TRENTON, NJ – A significant legislative move to enhance the competitive edge of New Jersey-based insurance companies was achieved with the passage of a bill authored by Assemblywoman Victoria Flynn. The bill, A4785/S3409, aims to potentially reduce insurance policy costs for New Jersey residents.
The legislation allows for increased foreign investment limits, enabling local insurers to diversify their portfolios more broadly. This change is expected to level the playing field for New Jersey insurance companies, as counterparts in 36 other states have already been granted similar investment opportunities.
Flynn highlighted the drawbacks of limiting foreign investments for insurers, noting that such restrictions contribute to higher insurance costs for policyholders and negatively impact the insurance business’s operational and developmental costs. The bill received bipartisan support, with Flynn (R-Monmouth) collaborating across the aisle with Assemblyman McKeon.
Under the new legislation, insurance companies will be permitted to invest up to 30% of their assets in foreign countries with high ratings from independent, nationally recognized American rating agencies, with a cap of 10% investment in any single country.
Flynn emphasized that allowing insurance companies to fulfill their obligations to policyholders more cost-effectively is beneficial for New Jersey. The most common foreign markets for U.S. insurers include the United Kingdom, Canada, Australia, the Netherlands, and France, with typical investments in debt securities like bonds and equity securities such as stocks and mutual funds.