Specifically, federal home loan banks may not be stayed or prohibited from exercising its rights regarding collateral pledged by an insurer-member. Furthermore, any federal home loan bank which does assert its rights in such circumstances is required to repurchase any outstanding stock that exceeds the amount of bank stock the insurer-member is required to hold as a minimum investment, provided that the bank determines in good faith that such repurchase is permissible under current law.

The act also requires federal home loan banks to establish a time line to govern the handling of collateral within ten days after a receiver’s appointment. The time line shall establish the release of certain collateral, redemption or repurchase of federal home loan bank stock and payment of fees owed by insurers regarding federal home loan bank accounts.

The act specifies that a receiver cannot void transfers or obligations to transfer any property associated with any federal home loan bank security agreement. However, the act provides an exception for when any transfer is made with intent to hinder, delay or defraud the insurer, the receiver or creditors.

This act is identical to provisions in HCS/SB 932 (2016).

SCOTT SVAGERA