or "superintendent of insurance"
means the superintendent of insurance of this state.

(U)
"Terminate" means to cancel the relationship between an
insurance agent and the insurer or to terminate an insurance agent's
authority to transact insurance.

(V)
"Uniform application" means the NAIC uniform application
for resident and nonresident agent licensing, as amended by the NAIC
from time to time.

(W)
"Uniform business entity application" means the NAIC
uniform business entity application for resident and nonresident
business entities, as amended by the NAIC from time to time.

(X)
"Exchange" means a health benefit exchange established by
the state government of Ohio or an exchange established by the United
States department of health and human services in accordance with the
"Patient Protection and Affordable Care Act," 124 Stat.
119, 42 U.S.C. 18031 (2011).

(Y)
"Investment adviser insurance agent" means a person
licensed by the superintendent under section 3905.0612 of the Revised
Code.

Sec.
3905.0612.

(A)(1) The superintendent of insurance may adopt rules as necessary
to provide for an investment adviser insurance agent license.

(2)
If adopted, such rules may address all of the following:

(a)
Examination of applicants administered by the department of
insurance;

(b)
Product training;

(c)
Supervision by the insurer issuing the product;

(d)
Any other topics deemed necessary by the superintendent.

(B)
Upon adoption of the rules authorized under division (A) of this
section, the superintendent of insurance shall issue an investment
adviser insurance agent license to an individual applicant whose home
state is Ohio upon submission of a completed application and payment
of any applicable fee required under this chapter, if the
superintendent finds all of the following:

(1)
The applicant meets all requirements prescribed by the
superintendent.

(2)
The applicant seeks to provide advice for a fee established in
advance by written contract in the business of any of the following:

(a)
Analyzing or abstracting insurance policies;

(b)
Providing insurance advice or counseling;

(c)
Making specific recommendations or comparisons of insurance products.

(3)
The applicant is either of the following:

(a)
An investment adviser, as defined in section 1707.01 of the Revised
Code, registered and in good standing in this state or under the
"Investment Advisers Act of 1940," 15 U.S.C. 80b-2, et
seq.;

(b)
An investment adviser representative, as defined in section 1707.01
of the Revised Code, licensed in this state or acting as a supervised
person of an investment adviser registered under the "Investment
Advisers Act of 1940," 15 U.S.C, 80b-1, et seq.

(4)
The applicant meets all requirements prescribed by division (A)(1) of
section 3905.06 of the Revised Code.

(C)
Notwithstanding division (A)(1)(e) of section 3905.06 of the Revised
Code or any other provision of the Revised Code to the contrary, an
applicant applying for a variable life-variable annuity line of
authority who otherwise meets all the requirements prescribed in this
section is not required to be registered with the financial industry
regulatory authority as a registered representative in order to
obtain an investment adviser insurance agent license.

(D)(1)
Before an investment adviser insurance agent may sell, solicit, or
negotiate an insurance product or undertake any of the advice
activities described in division (B)(2) of this section, the
investment adviser insurance agent and the insurer issuing such
product shall enter into a written contract governing their
relationship and their respective obligations with respect to all of
the following:

(a)
Supervision;

(b)
Monitoring;

(c)
Product-specific training;

(d)
Review of recommendations;

(e)
Responding to insurance examinations and investigations;

(f)
Termination of the relationship;

(g)
Compliance with all applicable laws and regulations.

(2)
Notwithstanding division (D)(1) of this section, the superintendent
of insurance may adopt rules prescribing additional requirements for
such contracts, including requirements related to registration with
and notification to the department of insurance.

(E)
Notwithstanding any provision of the Revised Code to the contrary, an
investment adviser insurance agent who meets all requirements of this
section and any related rules, based solely on the sale,
solicitation, or negotiation of any product of an insurer, the
receipt of compensation from the insurer, or both, shall not be
deemed as acting as an agent of such an insurer for purposes of
division (A) of section 3905.20 of the Revised Code and is not
required to be appointed by such insurer.

Sec.
3906.01.
As
used in this chapter:

(A)
"Annual financial statement" means an insurer's statutorily
required financial statement under the insurer's respective
authorizing chapter of the Revised Code.

(B)
"Authorized control level risked-based capital" means
authorized control level RBC as defined in sections 1753.31 and
3903.81 of the Revised Code.

(C)
"Cash equivalent" means a short-term, highly liquid
investment that is both readily convertible to known amounts of cash
and so near its maturity that it presents an insignificant risk of
change in value because of changes in interest rates, and that has an
original maturity date, to the entity holding the investment, of
three months or less.

(D)
"Covered" means that an insurer owns, or can immediately
acquire through the exercise of options, warrants, or conversion
rights already owned, the underlying interest in order to fulfill or
secure its obligation under the option, cap, or floor it has written.

(E)(1)
"Derivative instrument" means an agreement, option,
instrument, or a series or a combination thereof of either of the
following types:

(a)
To make or take delivery of, or assume or relinquish, a specified
amount of one or more underlying interest, or to make a cash
settlement in lieu thereof;

(b)
That has a price, performance, value, or cash flow based primarily
upon the actual or expected price, level, performance, value, or cash
flow of one or more underlying interests.

(2)
"Derivative instrument" includes options, warrants, caps,
floors, collars, swaps, forwards, futures, and any other agreements,
options, or instruments substantially similar thereto or any series
or combination thereof.

(F)
"Derivative transaction" means a transaction involving the
use of one or more derivative instruments.

(G)
"Hedging transaction" means a derivative transaction that
is entered into and maintained to reduce either of the following:

(1)
The risk of economic loss due to a change in the value, yield, price,
cash flow, or quantity of assets or liabilities that the insurer has
acquired or incurred or anticipates acquiring or incurring;

(2)
The currency exchange rate risk or the degree of exposure as to
assets or liabilities that an insurer has acquired or incurred or
anticipates acquiring or incurring.

(H)
"Income generation" means a derivative transaction
involving the writing of covered options, caps, or floors that is
intended to generate income or enhance return.

(I)
"Lower-grade investment" means a rated credit instrument or
debt-like preferred stock
rated

designated

4,
5, or 6 by the securities valuation office.

(J)
"Medium-grade investment" means a rated credit instrument
or debt-like preferred stock
rated

designated

3
by the securities valuation office.

(K)
"Minimum asset requirement" is the requirement that an
insurer maintain assets in an amount equal to the sum of the
insurer's liabilities and its minimum financial security benchmark,
as required by division (A) of section 3906.11 of the Revised Code.

(L)
"Minimum financial security benchmark" is the amount an
insurer is required to have under section 3906.03 of the Revised
Code.

(M)
"Replication transaction" means a derivative transaction
that is intended to replicate the performance of one or more assets
that an insurer is authorized to acquire under this chapter.
"Replication transaction" does not include a derivative
transaction that is entered into as a hedging transaction.

(N)
"Securities valuation office" means the securities
valuation office of the national association of insurance
commissioners or any successor office.

(O)
"Securities valuation office listed mutual fund" means a
money market mutual fund or short-term bond fund that is registered
with the United States securities and exchange commission under the
"Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C.
80a-1 to 80a-64, and that has been determined by the securities
valuation office to be eligible for special reserve and reporting
treatment, rather than as common stock.

(P)
"Securities valuation office listed exchange traded fund"
means a bond or preferred stock exchange traded fund that is
registered with the United States securities and exchange commission
under the "Investment Company Act of 1940," 54 Stat. 789,
15 U.S.C. 80a-1 to 80a-64, and that has been
rated

designated

1
or 2 by the securities valuation office and determined by the office
to be eligible for special reserve and reporting treatment, rather
than as common stock.

(Q)
"Superintendent" means the superintendent of insurance.

Sec.
3906.08.
(A)
For the purposes of determining an insurer's minimum asset
requirement under section 3906.11 of the Revised Code, the following
limitations on classes of investments shall apply:

(1)
For investments authorized by division (B) of section 3906.07 of the
Revised Code and investments authorized by division (G) of section
3906.07 of the Revised Code that are of the types described in
division (B) of section 3906.07 of the Revised Code the following
limitations shall apply:

(a)
The aggregate amount of medium- and lower-grade investments shall be
not more than twenty per cent of an insurer's admitted assets.

(b)
The aggregate amount of lower-grade investments shall be not more
than ten per cent of an insurer's admitted assets.

(c)
The aggregate amount of investments
rated

designated

5
or 6 by the securities valuation office shall be not more than five
per cent of the insurer's admitted assets.

(d)
The aggregate amount of investments
rated

designated

6
by the securities valuation office shall be not more than one per
cent of an insurer's admitted assets.

(e)
The aggregate amount of medium- and lower-grade investments that
receive as cash income less than the yield for treasury issues with a
comparative average life shall be not more than one per cent of an
insurer's admitted assets.

(2)
Investments authorized by division (C) of section 3906.07 of the
Revised Code shall be not more than forty-five per cent of an
insurer's admitted assets in the case of life insurers and not more
than twenty-five per cent of an insurer's admitted assets in the case
of insurers that are not life insurers.

(3)
Investments authorized by division (D) of section 3906.07 of the
Revised Code shall be not more than twenty per cent of an insurer's
admitted assets in the case of life insurers and not more than
twenty-five per cent of an insurer's admitted assets in the case of
insurers that are not life insurers.

(4)
Investments authorized by division (E) of section 3906.07 of the
Revised Code shall be not more than ten per cent of an insurer's
admitted assets.

(5)
Investments authorized by division (F) of section 3906.07 of the
Revised Code shall be not more than ten per cent of an insurer's
admitted assets.

(6)
Investments authorized by division (G) of section 3906.07 of the
Revised Code shall be not more than twenty per cent of an insurer's
admitted assets.

(7)
Investments authorized by division (H) of section 3906.07 of the
Revised Code shall be not more than two per cent of an insurer's
admitted assets.

(8)
Investments authorized by division (J) of section 3906.07 of the
Revised Code shall be not more than ten per cent of an insurer's
admitted assets in the case of life insurers and not more than three
per cent of an insurer's admitted assets in the case of insurers that
are not life insurers. An insurer may exceed the limits described in
division (A)(8) of this section with investments in a wholly owned
domestic insurer, or in a corporation, or similar business entity
organized under the laws of the United States, any state thereof, or
any other jurisdiction approved by the superintendent, that is formed
and maintained to acquire or hold shares of an insurer, with the
prior written consent of the superintendent.

(B)(1)
For purposes of determining compliance with section 3906.11 of the
Revised Code, securities issued by a single entity and its
affiliates, other than the government of the United States, or
agencies whose securities are backed by the full faith and credit of
the United States, and subsidiaries authorized under division (J) of
section 3906.07 of the Revised Code, shall be not more than five per
cent of an insurer's admitted assets in the case of life insurers and
shall be not more than five per cent of an insurer's admitted assets
in the case of insurers that are non-life insurers.

(2)
Notwithstanding division (B)(1) of this section, investments in the
voting securities of a depository institution, or any company that
controls a depository institution, shall not exceed five per cent of
an insurer's admitted assets.

(C)
For purposes of determining compliance with this section, the
admitted portion of assets of subsidiaries of an insurer invested in
under division (J) of section 3906.07 of the Revised Code shall be
deemed to be owned directly by the insurer and any other investors in
proportion to the market value of their interest in the subsidiaries.
If interest in the subsidiary has no market value, then the asset
allocation proportion shall be determined by the reasonable value of
interest in the subsidiary as determined under the national
association of insurance commissioners' accounting practices and
procedures manual.

(D)
If the superintendent considers it necessary to get a proper
evaluation of the investment portfolio of an insurer, the
superintendent may require that investments in mutual funds, exchange
traded funds, pooled investment vehicles, or other investment
companies be treated for purposes of this chapter as if the investor
owned directly its proportional share of the assets owned by the
mutual fund, exchange traded fund, pooled investment vehicle, or
investment company.

(E)
Unless otherwise specified in this chapter, an insurer's investment
limitations shall be computed using the insurer's general account
admitted assets, capital, or surplus as reported in the insurer's
most recent annual financial statement required to be filed with the
superintendent.

Sec.
3907.14.
The
capital, surplus, and all accumulations of every domestic life
insurance company shall be invested as follows:

(A)
A domestic company may acquire, hold, and convey real estate:

(1)
Which has been acquired or is acquired for its principal offices, or
which is used in connection therewith, provided that it shall not
invest more than five per cent of its admitted assets on the
preceding thirty-first day of December in such real estate;

(2)
Which has been mortgaged to it in good faith by way of security for
loans previously contracted or for money due;

(3)
Which has been conveyed to it in satisfaction of debts previously
contracted in the course of its dealings, or which it may receive in
or on account of an exchange for real estate acquired in its
operations;

(4)
Which it has purchased at sales under mortgages and on any legal
process in connection with its investments or under decrees obtained
or made for such debts;

(5)
Which is acquired, owned, or held for the purpose of developing,
improving, or otherwise utilizing such real estate for the production
of income, without restriction or limitation as to time, and may
acquire, lease, hold, and manage personal property used in connection
therewith. No investments in real estate to be used primarily for
recreational, agricultural, or mining purposes shall be made under
authority of division (A)(5) of this section and except for
investments authorized under divisions (A)(1), (2), (3), and (4) of
this section, no domestic life insurance company shall invest in real
estate under divisions (A)(5) and (R) of this section a sum exceeding
in the aggregate ten per cent of its admitted assets on the preceding
thirty-first day of December.

All
real estate specified in divisions (A)(3) and (4) of this section,
which is not necessary for its accommodation in the convenient
transaction of its business, shall be sold by the company and
disposed of within five years after it has acquired the title to such
real estate or within five years after such real estate has ceased to
be necessary for the accommodation of its business, unless the
company procures the certificate of the superintendent of insurance
that its interests will suffer materially by a forced sale of the
real estate, in which event the time for the sale may be extended to
such time as the superintendent directs in such certificate.

(B)
A domestic company may acquire, hold, and convey tangible personal
property or interests therein for the production of income, provided
no domestic company shall invest in excess of two per cent of its
admitted assets as of the preceding thirty-first day of December
under this division.

(C)
In loans and liens upon the security of its own policies, not
exceeding the reserve or present value of the policies, computed
according to any standard authorized by law or according to such
higher standard as the company has adopted and maintains on the
policy, the reserve being the amount of debts of the life insurance
company by reason of its outstanding policies in gross, which may be
so treated in the returns for taxation made by it;

(D)
In bankers' acceptances and bills of exchange of the kinds and
maturities made eligible by law for rediscount with federal reserve
banks, provided that such acceptances and bills of exchange are
accepted by a bank or trust company incorporated under the laws of
the United States or of this state or any other bank or trust company
which is a member of the federal reserve system;

(E)
In equipment trust obligations or certificates, security agreements,
or other evidences of indebtedness entered into directly or
guaranteed by any company operating wholly or partly within the
United States or Canada, provided that the debt obligation is secured
by a first lien on tangible personal property which is purchased or
secured for payment thereof and the debt obligation is repayable
within twenty years from the date of issue in annual, semiannual, or
more frequent installments beginning not later than the first year
after such date;

(F)
In bonds issued by or for federal land banks and any debentures
issued by or for federal intermediate credit banks under the "Federal
Farm Loan Act of 1916," 39 Stat. 360, 12 U.S.C.A. 641 as
amended; any debentures issued by or for banks for cooperatives under
the "Farm Credit Act of 1933," 48 Stat. 257, 12 U.S.C.A.
131 as amended;

(G)
In bonds issued under the "Home Owners' Loan Act of 1933,"
48 Stat. 128, 12 U.S.C.A. 1461;

(H)
In notes, bonds, debentures, or other such obligations issued by the
federal housing administrator;

(I)(1)(a)
In bonds or other evidences of indebtedness, not in default as to
principal or interest, which are valid obligations issued, assumed or
guaranteed by the United States, by any state thereof, by the
Commonwealth of Puerto Rico, by any territory or insular possession
of the United States, or by the District of Columbia, or which are
valid obligations issued, assumed, or guaranteed by any county,
municipal corporation, district, or political subdivision, or by any
civil division or public instrumentality of such governmental units,
if by statutory or other legal requirements such obligations are
payable, as to both principal and interest, from taxes levied upon
all taxable property within the jurisdiction of such governmental
unit;

(b)
In bonds or other obligations issued by or for account of any such
governmental unit having a population of five thousand or more by the
latest official federal or state census, which are payable as to both
principal and interest from revenues or earnings from the whole or
any part of a publicly owned utility supplying water, gas, sewage
disposal facility, or electricity, or any or all of them, provided
that by statute or other applicable legal requirements, rates from
the service or operation of such utility must be fixed, maintained,
and collected at all times so as to produce sufficient revenues or
earnings to pay both principal and interest of such bonds or
obligations as they become due;

(c)
In any bonds or obligations payable from and secured by revenues of
the United States, the Commonwealth of Puerto Rico, or any state or
instrumentality of any of them, or of the District of Columbia or of
any commission, board, or other instrumentality of one or more of
them, provided there is a specific pledge of revenues, and provided
that there is adequate provision for payment of interest prior to
completion of construction and that rates, fees, tolls, or charges
fixed are, after completion of construction, sufficient to pay all
expenses of operation and maintenance and the principal and interest
when due.

(2)
In legally authorized and executed bonds, notes, warrants, and
securities which are the direct obligation of or are guaranteed by
Canada, or which are the direct obligation of or are guaranteed as to
both principal and interest by any province of Canada, or which are
the direct obligation of or are guaranteed as to both principal and
interest by any municipality of Canada having a population of fifty
thousand or more by the latest official census, and which are not in
default as to principal or interest;

(3)
In bonds or other evidence of indebtedness, not in default as to
principal or interest, which are valid obligations issued, assumed,
or guaranteed by the United States, by any state thereof, the
Commonwealth of Puerto Rico, or by the District of Columbia, if by
statutory or other legal requirements such obligations are payable,
as to both principal and interest, from selective taxes levied by
such governmental unit.

(J)(1)
In mortgage bonds which are the direct obligation of a railroad, and
which are the first lien on a substantial portion of its property,
situated wholly in the United States or partly in the United States
and partly in Canada, the average net yearly earnings of which, after
deducting proper charges for maintenance of way and equipment, for
the five fiscal years preceding such investments, have been at least
one and one-half times the average yearly interest for the same
period on its mortgages, bonds, and funded debts, and in the junior
mortgage bond issues of such railroad corporations of the same
character and under the same conditions where the average net yearly
earnings for the five fiscal years preceding such investment, after
deducting proper charges for maintenance of way and equipment, have
been at least three times the average yearly interest charges on such
issues and all prior liens; or in the mortgage bonds of any
incorporated railroad company which have been assumed or guaranteed,
both as to principal and interest, by any incorporated railroad
company whose bonds constitute a legal investment under division
(J)(1) of this section. In applying the earnings test to any issuing,
assuming, or guaranteeing company, whether or not in legal existence
during the whole of such five years next preceding the date of
investment by such insurer, which has at any time during such
five-year period acquired the assets of any other company by
purchase, merger, consolidation, or otherwise, substantially as an
entirety, or has been reorganized pursuant to the bankruptcy law, the
earnings of such other predecessor or constituent companies, or of
the company so reorganized, available for interest for such portion
of such period that has preceded such acquisition, or such
reorganization, may be included in the earnings of such issuing,
assuming, or guaranteeing company for such portion of such period as
is determined in accordance with adjusted or pro forma consolidated
earnings statements covering such portion of such period. In such
cases the requirements as to earnings shall be based upon the
mortgages, bonds, and funded debts as they exist immediately after
such acquisitions or such reorganizations.

(2)
In mortgage bonds or other interest-bearing obligations of terminal
companies organized under the laws of the United States or any state
thereof, provided such bonds or obligations have been assumed or
guaranteed jointly or severally by two or more railroad corporations
whose bonds constitute legal investments under division (J)(1) of
this section;

(3)
In loans to veterans guaranteed in whole or in part by the United
States pursuant to Title III of the "Servicemen's Readjustment
Act of 1944," 58 Stat. 284, 38 U.S.C.A. 693, as amended,
provided such guaranteed loans are liens upon real estate;

(4)
In mortgage bonds which are the direct obligation of and first lien
upon the property of a corporation engaged directly and primarily in
the production and sale of, or in the purchase and sale of
electricity or gas, or in the operation of telephone or telegraph
systems or waterworks, or in some combination of them, and situated
wholly in the United States, or the Commonwealth of Puerto Rico, or
partly in the United States and partly in Canada, the average net
yearly earnings of which, after deducting proper charges for
replacements, depreciation, and obsolescence, for the five fiscal
years preceding such investment, have been at least one and one-half
times the average yearly interest for the same period on its
mortgages, bonds, and funded debts;

(5)
Any such corporation, or any of its predecessors, constituent, or
successor corporations, must have been in business not less than ten
years prior to the date of the purchase of such bonds, and must not
have defaulted on the interest or principal of any of its bonds or
funded debts outstanding during the five years immediately preceding
the date of purchase, provided that division (J)(5) of this section
does not preclude investments in mortgage bonds of railroads
reorganized through purchase of assets, merger, consolidation,
bankruptcy proceedings, or otherwise if such bonds are eligible for
investment under division (J)(1) of this section;

(6)
No investment shall be made under division (J)(1), (2), (4), or (5)
of this section if such railroad or other utility corporation and its
business, and its issue of bonds, funded debts, and stocks are not
under the supervision and control of an authorized state or federal
official or commission, provided that division (J)(6) of this section
does not apply to the mortgage bonds or other interest-bearing
obligations of companies engaged in the operation of telephone or
telegraph systems.

(K)(1)
In bonds or notes secured by mortgages or deeds of trust which are a
first lien upon unencumbered fee simple real estate in any state, the
Commonwealth of Puerto Rico, the District of Columbia, or Canada,
provided the amount loaned does not exceed eighty per cent of the
actual market value of such property.

The
actual market value of any such property shall be shown by a
valuation and appraisement in writing by a qualified land appraiser.

In
the event the amount loaned under division (K)(1) of this section
exceeds eighty per cent of the actual market value of the land, the
structures on the land must be insured by an authorized fire
insurance company or covered by other comparable indemnification, and
the policies or indemnifications shall be payable or assigned to the
mortgagee or to a trustee in its behalf and shall be held by the
mortgagee or an agent of the mortgagee or by such trustee; or in lieu
of holding such policies or indemnifications, the mortgagee may
purchase a policy or policies of mortgage protection insurance,
payable to the mortgagee or a trustee in its behalf, insuring the
mortgagee against loss resulting from the failure of the mortgagor to
acquire and maintain, from such an authorized fire insurance company
or other comparable source, insurance or indemnification.

(2)
In bonds or notes secured by mortgages insured by the federal housing
administrator;

(3)
In bonds or notes secured by mortgages or deeds of trust which are a
first lien on leasehold estates in wholly or partly improved real
property, unencumbered, except rentals accruing from the property to
the owner of the fee, provided that any loan secured by a leasehold
estate must provide for amortization by repayment of principal at
least once in each year in amounts sufficient to repay the loan
within a period of four-fifths of the unexpired term of the leasehold
but within a period of not more than thirty years, and further
provided that the amount loaned on the leasehold estate does not
exceed seventy-five per cent of total market value of the leasehold
estate determined by appraisements in writing made under oath by two
real estate owners, residents of the county or local district in
which the real estate is located, or by a qualified land appraiser;
if the amount loaned exceeds seventy-five per cent of the value of
that portion of the leasehold estate represented by the value of the
land, exclusive of improvements on the land, such improvements shall
be insured against fire for the benefit of the mortgagee in an amount
not less than the difference between seventy-five per cent of the
value of such land, exclusive of buildings, and the amount loaned;
the policies for such amount shall be payable to and held by the
mortgagee or a trustee named in the lease who shall be required by
the terms of said lease to use and apply the proceeds of such
insurance for repairing, restoring, or rebuilding such buildings;

(4)
The following shall not be considered as prior liens or encumbrances
in the construction and application of this section: leasehold
estates of any duration, rights-of-way, servitudes, joint driveways,
easements, party wall agreements, current taxes and assessments not
delinquent, and restrictions as to building, use, and occupancy.

(5)
This section does not prohibit a domestic life insurance company from
renewing or extending a loan for the original or a lesser amount nor
does it prohibit a company from accepting as part payment for real
estate sold by it a mortgage on the real estate for a greater
percentage of the purchase price of the real estate than is otherwise
permitted by this section.

(L)
In bonds, notes, or other evidences of indebtedness of corporations,
trusts, partnerships, or similar business entities organized under
the laws of the United States, or any state thereof, the Commonwealth
of Puerto Rico, the District of Columbia, or Canada or any province
of Canada, secured by assignment of lease or leases or the rentals
payable under such leases, of real or personal property or both to
(1) the United States or any instrumentality thereof, or any state of
the United States, the Commonwealth of Puerto Rico, or the District
of Columbia, or any county, city, town, school, or water district,
authority, or other political subdivision in any such government, or
Canada, any province of Canada, or any municipal corporation of
Canada that has a population of fifty thousand or more by the latest
official census; or (2) one or more corporations, trusts,
partnerships, or similar business entities organized under the laws
of the United States, any state thereof, the Commonwealth of Puerto
Rico, the District of Columbia, or Canada or any province of Canada,
provided that (a) the fixed rentals assigned shall be sufficient to
repay the indebtedness within the unexpired term of the lease,
exclusive of the term which may be provided by an enforceable option
of renewal; (b) such lessee has not defaulted in payment of interest
or principal on any of its bonds, notes, debentures, or other
evidences of indebtedness during the five years immediately preceding
the date of the investment, and provided the average net earnings
available for fixed charges of such lessee under division (L)(2) of
this section for not less than five fiscal years preceding such
investment have been at least one and one-half times average fixed
charges for that period and during either of the last two years of
such period, the net earnings available for fixed charges shall have
been not less than one and one-half times fixed charges for such
year, except that railroad companies and utility companies may
qualify as lessees herein by application of the earnings test
provided for railroads under division (J)(1) of this section and for
utilities under division (J)(4) of this section; and (c) a first lien
on the interest of the lessor in the unencumbered property so leased
shall be obtained as additional security for the indebtedness;

(M)
In ground rents, land trust certificates, or fee ownership
certificates representing or evidencing beneficial ownership of or
interest in improved real estate under lease for not less than
twenty-five years from the date of such lease, in which it must be
provided that the lessee shall pay all taxes and assessments levied
on or assessed against said real estate, shall maintain the
improvements on the real estate in good repair, and shall provide and
maintain fire insurance in an amount equal to the insurable value of
the building on the real estate; provided:

(1)
The value of the land and improvements shall be evidenced by an
appraisement made under oath by a disinterested appraiser resident in
and the owner of real estate in the city in which the property is
situated, and such appraisement shall not be less than one and
sixty-seven hundredths times the amount of such land trust
certificates, which amount shall be not less than twenty times the
net annual rental distributable to holders of outstanding
certificates;

(2)
Such beneficial interests shall only be in properties on which actual
earning records for five years immediately preceding are available;

(3)
Such declaration of trust or other trust instrument shall provide for
a depreciation or other similar fund, in an amount which is not less
than nine per cent of the net annual distributable rental, for the
benefit of the holders of outstanding certificates.

(N)(1)
In certificates of deposit or other evidence of indebtedness of a
savings and loan association provided the certificates or other
evidence of deposit are insured pursuant to the "Financial
Institutions Reform, Recovery, and Enforcement Act of 1989," 103
Stat. 183, 12 U.S.C.A. 1811, as amended;

(2)
In interest-bearing obligations, including savings accounts and time
certificates of deposit of a national bank or state bank provided
such bank is a member of the federal deposit insurance corporation
created pursuant to the "Banking Act of 1933," 92 Stat.
624, 12 U.S.C.A. 624, as amended.

(O)
In obligations issued, assumed, or guaranteed by the international
finance corporation or by the international bank for reconstruction
and development, the Asian development bank, the inter-American
development bank, the African development bank, or other similar
development bank in which the president, as authorized by congress
and on behalf of the United States, has accepted membership;

(P)(1)
In the preferred stocks of any company organized under the laws of
the United States or of any state thereof engaged directly and
primarily in the production and sale of, or in the purchase and sale
of electricity or gas, or in the operation of telephone or telegraph
systems or water works, or in some combination of them, if the
average annual net earnings of such company, for not less than five
fiscal years preceding purchase thereof, after deduction of interest
on all mortgages, bonds, debentures, and funded debts and after
deduction of the proper charges for replacements, depreciation, and
obsolescence, have been at least two times the average yearly amount
which is required to pay the dividends or distributions on all
preferred stocks; and in which the mortgages, bonds, debentures,
funded debts, and preferred stocks shall not in the aggregate exceed
seventy per cent of the total capitalization of such company,
including mortgages, bonds, debentures, funded debts, and preferred
and common stocks;

(2)
In the preferred stocks of any other company organized under the laws
of the United States, or of any state thereof if the average annual
net earnings of such company for a period of not less than five
fiscal years preceding purchase thereof, after deduction of interest
on all mortgages, bonds, debentures, and funded debts and after
deduction of the proper charges for replacements, depreciation, and
obsolescence, have been at least four times the amount which is
required to pay the dividends or distributions on all preferred
stocks, and in which the mortgages, bonds, debentures, funded debts,
and preferred stocks shall not in the aggregate exceed sixty per cent
of the total capitalization of such company, including mortgages,
bonds, debentures, funded debts, and preferred and common stocks;

(3)
A domestic life insurance company shall not purchase any preferred
stocks when the total market values of such stocks then owned with
those purchased exceed in the aggregate of book values and purchase
price the capital, surplus, and contingency funds, excluding all
reserves required by law, of such company on the thirty-first day of
December preceding the date of such purchase, or contemplated
purchase, provided that in case of appreciations in values of stocks
owned the cost rather than the market values shall be used in
arriving at such aggregate; the purpose being to restrict the
investments of such company in all preferred stocks to capital,
surplus, and contingency funds.

(4)
In the bonds, notes, debentures, or other evidences of indebtedness
of a solvent corporation, trust, partnership, or similar business
entity existing under the laws of the United States, of any state
thereof, the Commonwealth of Puerto Rico, or Canada or any province
of Canada, provided that
either
any
of the following apply
:

(a)
The bonds, notes, debentures, or other evidences of indebtedness of
such corporation, trust, partnership, or similar business entity are

rated

designated

1
or 2 by the securities valuation office of the national association
of insurance commissioners;

(b)
The corporation, trust, partnership, or similar business entity has
not defaulted in payment of interest or principal on any of its
bonds, notes, debentures, or other evidences of indebtedness during
the five years immediately preceding the date of purchase, and the
average annual net earnings of such corporation, trust, partnership,
or similar business entity that are available for fixed charges for
not less than five fiscal years preceding such purchase have been at
least one and one-half times the average fixed charges of such
corporation, trust, partnership, or similar business entity for that
period and during either of the last two years of such period, the
net earnings available for fixed charges shall have been not less
than one and one-half times the fixed charges of such corporation,
trust, partnership, or similar business entity for such year
;

(c)
The bonds, notes, debentures, or other evidences of indebtedness of
such corporation, trust, partnership, or similar business entity are
designated 3, 4, 5, or 6 by the securities valuation office of the
national association of insurance commissioners subject to the
following limits:

(i)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 3, 4, 5, and 6 does not
exceed twenty per cent of the insurer's admitted assets;

(ii)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 4, 5, and 6 does not
exceed ten per cent of the insurer's admitted assets;

(iii)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 5 and 6 does not exceed
three per cent of the insurer's admitted assets;

(iv)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 6 does not exceed one
per cent of the insurer's admitted assets;

(v)
The aggregate amount of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 3, 4, 5, and 6 that
receive as cash income less than the yield for treasury issues with a
comparative average life shall be not more than one per cent of an
insurer's admitted assets
.

(5)
In common stocks or shares of any solvent incorporated company
organized under the laws of the United States, or of any state,
district, or territory thereof, or the Commonwealth of Puerto Rico,
provided that a dividend or distribution has been paid by the
corporation in the preceding twelve months upon such stock to be
purchased, or that such corporation, together with its predecessor
corporation or corporations, has been in existence for a period of at
least five years. No domestic company shall invest in common stock or
shares under divisions (P)(5) and (R) of this section a sum exceeding
in the aggregate ten per cent of its admitted assets on the preceding
thirty-first day of December.

(6)
In the stocks, limited liability company membership interests,
limited partnership interests, or limited liability partnership
interests of insurance, financial, investment, and investment
management companies, which investment management companies are
registered with the securities and exchange commission under the
"Investment Company Act of 1940," 54 Stat. 789, 15 80a-1,
as amended, or the stocks, limited liability company membership
interests, limited partnership interests, or limited liability
partnership interests in an entity wholly owned by a domestic company
or by a domestic company and its affiliates, that is formed and
maintained to acquire or hold specific assets or liabilities for
bankruptcy remoteness or limitation of liability purposes, except its
own stock, but no domestic life insurance company shall invest in
such stocks, limited liability company membership interests, or
limited liability partnership interests under division (P)(6) of this
section, exclusive of its investments in stocks or limited liability
company membership interests of insurance company subsidiaries or
subsidiaries engaged exclusively in the ownership of insurance
company subsidiaries, a sum exceeding the lesser of fifty per cent of
its policyholder surplus or ten per cent of its admitted assets as of
the preceding thirty-first day of December unless the approval of the
superintendent of insurance is first obtained. Whenever the
superintendent has reason to believe that the retention, investment,
or acquisition of the stock, limited liability company membership
interest, limited partnership interest, or limited liability
partnership interest of any such company substantially lessens
competition generally in the business of insurance or creates a
monopoly therein the superintendent shall proceed under section
3901.13 of the Revised Code to cause such domestic insurance company
to divest itself of such stock, limited liability company membership
interest, limited partnership interest, or limited liability
partnership interest.

(7)(a)
In bonds, notes, debentures, or other evidences of indebtedness
issued, assumed, or guaranteed by a solvent corporation, trust, or
partnership formed or existing under the laws of a foreign
jurisdiction, provided each such foreign investment is of the same
kind and quality as United States investments authorized under this
section; or in common or preferred stock, shares, membership
interest, or partnership interest of any solvent business entity
formed or existing under the laws of a foreign jurisdiction provided
each such foreign investment is of the same kind and quality as
United States investments authorized under this section; or in bonds
or other evidences of indebtedness issued, assumed, or guaranteed by
a foreign jurisdiction.

An
insurer shall not invest in foreign investments under division (P)(7)
of this section, including investments denominated in foreign
currency, a sum exceeding in the aggregate
fifteen

twenty

per
cent of its admitted assets as of the preceding thirty-first day of
December. The aggregate amount of investments held by an insurer in a
single foreign jurisdiction shall not exceed
three

seven

per
cent of its admitted assets as of the preceding thirty-first day of
December.

As
used in division (P)(7)(a) of this section, "foreign
jurisdiction" means a jurisdiction outside the United States,
Puerto Rico, or Canada, whose bonds are
rated

designated

1

or 2

by the securities valuation office of the national association of
insurance commissioners.

(b)
An insurer may acquire investments denominated in foreign currency
whether or not they are foreign investments.

An
insurer shall not invest in investments denominated in foreign
currency a sum exceeding in the aggregate
ten

twenty

per
cent of its admitted assets as of the preceding thirty-first day of
December

provided the foreign currency is appropriately hedged. Such foreign
currency is limited to ten per cent of its admitted assets as of the
preceding thirty-first day of December if not hedged
.
The aggregate amount of investments denominated in a single foreign
currency held by an insurer shall not exceed
three

seven

per
cent of an insurer's admitted assets as of the preceding thirty-first
day of December

provided the foreign currency is appropriately hedged. Such foreign
currency is limited to three per cent of its admitted assets as of
the preceding thirty-first day of December if not hedged
.

(c)
As used in division (P)(7) of this section, "foreign currency"
means a currency other than that of the United States.

(8)
An insurer may invest without limitation in investments of government
money market funds. As used in division (P)(8) of this section,
"government money market fund" means a mutual fund that at
all times invests in obligations issued, guaranteed, or insured by
the federal government of the United States, or collateralized
repurchase agreements comprised of these obligations, and that
qualifies for investment without a reserve pursuant to the purposes
and procedures of the securities valuation office of the national
association of insurance commissioners.

(Q)
In loans upon the pledge of any securities in which such companies
are authorized by this section to invest, provided that any loan upon
such a pledge shall not exceed eighty per cent of the cash market
value of the collateral at the time of the making of such loan and at
the end of each twelve-month period thereafter, and such company,
through the collateral pledged to it, shall not exceed the amounts
which it may, under this section, invest in one corporation so that,
in the stocks and securities which may be owned and those which are
pledged to it, the limitations in this section might be indirectly
evaded;

(R)(1)
Any domestic legal reserve life insurance company may loan or invest
its funds, to an extent not exceeding in the aggregate
five

ten

per
cent of its total admitted assets, in loans or investments not
permitted under this section. Any such company may also invest up to
an additional five per cent of its total admitted assets, in loans or
investments in small businesses having more than half of their assets
or employees in this state and in venture capital firms having an
office within this state, provided that, as a condition of a company
making an investment in a venture capital firm, the firm must agree
to use its best efforts to make investments, in an aggregate amount
at least equal to the investment to be made by the company in that
venture capital firm, in small businesses having their principal
offices within this state and having either more than one-half of
their assets within this state or more than one-half of their
employees employed within this state.

As
used in division (R) of this section:

(a)
"Small businesses" means any corporation, partnership,
proprietorship, or other entity that either does not have more than
four hundred employees, or would qualify as a small business for the
purpose of receiving financial assistance from small business
investment companies licensed under the "Small Business
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as
amended, and rules of the small business administration.

(b)
"Venture capital firms" means any corporation, partnership,
proprietorship, or other entity, the principal business of which is
or will be the making of investments in small businesses.

(c)
"Investments" means any equity investment, including
limited partnership interests and other equity interests in which
liability is limited to the amount of the investment, but does not
include general partnership interests or other interests involving
general liability.

(2)
In the event that, subsequent to being made under provisions of
division (R) of this section, an investment is determined to have
become qualified as an investment for a domestic life insurance
company as provided for in this section, the company may consider
such investment as held under the applicable provisions of the
foregoing divisions (A) to (Q) of this section and such investment
shall no longer be considered as having been made under the
provisions of this division.

(S)(1)
No domestic life insurance company shall subscribe to or participate
in any underwriting for the purchase or sale of securities or
property, nor shall it enter into any such transaction for purchase
or sale on account of said company jointly with any other person, nor
shall any such company enter into any agreement to withhold from sale
any of its property, but the disposition of its property shall be at
all times within the control of its board of directors. Nothing
contained in division (S)(1) of this section shall be construed to
invalidate or prohibit an agreement by an insurance company for the
purchase for its own account of an entire issue of the securities of
a corporation or to invalidate or prohibit an agreement by an
insurance company and one or more other investors to join and share
in the purchase of investments for their individual accounts and for
bona fide investment purposes.

(2)
In the determination of capitalization in this section the value of
all bonds, debentures, and funded debts, and nonconvertible or
nonparticipating preferred stocks shall be figured at par.
Participating or convertible preferred shares shall be figured at par
or market on the preceding thirty-first day of December, whichever is
higher, and the value of all common shares shall be figured at the
market on the preceding thirty-first day of December.

(3)
As used in this section:

(a)
"Funded debt" means all interest-bearing obligations
maturing in more than one year from their issuance and all guaranteed
or assumed interest-bearing obligations or stock. Securities or stock
of a corporation pledged to secure other funded debt of the
corporation are not included in the funded debt.

(b)
"Fixed charges" include actual interest incurred in each
year on funded and unfunded debt and annual apportionment of debt
discount or premium. Where interest is partially or entirely
contingent upon earnings, "fixed charges" include
contingent interest payments.

(c)
"Net earnings available for fixed charges" means income
after deducting operating and maintenance expenses, taxes other than
income taxes, depreciation, and depletion. Extraordinary,
nonrecurring items of income or expense shall be excluded.

(4)
Except as provided in a plan of mutualization adopted pursuant to the
provisions of sections 3913.01 to 3913.10 of the Revised Code, no
domestic life insurance company may invest in or loan upon its own
stock, either directly or indirectly.

(5)
If the investments of any domestic life insurance company are at the
time of the making thereof or on October 13, 1953, otherwise than as
authorized in this section, such investments shall not be admitted or
accepted as authorized investments for such company.

(6)
Any earnings test provided for in this section shall be deemed to
have been met if the requirements of such earnings test are met by
any company which assumes or guarantees the investment or which
assumes or guarantees the performance of any lease which is the
security for the investment. In applying any such earnings test, the
operations of a company's predecessor companies, if any, for the
stipulated period shall be included.

(7)
No domestic life insurance company shall at any time have invested in
or loaned upon the security of the obligations, property, or
securities of a particular corporation, trust, partnership, or
similar business entity a sum exceeding the greater of two per cent
of its admitted assets as of the preceding thirty-first day of
December or twenty-five per cent of that portion of its capital and
surplus, or its surplus in the case of a mutual company, that exceeds
the minimum required capital and surplus under section 3907.05 of the
Revised Code unless the approval of the superintendent of insurance
is first obtained. The restrictions of division (S)(7) of this
section do not apply to divisions (C), (F), (G), (H), (P)(6), and (R)
of this section or to any valid obligation issued, assumed, or
guaranteed by the United States, or any state thereof, the
Commonwealth of Puerto Rico, the District of Columbia, or Canada or
any province of Canada. For purposes of division (S)(7) of this
section, such company may, at its option, consider either the lessor
or the lessee under division (L) of this section to be the person to
whom any such investment or loan is made.

(8)
This section does not affect the propriety or legality of an
investment made by a domestic life insurance company which was in
accordance with the laws in force at the time of the making of the
investment.

(T)
A domestic life insurance company may seek permission from the
superintendent of insurance to invest funds under Chapter 3906. of
the Revised Code and may invest funds under that chapter if such
permission is granted.

(U)
As used in divisions (U) and (V) of this section:

(1)
"Covered" means that an insurer owns, or can immediately
acquire through the exercise of options, warrants, or conversion
rights already owned, the underlying interest in order to fulfill or
secure its obligation under the option, cap, or floor it has written.

(2)(a)
"Derivative instrument" means an agreement, option,
instrument, or a series or combination thereof of either of the
following types:

(i)
To make or take delivery of, or assume or relinquish, a specified
amount of one or more underlying interests, or to make a cash
settlement in lieu thereof;

(ii)
That has a price, performance, value, or cash flow based primarily
upon the actual or expected price, level, performance, value, or cash
flow of one or more underlying interests.

(b)
Derivative instruments include options, warrants, caps, floors,
collars, swaps, forwards, futures, and any other agreements, options,
or instruments substantially similar thereto or any series or
combination thereof.

(3)
"Derivative transaction" means a transaction involving the
use of one or more derivative instruments.

(4)
"Hedging transaction" means a derivative transaction that
is entered into and maintained to reduce either of the following:

(a)
The risk of economic loss due to a change in the value, yield, price,
cash flow, or quantity of assets or liabilities that the insurer has
acquired or incurred or anticipates acquiring or incurring;

(b)
The currency exchange rate risk or the degree of exposure as to
assets or liabilities that an insurer has acquired or incurred or
anticipates acquiring or incurring.

(5)
"Income generation" means a derivative transaction
involving the writing of covered options, caps, or floors that is
intended to generate income or enhance return.

(6)
"Replication transaction" means a derivative transaction
that is intended to replicate the performance of one or more assets
that an insurer is authorized to acquire under this chapter.
"Replication transaction" does not include a derivative
transaction that is entered into as a hedging transaction.

(V)(1)
Prior to an insurer entering into derivative transactions, the board
of directors of the insurer shall approve a derivative use plan.

(2)
An insurer shall notify the superintendent of insurance in writing
within three days after identifying either of the following:

(a)
Any event or occurrence related to an insurer's derivatives use that
may lead to a material change to the insurer's policyholder surplus;

(b)
Any event or occurrence related to an insurer's derivatives use that,
with the passage of time, may lead to a material change to the
insurer's policyholder surplus.

(3)
Prior to entering into derivative transactions, an insurer shall file
with the superintendent a copy of its derivative use plan and
internal controls, for informational purposes. The insurer shall keep
current the copy of its derivative use plan and internal controls
filed with the superintendent. The insurer shall not enter into
derivative transactions until thirty calendar days after the date on
which the derivative use plan and internal controls is filed with the
superintendent. This thirty-calendar-day period is to begin on the
date that the superintendent receives the derivative use plan and
internal controls.

(4)
The superintendent may adopt rules prescribing the form and content
of derivative use plans, as well as any internal controls the
superintendent considers necessary.

(5)
An insurer that engages in hedging transactions or replication
transactions shall do both of the following:

(a)
Maintain its position in any outstanding derivative instrument used
as part of a hedging transaction or replication transaction for as
long as the hedging transaction or replication transaction continues
to be effective;

(b)
Demonstrate to the superintendent, upon request, that any derivative
transaction entered into and involving hedging transaction or
replication transaction is an effective hedging transaction or
replication transaction. The insurer must be able to demonstrate this
at the time the derivative transaction is entered into, and for as
long as the transaction continues to be in place.

(6)
An insurer may not invest in, or use, a derivative instrument for any
purpose other than a hedging transaction, income generation, or
replication.

(7)
An insurer shall not invest in, or use a derivative instrument for
purposes of income generation in a sum exceeding in the aggregate
five per cent of its admitted assets, as of the preceding
thirty-first day of December.

(8)
All documents provided to the superintendent under division (V) of
this section shall be deemed trade secrets and shall be provided with
trade secret protection. Such documents shall also be considered work
papers of the superintendent that are subject to section 3901.48 of
the Revised Code and are confidential and privileged and shall not be
considered a public record, as defined in section 149.43 of the
Revised Code. The original documents and any copies of them shall not
be subject to subpoena and shall not be made public by the
superintendent or any other person, except as otherwise provided in
section 3901.48 of the Revised Code.

Sec.
3925.08.
Funds
accumulated in the course of business, or surplus money above the
capital stock, of any company organized under any law of this state,
for the purpose provided in section 3925.01 of the Revised Code,
shall only be loaned or invested in the securities listed in sections
3925.05 and 3925.06 of the Revised Code, or in the following:

(A)(1)
Bonds and mortgages on unencumbered real estate within this or any
other state worth twenty-five per cent more than the sum loaned
thereon, exclusive of buildings, unless such buildings are insured in
some company authorized to do business in this state, and the policy
is transferred to the company making the investment; or, in lieu of
transferring such policies, the mortgagee may purchase a policy or
policies of mortgage protection insurance, payable to the mortgagee
or a trustee in its behalf, insuring the mortgagee against loss
resulting from the failure of the mortgagor to acquire and maintain,
from such an authorized insurance company, insurance in the amount
required by this section;

(2)
Bonds or notes secured by mortgages insured by the federal housing
administrator;

(3)
Loans to veterans guaranteed in whole or in part by the United States
pursuant to Title III of the "Servicemen's Readjustment Act of
1944," 58 Stat. 284, 38 U.S.C. 693, as amended, provided such
guaranteed loans are liens upon real estate.

(B)(1)
Legally authorized and executed bonds, notes, warrants, and
securities which are the direct obligation of or are guaranteed as to
both principal and interest by Canada, or which are the direct
obligation of or are guaranteed as to both principal and interest by
any province of Canada, or which are the direct obligation of or are
guaranteed as to both principal and interest by any municipal
corporation of Canada having a population of one hundred thousand or
more by the latest official census, and which are not in default as
to principal or interest;

(2)
Obligations issued, assumed, or guaranteed by the international
finance corporation or by the international bank for reconstruction
and development, the Asian development bank, the inter-American
development bank, the African development bank, or similar
development bank in which the president, as authorized by congress
and on behalf of the United States, has accepted membership.

(C)
Bonds or other evidences of indebtedness, not in default as to
principal or interest, which are valid obligations issued, assumed,
or guaranteed by the United States, by any state thereof, the
Commonwealth of Puerto Rico, by any territory or insular possession
of the United States, or by the District of Columbia, or which are
valid obligations issued, assumed, or guaranteed by any county,
municipal corporation, district, or political subdivision, or by any
civil division or public instrumentality of such governmental units,
if by statutory or other legal requirements such obligations are
payable, as to both principal and interest, from taxes levied upon
all taxable property within the jurisdiction of such governmental
unit, or in bonds or other obligations issued by or for account of
any such governmental unit having a population of five thousand or
more by the latest official federal or state census, which are
payable as to both principal and interest from revenues or earnings
from the whole or any part of a publicly owned utility, provided that
by statute or other applicable legal requirements, rates from the
service or operation of such utility must be fixed, maintained, and
collected at all times so as to produce sufficient revenues or
earnings to pay both principal and interest of such bonds or
obligations as they become due, and in any bonds or obligations
issued or guaranteed by the United States, any state, the District of
Columbia, the Commonwealth of Puerto Rico, any county, municipal
corporation, district, political subdivision, civil division,
commission, board, authority, agency, or other instrumentality of one
or more of them, provided there is a specific pledge of revenues,
earnings, or other adequate security and provided that no prior or
parity obligation of the same issuer, payable from revenues or
earnings from the same source, has been in default as to principal or
interest during the five years next preceding the date of such
investment, but such issuer need not have been in existence for that
period, and obligations acquired under this section may be newly
issued, and further provided that there is adequate provision for
payment of expenses of operation and maintenance and the principal
and interest on all obligations when due;

(D)(1)
Bonds or other evidences of indebtedness, bearing or accruing
interest, issued, assumed, or guaranteed by any solvent corporation,
trust, partnership, or similar business entity organized and existing
under the laws of this or any other state, or of the United States,
the Commonwealth of Puerto Rico, or of the District of Columbia, or
of Canada or any province of Canada, upon which there is no existing
interest or principal default, provided that
either
any
of the following apply
:

(a)
The bonds or other evidences of indebtedness are
rated

designated

1
or 2 by the securities valuation office of the national association
of insurance commissioners;

(b)
The corporation, together with its predecessor corporation or
corporations, or the trust, partnership, or similar business entity,
has been in existence for a period of at least five years
;

(c)
The bonds, notes, debentures, or other evidences of indebtedness of
such corporation, trust, partnership, or similar business entity are
designated 3, 4, 5, or 6 by the securities valuation office of the
national association of insurance commissioners, subject to the
following limits:

(i)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 3, 4, 5, and 6 does not
exceed twenty per cent of the insurer's admitted assets;

(ii)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 4, 5, and 6 does not
exceed ten per cent of the insurer's admitted assets;

(iii)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 5 and 6 does not exceed
three per cent of the insurer's admitted assets;

(iv)
The aggregate of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 6 does not exceed one
per cent of the insurer's admitted assets;

(v)
The aggregate amount of all such bonds, notes, debentures, or other
evidences of indebtedness that are designated 3, 4, 5, and 6 that
receive as cash income less than the yield for treasury issues with a
comparative average life shall be not more than one per cent of an
insurer's admitted assets
.

(2)
Stocks, limited liability company membership interests, limited
partnership interests, or limited liability partnership interests of
any insurance, financial, investment, or investment management
companies, which investment management companies are registered with
the securities and exchange commission under the "Investment
Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1, as amended,
or the stocks, limited liability company membership interests,
limited partnership interests, or limited liability partnership
interests in an entity wholly owned by a domestic company or by a
domestic company and its affiliates, that is formed and maintained to
acquire or hold specific assets or liabilities for bankruptcy
remoteness or limitation of liability purposes, except its own stock,
and stocks, limited liability company membership interests, limited
partnership interests, limited liability partnership interests,
bonds, notes, and debentures of any company which is organized for,
and limited in its operations to, the financing of insurance
premiums, upon approval of such investments by the superintendent of
insurance; except that approval shall not be required for the
purchase of the outstanding stocks, limited liability company
membership interests, limited partnership interests, or limited
liability partnership interests of any such company, if investment in
each such company does not exceed in the aggregate two and one-half
per cent of the total admitted assets of the company making the
investment as of the preceding thirty-first day of December. Whenever
the superintendent has reason to believe that the retention,
investment, or acquisition of the stock, limited liability company
membership interest, limited partnership interest, or limited
liability partnership interest of any such company substantially
lessens competition generally in the business of insurance or creates
a monopoly therein the superintendent shall proceed under section
3901.13 of the Revised Code to cause such domestic insurance company
to divest itself of such stock, limited liability company membership
interest, limited partnership interest, or limited liability
partnership interest.

(3)
Other stocks, limited liability company membership interests, or
limited partnership interests, or limited liability partnership
interests of any solvent corporation organized under the laws of this
or any other state, or of the United States, or of the District of
Columbia, or of Canada or any province of Canada, provided that a
dividend or distribution has been paid by the business entity in the
preceding twelve months upon the stock, membership interest, or
partnership interest to be purchased or such business entity,
together with its predecessor entity or entities, has been in
existence for a period of at least five years.

(4)
A domestic company may acquire, hold, and convey tangible personal
property or interests therein for the production of income, provided
no domestic company shall invest in excess of two per cent of its
admitted assets as of the preceding thirty-first day of December
under this division.

(5)
In equipment trust obligations or certificates, security agreements,
or other evidences of indebtedness entered into directly or
guaranteed by any company operating wholly or partly within the
United States or Canada, provided that such debt obligation is
secured by a first lien on tangible personal property which is
purchased or secured for payment thereof and such debt obligation is
repayable within twenty years from the date of issue in annual,
semiannual, or more frequent installments beginning not later than
the first year after such date.

(6)
An insurer may invest without limitation in investments of government
money market funds. As used in division (D)(6) of this section,
"government money market fund" means a fund that at all
times invests in obligations issued, guaranteed, or insured by the
federal government of the United States or collateralized repurchase
agreements comprised of such obligations, and that qualifies for
investment without a reserve pursuant to the purposes and procedures
of the securities valuation office of the national association of
insurance commissioners.

(E)
Negotiable promissory notes maturing in not more than six months from
the date thereof, secured by collateral security through the transfer
of any of the classes of securities described in this section or in
sections 3925.05 and 3925.06 of the Revised Code, with absolute power
of sale within twenty days after default in payment at maturity;

(F)(1)
Repurchase agreements with, and interest-bearing obligations,
including savings accounts and time certificates of deposit of, a
national bank of the United States, a commonwealth bank of Puerto
Rico, a chartered bank of Canada, or a state bank, provided such bank
is either a member of the federal deposit insurance corporation
created pursuant to the "Banking Act of 1933," as amended,
or the Canada deposit insurance corporation created pursuant to the
act of parliament known as the "Canada Deposit Insurance
Corporation Act," as amended.

(2)
Certificates of deposit, savings share accounts, investment share
accounts, stock deposits, stock certificates, or other evidences of
indebtedness of a savings and loan association, provided all such
evidences of indebtedness are insured pursuant to the "Financial
Institutions Reform, Recovery, and Enforcement Act of 1989," 103
Stat. 183, 12 U.S.C.A. 1811, as amended;

(3)
Bankers' acceptances and bills of exchange of the kinds and
maturities made eligible by law for rediscount with the federal
reserve banks, provided that the same are accepted by a bank or trust
company incorporated under the laws of the United States or of this
state or any other bank or trust company which is a member of the
federal reserve system.

(G)
Any securities issued as a result of any reorganization, or capital
or debt adjustment, in whole or in part, in exchange for securities
acquired by it prior to such reorganization, or capital or debt
adjustment;

(H)(1)
In bonds, notes, debentures, or other evidences of indebtedness
issued, assumed, or guaranteed by a solvent corporation, trust, or
partnership formed or existing under the laws of a foreign
jurisdiction, provided each such foreign investment is of the same
kind and quality as United States investments authorized under this
section; or in common or preferred stock, shares, membership
interests, or partnership interests of any solvent business entity
formed or existing under the laws of a foreign jurisdiction, provided
each such foreign investment is of the same kind and quality as
United States investments authorized under this section; or in bonds
or other evidences of indebtedness issued, assumed, or guaranteed by
a foreign jurisdiction.

An
insurer shall not invest in foreign investments under division (H) of
this section, including investments denominated in foreign currency,
a sum exceeding in the aggregate
fifteen

twenty

per
cent of its admitted assets as of the preceding thirty-first day of
December. The aggregate amount of investments held by an insurer in a
single foreign jurisdiction shall not exceed
three

seven

per
cent of its admitted assets as of the preceding thirty-first day of
December.

As
used in division (H)(1) of this section, "foreign jurisdiction"
means a jurisdiction outside the United States, Puerto Rico, or
Canada whose bonds are
rated

designated

1

or 2

by the securities valuation office of the national association of
insurance commissioners.

(2)
An insurer may acquire investments denominated in foreign currency
whether or not they are foreign investments.

An
insurer shall not invest in investments denominated in foreign
currency a sum exceeding in the aggregate
fifteen

twenty

per
cent of its admitted assets as of the preceding thirty-first day of
December

provided the foreign currency is appropriately hedged. Such foreign
currency is limited to ten per cent of its admitted assets as of the
preceding thirty-first day of December if not hedged
.
The aggregate amount of investments denominated in a single foreign
currency held by an insurer shall not exceed
three

seven

per
cent of an insurer's admitted assets as of the preceding thirty-first
day of December

provided the foreign currency is appropriately hedged. Such single
foreign currency is limited to three per cent of its admitted assets
as of the preceding thirty-first day of December if not hedged
.

(3)
As used in division (H) of this section, "foreign currency"
means a currency other than that of the United States.

(I)(1)
Any securities or other property not permitted under section 3925.05,
3925.06, 3925.08, or 3925.20 of the Revised Code to an extent not
exceeding in the aggregate
six

ten

per
cent of the total admitted assets of such company on the preceding
thirty-first day of December, within the limitations prescribed in
division (J) of this section. Any such company may also invest up to
an additional five per cent of the total admitted assets of such
company on the preceding thirty-first day of December, within the
limitations prescribed in division (J) of this section, in loans or
investments in small businesses having more than half of their assets
or employees in this state and in venture capital firms having an
office within this state, provided that, as a condition of a company
making an investment in a venture capital firm, the firm must agree
to use its best efforts to make investments, in an aggregate amount
at least equal to the investment to be made by the company in that
venture capital firm, in small businesses having their principal
offices within this state and having either more than one-half of
their assets within this state or more than one-half of their
employees employed within this state.

As
used in division (I) of this section:

(a)
"Small businesses" means any corporation, partnership,
proprietorship, or other entity that either does not have more than
four hundred employees, or would qualify as a small business for the
purpose of receiving financial assistance from small business
investment companies licensed under the "Small Business
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as
amended, and rules of the small business administration.

(b)
"Venture capital firms" means any corporation, partnership,
proprietorship, or other entity, the principal business of which is
or will be the making of investments in small businesses.

(c)
"Investments" means any equity investment, including
limited partnership interests and other equity interests in which
liability is limited to the amount of the investment, but does not
include general partnership interests or other interests involving
general liability.

(2)
In the event that, subsequent to being made under this division, a
loan or investment is determined to have become qualified as a loan
or investment under any of the divisions (A) to (F) of this section
or under section 3925.05, 3925.06, or 3925.20 of the Revised Code,
the company may consider such loan or investment as held under such
other statutory provision and such loan or investment shall no longer
be considered as having been made under this division.

(J)
No domestic insurance company shall at any time have invested a sum
exceeding five per cent of its admitted assets as of the preceding
thirty-first day of December in the bonds, notes, debentures, other
evidences of indebtedness, and stocks of a particular corporation,
trust, partnership, or similar business entity, except for
investments authorized under divisions (A) and (D)(2) of this
section, and no domestic insurance company together with its
subsidiary, if any, shall at any time own directly or indirectly more
than twenty-five per cent of the outstanding bonds, notes,
debentures, other evidences of indebtedness, and stocks of any
corporation, except for investments authorized under divisions (A)
and (D)(2) of this section.

This
section does not affect the propriety or legality of an investment
made by such domestic insurance company which was in accordance with
the laws in force at the time of the making of the investment.

A
business entity organized for the purpose provided in section 3925.01
of the Revised Code may seek permission from the superintendent of
insurance to invest funds under Chapter 3906. of the Revised Code and
may invest funds under that chapter if such permission is granted.

(K)
As used in divisions (K) and (L) of this section:

(1)
"Covered" means that an insurer owns, or can immediately
acquire through the exercise of options, warrants, or conversion
rights already owned, the underlying interest in order to fulfill or
secure its obligation under the option, cap, or floor it has written.

(2)(a)
"Derivative instrument" means an agreement, option,
instrument, or a series or combination thereof of either of the
following types:

(i)
To make or take delivery of, or assume or relinquish, a specified
amount of one or more underlying interest, or to make a cash
settlement in lieu thereof;

(ii)
That has a price, performance, value, or cash flow based primarily
upon the actual or expected price, level, performance, value, or cash
flow of one or more underlying interests.

(b)
Derivative instruments include options, warrants, caps, floors,
collars, swaps, forwards, futures, and any other agreements, options,
or instruments substantially similar thereto or any series or
combination thereof.

(3)
"Derivative transaction" means a transaction involving the
use of one or more derivative instruments.

(4)
"Hedging transaction" means a derivative transaction that
is entered into and maintained to reduce either of the following:

(a)
The risk of economic loss due to a change in the value, yield, price,
cash flow, or quantity of assets or liabilities that the insurer has
acquired or incurred or anticipates acquiring or incurring;

(b)
The currency exchange rate risk or the degree of exposure as to
assets or liabilities that an insurer has acquired or incurred or
anticipates acquiring or incurring.

(5)
"Income generation" means a derivative transaction
involving the writing of covered options, caps, or floors that is
intended to generate income or enhance return.

(6)
"Replication transaction" means a derivative transaction
that is intended to replicate the performance of one or more assets
that an insurer is authorized to acquire under this chapter.
"Replication transaction" does not include a derivative
transaction that is entered into as a hedging transaction.

(L)(1)
Prior to an insurer entering into derivative transactions, the board
of directors of the insurer shall approve a derivative use plan.

(2)
An insurer shall notify the superintendent of insurance in writing
within three days after identifying either of the following:

(a)
Any event or occurrence related to an insurer's derivatives use that
may lead to a material change to the insurer's policyholder surplus;

(b)
Any event or occurrence related to an insurer's derivatives use that,
with the passage of time, may lead to a material change to the
insurer's policyholder surplus.

(3)
Prior to entering into derivative transactions, an insurer shall file
with the superintendent a copy of its derivative use plan and
internal controls, for informational purposes. The insurer shall keep
current the copy of its derivative use plan and internal controls
filed with the superintendent. The insurer shall not enter into
derivative transactions until thirty calendar days after the date on
which the derivative use plan and internal controls is filed with the
superintendent. This thirty-calendar-day period is to begin on the
date that the superintendent receives the derivative use plan and
internal controls.

(4)
The superintendent may adopt rules prescribing the form and content
of derivative use plans, as well as any internal controls the
superintendent considers necessary.

(5)
An insurer that engages in hedging transactions or replication
transactions shall do both of the following:

(a)
Maintain its position in any outstanding derivative instrument used
as part of a hedging transaction or replication transaction for as
long as the hedging transaction or replication transaction continues
to be effective;

(b)
Demonstrate to the superintendent, upon request, that any derivative
transaction entered into and involving hedging transaction or
replication transaction is an effective hedging transaction or
replication transaction. The insurer must be able to demonstrate this
at the time the derivative transaction is entered into, and for as
long as the transaction continues to be in place.

(6)
An insurer may not invest in, or use, a derivative instrument for any
purpose other than a hedging transaction, income generation, or
replication.

(7)
An insurer shall not invest in, or use a derivative instrument for
purposes of income generation a sum exceeding in the aggregate five
per cent of its admitted assets, as of the preceding thirty-first day
of December.

(8)
All documents provided to the superintendent under division (L) of
this section shall be deemed trade secrets and shall be provided with
trade secret protection. Such documents shall also be considered work
papers of the superintendent that are subject to section 3901.48 of
the Revised Code and are confidential and privileged and shall not be
considered a public record, as defined in section 149.43 of the
Revised Code. The original documents and any copies of them shall not
be subject to subpoena and shall not be made public by the
superintendent or any other person, except as otherwise provided in
section 3901.48 of the Revised Code.

Sec.
3964.03.
(A)
A captive insurance company shall be organized under Chapter 1701.,
1702., 1705., or 1706. of the Revised Code.

(B)
A captive insurance company shall not operate in this state unless
all of the following are met:

(1)
The captive insurance company obtains from the superintendent a
license to do the business of captive insurance in this state.

(2)
The captive insurance company's board of directors holds at least one
meeting each year in this state.

(3)
The captive insurance company maintains its principal place of
business in this state.

(4)
The person managing the captive insurance company is a resident of
this state.

(5)
The captive insurance company appoints a registered agent to accept
service of process and act on its behalf in this state.

(C)
Whenever an agent required under division (B)(5) of this section
cannot, with reasonable diligence, be found at the registered office
of the captive insurance company, the superintendent shall be an
agent of such a captive insurance company upon whom any process,
notice, or demand may be served.

(D)
A captive insurance company seeking a license to be a captive
insurance company in this state shall file an application with the
superintendent and shall submit all of the following along with the
application:

(1)
A certified copy of its articles of incorporation, bylaws, or other
organizational document and code of regulations;

(2)
A statement, made under oath by the president and secretary, in a
form prescribed by the superintendent, showing the captive insurance
company's financial condition;

(3)
A statement of the captive insurance company's assets relative to its
risks, detailing the amount of assets and their liquidity;

(4)
An account of the adequacy of the expertise, experience, and
character of the person or persons who will manage the captive
insurance company;

(5)
An account of the loss prevention programs of the persons that the
captive insurance company insures;

(6)
Actuarial assumptions and methodologies that will be utilized in
calculating reserves;

(7)
Any other information considered necessary by the superintendent to
determine whether the proposed captive insurance company will be able
to meet its obligations.

(E)(1)
A special purpose financial captive insurance company shall follow
the national association of insurance commissioner's accounting
practices and procedures manual.

(2)(a)
Upon request, the superintendent may allow a special purpose
financial captive insurance company to
use

do
either of the following:

(i)
Use
a
reserve basis other than that found in the national association of
insurance commissioner's accounting practices and procedures manual
;

(ii)
Admit an unimpaired asset held by the special purpose financial
captive insurance company or any affiliate entity, which is intended
to secure the reinsurance obligations of such parties, or which is
not recognized as such in the national association of insurance
commissioner's accounting practices and procedures manual
.

(b)
The superintendent, in accordance with Chapter 119. of the Revised
Code, shall adopt rules that define acceptable alternative reserve
bases.

(c)
Such rules shall be adopted prior to availability for use of any such
alternative reserve basis and shall ensure that the resulting
reserves meet all of the following conditions:

(i)
Quantify the benefits and guarantees, and the funding, associated
with the contracts and their risks at a level of conservatism that
reflects conditions that include unfavorable events that have a
reasonable probability of occurring during the lifetime of the
contracts. For policies or contracts with significant tail risk,
reflects conditions appropriately adverse to quantify the tail risk.

(ii)
Incorporate assumptions, risk analysis methods, and financial models
and management techniques that are consistent with, but not
necessarily identical to, those utilized within the company's overall
risk assessment process, while recognizing potential differences in
financial reporting structures and any prescribed assumptions or
methods;

(iii)
Provide margins for uncertainty including adverse deviation and
estimation error, such that the greater the uncertainty the larger
the margin and resulting reserve.

(d)
An alternative basis for calculating a reserve

or an admitted asset

approved by the superintendent shall be treated as a public document
after the date the alternative basis for calculating the reserve
or
admitted asset
has
been approved, regardless of the application of the uniform trade
secrets act set forth in sections 1333.61 to 1333.69 of the Revised
Code.

(3)
The special purpose financial captive insurance company shall submit
a request for an alternative reserve basis in writing, and affirmed
by the company's appointed actuary, that includes, at a minimum, the
following information for the superintendent to consider in
evaluating the request:

(a)
The reserves based on the national association of insurance
commissioner's accounting practices and procedures manual and the
reserves based on the proposed alternative method for calculation and
the difference between these two calculations;

(b)
A detailed analysis of the proposed alternative method explaining why
the use of an alternative basis for calculating the reserve is
appropriate;

(c)
All assumptions utilized within the proposed alternative method,
together with the source of the assumptions, as well as information,
satisfactory to the superintendent, supporting the appropriateness of
the assumptions and analysis and identifying the assumptions that
result in the greatest variability in the reserve and how that
analysis was used in setting those assumptions;

(d)
A detailed overview of the corporate governance and oversight of the
actuarial valuation function;

(e)
Any other information the superintendent may require to assess the
proposed alternative method for approval or disapproval.

(4)
At the expense of the special purpose financial captive insurance
company, the superintendent may require the company to secure the
affirmation of an independent qualified actuary in support of any
alternative basis for calculating the reserve that is requested
pursuant to this section or to assist the superintendent in the
review of said request.

(5)
If the superintendent approves the use of an alternative basis for
calculating a reserve, the special purpose financial captive
insurance company, and the ceding insurer shall each include a note
in its financial statements disclosing the use of a basis other than
the national association of insurance commissioner's accounting
practices and procedures manual and the difference between the
reserve amount determined under the alternative basis and the reserve
amount that would have been determined had the company utilized the
national association of insurance commissioner's accounting practices
and procedures manual.

(6)(a)
The superintendent shall establish an acceptable total capital and
surplus requirement for each insurance company that will cede risks
and obligations to a special purpose financial captive insurance
company. The total capital and surplus requirement must be met at the
time the special purpose financial captive insurance company applies
for a license to do the business of captive insurance. The total
capital and surplus requirement shall be determined in accordance
with a minimum required total capital and surplus methodology that
meets both of the following requirements:

(i)
Is consistent with current risk-based capital principles;

(ii)
Takes into account all material risks and obligations, as well as the
assets, of the insurance company.

(b)
An insurance company ceding risks and obligations to a special
purpose financial captive insurance company shall fully disclose all
material risks and obligations, as well as its assets and all
affiliated captive insurance company risks. The ceding insurance
company shall advise the superintendent whenever there is a material
change to such risks, obligations, or assets.

(F)
In determining whether to approve an application for a license, the
superintendent shall consider all of the following:

(1)
The character, reputation, financial standing, and purposes of the
incorporators, or other founders, of the captive insurance company;

(2)
The character, reputation, financial responsibility, experience
relating to insurance, and business qualifications of the officers
and directors of the captive insurance company;

(3)
The amount of liquidity and assets of the captive insurance company
relative to the risks to be assumed;

(4)
The adequacy of the expertise, experience, and character of the
person or persons who will manage the captive insurance company;

(5)
The overall soundness of the plan of operation;

(6)
The adequacy of the loss prevention programs of the persons that the
captive insurance company insures.

(G)(1)
Each captive insurance company that offers direct insurance to its
parent shall submit to the superintendent for approval a detailed
description of the coverages, deductibles, coverage limits, proposed
rates or rating plans, documentation from a qualified actuary that
demonstrates the actuarial soundness of the proposed rates or rating
plans, and other such additional information as the superintendent
may require.

(2)(a)
Any captive insurance company licensed under the provisions of this
chapter that seeks to make any material change to any item described
in division (G)(1) of this section shall submit to the superintendent
for approval a detailed description of the revision, documentation
from a qualified actuary that demonstrates the actuarial soundness of
the revised rates or rating plans, and other such additional
information as the superintendent may require.

(b)
Each filing under division (G)(2)(a) of this section is deemed
approved thirty days after the filing is received by the
superintendent of insurance, unless the filing is disapproved by the
superintendent during that thirty-day period.

(c)
If at any time subsequent to the thirty-day review period the
superintendent finds that a filing does not demonstrate actuarial
soundness, the superintendent shall hold a hearing requiring the
captive insurance company to show cause why an order should not be
made by the superintendent to disapprove the revised rates or rating
plans.

(d)
If, upon such a hearing, the superintendent finds that the captive
insurance company failed to demonstrate the actuarial soundness of
the rates or rating plans, the superintendent shall issue an order
directing the captive insurance company to cease and desist from
using the revised rates or rating plans and to use rates or rating
plans as determined appropriate by the superintendent.

(H)
Except as otherwise provided in this division, documents and
information submitted by a captive insurance company pursuant to this
section are not subject to section 149.43 of the Revised Code, and
are confidential, and may not be disclosed by the superintendent or
any employee of the department of insurance without the written
consent of the company.

(1)
Such documents and information may be discoverable in a civil action
in which the captive insurance company filing the material is a party
upon a finding by a court of competent jurisdiction that the
information sought is relevant and necessary to the case and the
information sought is unavailable from other, nonconfidential
sources.

(2)
The superintendent may, at the superintendent's sole discretion,
share documents required under this section with the chief deputy
rehabilitator, the chief deputy liquidator, other deputy
rehabilitators and liquidators, and any other person employed by, or
acting on behalf of the superintendent pursuant to Chapter 3901. or
3903. of the Revised Code, with other local, state, federal, and
international regulatory and law enforcement agencies, with local,
state, and federal prosecutors, and with the national association of
insurance commissioners and its affiliates and subsidiaries provided
that the recipient agrees to maintain the confidential or privileged
status of the documents and has authority to do so.

(I)(1)
Each applicant for a license to do the business of a captive
insurance company in this state shall pay to the superintendent a
nonrefundable fee of five hundred dollars for processing its
application for a license. The superintendent is authorized to retain
legal, financial, and examination services from outside the
department, at the expense of the applicant. Each captive insurance
company shall annually pay a license renewal fee of five hundred
dollars.

(2)
The fees collected pursuant to division (I)(1) of this section shall
be deposited into the state treasury to the credit of the department
of insurance operating fund.

Sec.
3964.194.
(A)
Notwithstanding any other section of the Revised Code, a counterparty
may take credit for reinsurance ceded to a special purpose financial
captive insurance company that is a subsidiary or affiliate of the
counterparty, if assets valued using the basis of accounting
applicable to the special purpose financial captive insurance company
under division (E) of section 3964.03 of the Revised Code at least
equal to the reserves as determined under the basis elected under
division (E) of section 3964.03 of the Revised Code for the
reinsurance are
,
notwithstanding section 3901.63 of the Revised Code,

held directly by the ceding counterparty or
in
trust on behalf of the ceding counterparty, as security for payment
of
the

special purpose financial captive insurance company for the purpose
of supporting the

obligations under the reinsurance contract

with the reinsuring special purpose financial captive insurance
company
.

(B)
Such funds
shall

may

be
held in compliance with the requirements of section 3901.63 of the
Revised Code.

(C)
An Ohio domiciled counterparty in recording its investment in a
special purpose financial captive insurance company domiciled in this
state, shall value the investment using the special purpose financial
captive insurance company's underlying audited statutory equity
reflecting the reserves established pursuant to division (E) of
section 3964.03 of the Revised Code.

(D)
Notwithstanding any other provision of the Revised Code that would
otherwise apply, any change in surplus that may be recognized by any
Ohio domiciled ceding counterparty pursuant to this chapter may be
recognized in such ceding counterparty's calculation of its
investment in a United States insurance subsidiary, controlled and
affiliated entity investment, or any of its Ohio domiciled parents'
calculations of their investment in a United Stated insurance
subsidiary, controlled, and affiliated entities.

Sec.
4509.70.
(A)
After consultation with the insurance companies authorized to issue
automobile liability or physical damage policies, or both, in this
state, the superintendent of insurance shall approve a reasonable
plan, fair and equitable to the insurers and to their policyholders,
for the apportionment among such companies of applicants for such
policies and for motor-vehicle liability policies who are in good
faith entitled to but are unable to procure such policies through
ordinary methods. When any such plan has been approved by the
superintendent, all such insurance companies shall subscribe and
participate. Any applicant for such policy, any person insured under
such plan of operation, and any insurance company affected, may
appeal to the superintendent of insurance from any ruling or decision
of the manager or committee designated in the plan to operate the
assigned risk insurance plan. Any order or act of the superintendent
under this section is subject to review as provided in sections
119.01 to 119.13 of the Revised Code, at the instance of any party in
interest.

(B)
The plan described in division (A) of this section may permit the
assigned risk insurance plan to directly issue and process claims
arising from such policies described in division (A) of this section
to applicants of automobile insurance policies who are in good faith
entitled to but are unable to procure such policies through ordinary
methods.

(C)
Every form of a policy, endorsement, rider, manual of
classifications, rules, and rates, every rating plan, and every
modification of any of them proposed to be used by the assigned risk
insurance plan shall be filed, or the plan may satisfy its obligation
to make such filings, as described in section 3937.03 of the Revised
Code.

(D)
Any automobile insurance policy issued by the assigned risk insurance
plan under division (B) of this section:

(1)
Shall be recognized as if issued by an insurance company authorized
to do business in this state;

(2)
Shall meet all requirements of proof of financial responsibility as
described in division (K) of section 4509.01 of the Revised Code.

(E)
Proof of financial responsibility provided by the assigned risk
insurance plan to an automobile insurance policyholder that meets the
requirements described in division (G)(1)(a) or (b) of section
4509.101 of the Revised Code shall be recognized as if issued by an
insurance company authorized to do business in this state to
demonstrate proof of financial responsibility under section 4509.101
of the Revised Code.

(F)
The assigned risk insurance plan designated in division (A) of this
section shall do both of the following:

(1)
Make annual audited financial reports available to the superintendent
of insurance promptly upon the completion of such audit;

(2)
Upon reasonable notice, make available to the superintendent of
insurance all books and records relating to the insurance
transactions of the assigned risk insurance plan.

(G)(1)
Except as provided in division (G)(2) of this section, records
created, held by, or pertaining to the assigned risk insurance plan
are not public records under section 149.43 of the Revised Code, are
confidential, and are not subject to inspection or disclosure.

(2)
Division (G)(1) of this section does not apply to the plan of
operation and other information required to be filed under this
section with the superintendent unless otherwise prohibited from
release by law.

(H)(1)
For the purposes of division (H) of this section, "insurance
agent" has the same meaning as in section 3905.01 of the Revised
Code.

(2)
Provided that the assigned risk insurance plan establishes
registration procedures for insurance agents under division (H)(3) of
this section, the plan shall not accept an application for an
automobile insurance policy issued under division (B) of this section
unless that application is submitted through an insurance agent
registered in accordance with those procedures.

(3)
The plan may do all of the following:

(a)
Establish procedures to register insurance agents;

(b)
Establish separate registrations for commercial and personal
insurance agents, or one registration for both;

(c)
Empower the manager of the plan to make determinations on
registration status, including by revoking an insurance agent's
registration.

(4)
If an insurance agent is denied registration with the plan, or the
insurance agent's registration is revoked, the plan may notify the
superintendent of the plan's decision. The plan and manager are
immune from civil liability for any decision to deny or revoke
registration and from any decision to report denials or revocations
to the superintendent.

(5)
All insurance agents submitting applications to the plan for
automobile insurance coverage have an affirmative duty to ensure that
all information included in the application and any supporting
materials is true and accurate.

(6)(a)
An insurance agent shall not submit an application to the plan for
automobile insurance coverage unless the agent exercises due
diligence in confirming that the person seeking insurance is unable
to obtain coverage through an insurer authorized to do business in
this state.

(b)
For the purposes of this section, due diligence requires an insurance
agent to contact at least five of the authorized insurers the agent
represents or, if the agent does not represent five authorized
insurers that customarily write automobile insurance coverage, as
many of such insurers as the agent represents.

(c)
An insurance agent may assume that insurance coverage cannot be
procured for the applicant through ordinary methods after each
insurer contacted under division (H)(6)(b) of this section declines
to provide coverage.

(d)
An insurance agent may assume that an authorized insurer declines to
provide coverage to the applicant seeking insurance upon either of
the following:

(i)
Receiving notice from the insurer declining coverage;

(ii)
Receiving no response from the insurer within ten days after the date
the insurance agent initially makes contact with the insurer.

(e)
The determination of whether an insurance agent has adequately
complied with the due diligence requirements is at the discretion of
the manager of the plan.

(f)
An agent shall not submit an application on behalf of an applicant to
the plan for any automobile insurance policy if any insurer admitted,
authorized, or otherwise eligible to do business in this state has in
any way communicated a willingness to insure the applicant, even if
coverage provided by the plan costs less than other insurers.

(g)
(7)

The manager of the plan may revoke the registration of an insurance
agent who fails to comply with

either

division
(H)(6)
(H)(5)
or (6)

of this section.

(I)(1)
The manager of the plan may, as a condition of granting insurance
under this section, require an applicant to take any action necessary
to accomplish any of following:

(a)
The promotion of vehicle safety, public safety, or increased ability
of the plan to underwrite applicant risk;

(b)
The prevention of fraud against the plan;

(c)
The acquisition of any information the manager of the plan deems
necessary to determine an applicant's current and continued
eligibility for the plan.

(2)(a)
The manager of the plan may request any information necessary to
determine an applicant's eligibility for the plan.

(b)
An applicant has the burden of proof to establish that the applicant
is eligible for insurance under the plan.

(c)
The determination of whether an applicant has adequately demonstrated
eligibility for the plan is at the discretion of the manager of the
plan.

(3)
The plan may employ any form of technology necessary to review
applications for eligibility, determine any conditions required for
the issuance of coverage under this section, or to find and prevent
fraudulent activities.

(4)(a)
Consistent with the principle of the plan being a market of last
resort, the plan may seek to place an applicant with any insurer
admitted or authorized in this state, regardless of whether the agent
submitting the application is appointed with the insurer.

(b)
An agent whose applicant is placed with such an insurer is not
eligible for compensation from that insurer unless the agent is
appointed by the receiving insurer under Ohio law.

(5)(a)
The manager of the plan may refuse to accept applications from any
agent that the manager of the plan suspects has submitted
applications that contain, or that are supported by, inaccurate or
fraudulent information.

(b)
The manager of the plan shall communicate any suspicion of fraudulent
activity to the superintendent of insurance.

(c)
The manager of the plan may resume accepting applications from an
agent once the manager has determined that the fraudulent activity
did not occur or has ceased.

(6)
Knowingly submitting, or submitting with the purpose to defraud,
false, manufactured, manipulated, or inaccurate information to the
plan is insurance fraud and a violation of section 2913.47 of the
Revised Code.

Sec.
4513.70.
(A)(1)
An insurance company may commence a civil action against a towing
service or storage facility on its own behalf, on behalf of the
holder of a policy of automobile insurance, or on behalf of a motor
vehicle owner for either or both of the following reasons:

(a)
The recovery of a motor vehicle that has been towed or stored and for
which a claim has been filed with the insurance company;

(b)
Objecting to the amount billed by the towing service or storage
facility.

(2)
The insurance company shall file the action in the municipal or
county court with territorial jurisdiction over the location from
which the vehicle was towed or stored within
thirty

forty-five

days
of receipt of the bill for services from the towing service or
storage facility. If the insurance company objects to the amount
billed by the towing service or storage facility, the complaint shall
include the amount of the bill that is undisputed and the reasons the
insurance company objects to the remainder of the bill. The insurance
company shall file, along with the complaint, a copy of the bill and
any evidence supporting the assertion that the billed amount is
unreasonable. If the insurance company seeks the recovery of the
vehicle, the insurance company shall pay to the towing service or
storage facility the undisputed amount of the bill.

(3)
A towing service or storage facility shall not add any additional
storage fees or similar fees related to the towing and storage of the
vehicle to the disputed bill after an insurance company retrieves the
vehicle in accordance with this section.

(B)
Upon receipt of payment of the undisputed amount of the bill and not
later than two business days after receiving service of a complaint
filed under division (A) of this section

or a written notice from the insurance company that includes a copy
of the filed complaint
,
the towing service or storage facility shall release the vehicle that
is the subject of the complaint to the owner of the vehicle or to a
representative of the insurance company that filed the complaint.
If

For
purposes of encouraging the quick return of a vehicle to its owner,
if
the
towing service or storage facility fails to release the vehicle as
required under this division, the court may issue an order that
imposes a penalty of up to one hundred dollars per day against a
towing service or storage facility for each day the towing service or
storage facility violates that division. The towing service or
storage facility shall pay any fines assessed under this section to
the clerk of courts.

(C)
The court shall make a determination as to whether the amount charged
by the towing service or storage facility is unreasonable. If the
court determines that the amount is reasonable, the court shall order
the insurance company to pay the amount billed minus the undisputed
amount that the insurance company paid to the towing service or
storage facility under division (B) of this section if a payment was
made under that division. If the court determines that the amount
charged was unreasonable, the court shall determine a reasonable
amount and order the insurance company to pay that amount minus the
undisputed amount that the insurance company paid to the towing
service or storage facility under division (B) of this section if a
payment was made under that division. The court also may require
either party to pay any additional amount and may impose any monetary
penalties the court determines to be appropriate.

(D)
As used in this section:

(1)
"Storage facility" means any place to which a for-hire
motor carrier delivers a towed motor vehicle for storage

or any place that charges fees for storing a motor vehicle regardless
of what person or entity towed or delivered the motor vehicle.
"Storage facility" does not include either of the
following:

(a)
A place owned or operated by a motor vehicle dealer, as defined in
section 4517.01 of the Revised Code;

(b)
A salvage motor vehicle auction or a salvage motor vehicle pool as
defined in section 4738.01 of the Revised Code
.

(2)
"Towing service" means any for-hire motor carrier that tows
motor vehicles.

Sec.
4513.71.
(A)
As used in this section:

(1)
"Towing service" and "storage facility" have the
same meanings as in section 4513.70 of the Revised Code.

(2)
"Motor vehicle owner" means any person that holds a
certificate of title to or is a lessee of a towed commercial motor
vehicle. "Motor vehicle owner" does not include a
lienholder or leasing company.

(B)(1)
A motor vehicle owner may commence a civil action against a towing
service or storage facility for either of the following reasons after
the motor vehicle was removed, towed, or stored pursuant to division
(A)(2) of section 4513.66 of the Revised Code:

(a)
The recovery of the motor vehicle, cargo, or personal property that
was removed, towed, or stored;

(b)
Objecting to the amount billed by the towing service or storage
facility for the removal, towing, or storage.

(2)
The motor vehicle owner may commence the civil action on behalf of
that owner or on behalf of a third party for whom the owner
commercially transports the cargo that is the subject of the civil
action.

(C)
A towing service or storage facility may commence a civil action
against a motor vehicle owner for payment of the amount billed by the
towing service or storage facility in accordance with this section if
all of the following apply:

(1)
The motor vehicle, cargo, or personal property was removed, towed, or
stored pursuant to division (A)(2) of section 4513.66 of the Revised
Code;

(2)
The motor vehicle owner has not paid the amount billed or commenced a
civil action in accordance with division (B) of this section within
forty-five days after the motor vehicle owner received the bill sent
by the towing service or storage facility;

(3)
The towing service or storage facility is not seeking title to the
motor vehicle, if applicable, in accordance with section 4505.104 of
the Revised Code, until judgment is entered in any civil action filed
under this section.

(D)(1)
The motor vehicle owner, towing service, or storage facility may file
the action in the
court
of common pleas,
municipal

court,

or
county court with territorial jurisdiction over the location from
which the motor vehicle, cargo, or personal property was removed,
towed, or stored.

(2)
The motor vehicle owner, towing service, or storage facility, as
applicable, shall send a copy of the filing to any lienholder, if
known, of the subject motor vehicle, cargo, or personal property.

(E)
If the motor vehicle owner objects to the amount billed by the towing
service or storage facility, the motor vehicle owner shall include in
the owner's complaint, answer, or objection to the action, as
applicable, the amount of the bill that is undisputed and the reasons
the owner objects to the remainder of the bill. The motor vehicle
owner shall file a copy of the bill and any evidence supporting the
assertion that the billed amount is unreasonable. The motor vehicle
owner shall pay the undisputed amount to the towing service or
service facility and post a bond equal to the disputed amount of the
bill.

(F)
Not later than two business days after receipt of payment of the
undisputed amount of the bill and service of the motor vehicle
owner's complaint or answer to the civil action, as applicable, the
towing service or storage facility shall release the motor vehicle,
cargo, or personal property that is the subject of the complaint to
the motor vehicle owner.

(G)
When an action filed under this section involves a dispute over the
amount of the bill, the court shall make a determination as to
whether the amount charged by the towing service or facility is
unreasonable. If the court determines that the amount is reasonable,
the court shall order the motor vehicle owner to pay the amount
billed minus the undisputed amount that the owner previously paid to
the towing service or storage facility. If the court determines that
the amount charged was unreasonable, the court shall determine a
reasonable amount and order the motor vehicle owner to pay that
amount minus the undisputed amount that the owner previously paid to
the towing service or storage facility. The court may also require
either party to pay or refund any additional amount and may impose
any monetary penalties that the court determines to be appropriate.

(H)
Any money owed by the motor vehicle owner shall be paid from the bond
posted by the owner. If any amount of the bond remains after payment,
the remainder shall be returned to the motor vehicle owner.

(I)
Nothing in this section creates, implies, or otherwise grants
insurance coverage for the amount billed by the towing service or
storage facility that is not within the owner's motor-vehicle
liability policy, proof of financial responsibility, or other policy
of insurance.

Section
2.
That
existing sections 1345.02, 3901.046, 3905.01, 3906.01, 3906.08,
3907.14, 3925.08, 3964.03, 3964.194, 4509.70, 4513.70
,
and 4513.71

of the Revised Code are hereby repealed.