This section adds a new section to an existing chapter 48.31. Here is the modified chapter for context.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Federal home loan bank" means a federal home loan bank established under the federal home loan bank act, 12 U.S.C. Sec. 1421, et seq.
"Insurer member" means an insurer who is a member of a federal home loan bank.
Notwithstanding any other provision to the contrary, no federal home loan bank shall be stayed, enjoined, or prohibited from exercising its rights regarding collateral pledged by an insurer member.
If a federal home loan bank exercises its rights regarding collateral pledged by an insurer member who is subject to a delinquency proceeding, the federal home loan bank shall repurchase any outstanding capital stock that is in excess of that amount of federal home loan bank stock that the insurer member is required to hold as a minimum investment, to the extent the federal home loan bank in good faith determines the repurchase to be permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan, and consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.
Following the appointment of a receiver for an insurer member, the federal home loan bank shall, within 10 business days after a request from a receiver, provide a process and establish a timeline for the following:
The release of collateral that exceeds the amount required to support secured obligations remaining after the repayment of loans as determined in accordance with the applicable agreements between the federal home loan bank and the insurer member;
The release of any of the insurer member's collateral remaining in the federal home loan bank's possession following repayment of all outstanding secured obligations of the insurer member in full;
The payment of fees owed by the insurer member and the operation of deposits and other accounts of the insurer member with the federal home loan bank; and
The possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer member is required to own.
Upon request from a receiver, the federal home loan bank shall provide any available options for an insurer member subject to a delinquency proceeding to renew or restructure a loan to defer associated prepayment fees, subject to market conditions, the terms of any loans outstanding to the insurer member, the applicable policies of the federal home loan bank, and the federal home loan bank's compliance with federal laws and regulations.
Notwithstanding any other provision of law to the contrary, the receiver for an insurer member shall not void any transfer of, or any obligation to transfer, money or any other property arising under or in connection with any federal home loan bank security agreement, or any pledge, security, collateral, or guarantee agreement, or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement made in the ordinary course of business and in compliance with the applicable federal home loan bank agreement. However, a transfer may be avoided under this subsection if the transfer was made with intent to hinder, delay, or defraud the insurer member, the receiver for the insurer member, or existing or future creditors. This subsection shall not affect a receiver's rights regarding advances to an insurer member in delinquency proceedings under 12 C.F.R. Part 1266.4.
The provisions of RCW 48.31.040, 48.31.050, 48.31.060, and 48.31.200 do not apply to a federal home loan bank exercising its rights regarding collateral pledged by an insurer member.