Impact Community Capital Frequently Asked Questions Page



	Frequently Asked Questions
	What is Impact? Who are Impact's Investor/Members? Why was Impact Created? What Investments has Impact Made? What's unique about Impact?
			Why should Insurance Companies participate? Do Community Investments exist that offer reasonable rates of return? How will Impact directly benefit Communities? How does Impact differ from COIN?
	Q: What is Impact? Impact Community Capital LLC was formed to facilitate and manage insurance company investments in California's low-income communities. The first venture of its kind in the United States, Impact has proved to be a dynamic, effective vehicle on behalf of its insurance company members. Investor/members that own Impact set investment policy and actively participate in investment decisions. Impact's full-time President & CEO, Dan Sheehy, was selected by insurance industry leaders because of his reputation for innovation and success in bridging the gap between investment dollars and neighborhoods that need those dollars. The creation of Impact gives California a significant new community development financing resource. Back to Top Q: Who are Impact's Investor/Members? Impact currently has ten investor/members that together represent approximately one-third of the insurance premium dollars written in California. They are Allstate Insurance Company, Farmers Insurance Companies, Nationwide Mutual Insurance Companies, Pacific Life Insurance Company, SAFECO Insurance, State Farm Insurance Companies, Teachers Insurance and Annuity Association, and 21st Century Insurance Company. Impact is open to qualified new investor/members. Back to Top Q: Why was Impact created? Impact was created as a vehicle for insurance company investor/members to support development of California's diverse communities, especially those that have been historically underserved. Impact believes a voluntary community investment program directed by insurance companies can most effectively identify and implement meaningful community investments that are also safe and sound investment opportunities. In recent years, the California Legislature and legislatures in other states have considered proposals to mandate insurance company investments in underserved communities. Impact believes a voluntary effort, managed responsibly by insurance companies and staffed with experienced, professional and committed leaders, will better serve California's communities. Underserved communities have a far greater potential to rebound when infused with prudently invested capital, rather than forced subsidies. Back to Top Q: What investments has Impact made? Impact Investment Back to Top Q: What's unique about Impact? Impact has pioneered the securitization of community investments. By standardizing and pooling investments for insurers, Impact obtains investment grade ratings for large portions of its investment pools. It securitizes and markets the rated portion of the pools, and retains the unrated portion. Returns on investments are at or slightly above market rates. Impact creates innovative structures leveraging tax credits to enable safe investments in deep-reach community activities, such has childcare. Back to Top Q: Why should insurance companies participate? It's good business. Through the issuance of rated, investment-grade securities, Impact has the capacity and flexibility to finance transactions that are not themselves rateable. Impact also has the professional staff and expertise to act as an investment manager for insurance companies to "outsource" these often complex community investments. This practice is opening new markets and creating opportunities for investment. Impact has become a valuable resource to its Investor/Members. Back to Top Q: Do community investments exist that offer reasonable rates of return? Yes. A report prepared by The Development Fund of San Francisco for Impact's investor/members concluded that the industry could meet a wide array of community capital needs while maintaining reasonable rates of return on their investments. The report identified three market segments that offer the highest potential for collaborative insurance company investment: multi-family affordable housing, small business investments and community- based projects. The report noted that while these investment opportunities exist, they are often structured in a complex and idiosyncratic manner. Impact's President & CEO, Dan Sheehy, is nationally recognized for his ability to find innovative solutions posed by complex private/public insurance company investment transactions. Impact's initial investment in affordable housing has proven that The Development Fund was right. The yield on its initial pool of affordable housing loans is eight percent, a competitive return in today's real-estate-backed investment markets. Back to Top Q: How does Impact directly benefit communities? By purchasing loans and making investments, Impact will free up capital that can then be reinvested in the facilities and programs that provide real benefits to the lives of many Californians, such as affordable housing, health care facilities, child care centers, community centers and investments in vital small enterprises. Impact is providing $475 million of capital through its Community Impact Loan Program (CIL), to finance the creation of new affordable housing units. Back to Top Q: How does Impact differ from COIN? The California Organized Investment Network (COIN) is an organization within the California Department of Insurance that primarily acts as a clearinghouse to inform insurance companies about investment opportunities in low-income communities. Impact is an independent initiative created, owned and funded by insurance companies. Impact has the capital to acquire viable performing investments within targeted communities. Some Impact investments will be offered to investors through COIN. Impact is a certified Community Development Financial Institution (CDFI) pursuant to guidelines established by the California Organized Investment Network (COIN) and all investments meet the requirements of the COIN program. Back to Top