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House narrowly approves bill preserving TIAA CREF exemption and expanding its market in Utah
Summary
After extended debate and an unsuccessful motion to remove key sections, the Utah House passed HB 148 to preserve an exemption for nonprofit insurers tied to TIAA CREF and to broaden the entities it may serve; opponents pressed for more study and the state insurance commissioner urged airing the issue further.
The Utah House of Representatives passed House Bill 148 on second reading after extended floor debate, approving a measure that preserves an exemption in the Utah insurance code historically applied to the College Retirement Equities Fund (CREF) and expands the scope of entities that may be served under that exemption.
Representative Afton Bradshaw, sponsor of HB 148, told the House the amendment being offered at the microphone simply inserts the words "educational or" to preserve the statutory exemption for what she described as a specialized, nonprofit educational insurer and to clarify that the exemption applies to educational or entity insurers. "CREF is registered with the US Securities and Exchange Commission as an open end diversified management investment company," Bradshaw said, adding that "CREF is not organized as an insurance company" and that the bill "does not expand the scope of the exemption" beyond preserving it for certain nonprofit educational entities.
Opponents and questioning members pressed for narrower scope or study. Representative Farren (on the floor) said the measure deserved greater scrutiny and moved to delete large sections of the bill, arguing the proposal would let CREF "expand their market scope to include all government entities as well as all nonprofit organizations, and yet maintain the exemption they enjoy," calling that a policy decision that could give special privileges not afforded to other competitors.
Several members disclosed personal or family ties to TIAA CREF accounts. Representative Goodfellow, who declared a conflict of interest, urged colleagues to oppose the amendment and preserve the bill, arguing CREF "provides for the retirement of college professors" who move between jobs and that the company serves a national market of higher-education employees. Representative Tyler likewise said the measure would not affect existing retirement accounts.
The House also recorded that the State Insurance Commissioner had cautioned the bill "deserves much greater scrutiny and very careful consideration," though Bradshaw said the commissioner had not opposed the bill and only urged discussion. Representative Cheryl Allen noted she had confirmed the assistant commissioner’s confirmation that the commissioner was not formally opposed.
The motion to amend (to delete lines and effectively gut the bill) failed, and on final tally HB 148 passed the House 42 yes to 31 no and was referred to the Senate for further consideration.
What happens next: The bill will be sent to the Utah Senate where it may be debated further, examined in committee, or amended. Supporters said HB 148 will preserve an existing statutory treatment for a distinctive retirement/annuity provider; critics said the expansion of the exemption to a broader market warrants additional review before giving the entity a competitive advantage over regulated insurers.
