NY Work Comp L § 87 (2021)
2021 New York Laws WKC - Workers' Compensation Article 6 - State Insurance Fund. 87 - Investment of Surplus or Reserve.

§  87.  Investment  of surplus or reserve. 1. Any of the reserve funds belonging to the state insurance fund, by order  of  the  commissioners, approved by the superintendent of financial services, may be invested in the types of securities described in subdivisions one, two, three, four, five,  six,  eleven,  twelve,  twelve-a,  thirteen,  fourteen,  fifteen, nineteen, twenty, twenty-one, twenty-one-a, twenty-four,  twenty-four-a, twenty-four-b,  twenty-four-c  and  twenty-five  of  section two hundred thirty-five of the banking law or in paragraph two of subsection (a)  of section  one thousand four hundred four of the insurance law except that up to five percent  of  such  reserve  funds  may  be  invested  in  the securities  of  any  solvent  American  institution as described in such paragraph irrespective of the rating of such  institution's  obligations or other similar qualitative standards described therein.   2.  Any of the surplus funds belonging to the state insurance fund, by order of the commissioners, approved by the superintendent of  financial services,  may  be  invested  in  the  types  of securities described in subdivisions one, two, three, four, five, six, eleven, twelve, twelve-a, thirteen, fourteen, fifteen, nineteen, twenty, twenty-one, twenty-one-a, twenty-four, twenty-four-a, twenty-four-b, twenty-four-c and twenty-five of section two hundred thirty-five of the banking law or,  up  to  fifty percent  of  surplus  funds,  in  the types of securities or investments described in paragraphs two, three, eight and ten of subsection  (a)  of section one thousand four hundred four of the insurance law, except that up  to ten percent of surplus funds may be invested in the securities of any  solvent  American  institution  as  described  in  such  paragraphs irrespective  of  the  rating of such institution's obligations or other similar qualitative standards  described  therein,  and  up  to  fifteen percent  of  surplus  funds  in  securities  or investments which do not otherwise qualify for investment under this section  as  shall  be  made with  the  care,  prudence  and  diligence  under the circumstances then prevailing that a prudent person acting in a like capacity and  familiar with  such  matters  would use in the conduct of an enterprise of a like character and with like aims as provided for the  state  insurance  fund under  this  article,  but  shall  not  include  any  direct  derivative instrument  or  derivative  transaction  except  for  hedging  purposes. Notwithstanding  any  other provision in this subdivision, the aggregate amount that the  state  insurance  fund  may  invest  in  the  types  of securities  or  investments described in paragraphs three, eight and ten of subsection (a) of section one  thousand  four  hundred  four  of  the insurance  law  and  as a prudent person acting in a like capacity would invest as provided in this subdivision shall not exceed fifty percent of such surplus funds.   3. Any of  the  surplus  or  reserve  funds  belonging  to  the  state insurance  fund,  upon  like approval of the superintendent of financial services, may be loaned on  the  pledge  of  any  such  securities.  The commissioners,  upon  like  approval  of the superintendent of financial services, may also sell any of such securities or investments.   4. (a) Any securities belonging to the state insurance  fund  may,  by order  of the commissioners, approved by the superintendent of financial services, be loaned under a  security  loan  agreement,  as  defined  in paragraph  (b)  of  this  subdivision,  entered  into  with a registered broker-dealer, or a New York state or national bank  or  trust  company, with the custodial bank of the state insurance fund or another person or entity,  approved  by  the  commissioner  of taxation and finance, which specializes in  security  loan  transactions  acting  as  the  agent  in arranging  such  agreement.  The  commissioners shall monitor the market value  of  the  loaned  securities  daily.  In  no   event   shall   the  commissioners allow the value of the collateral posted to fall below the market value of the loaned securities.  (b) For purposes of this section, "security loan agreement" shall mean a  written  contract,  the  terms  of  which  have  been approved by the commissioner of taxation and finance, whereby the state  insurance  fund (the lender) agrees to lend securities to a broker-dealer, bank or trust company  described  in  paragraph (a) of this subdivision (the borrower) for a period not to exceed one year. However, such  agreement  shall  be subject  to  the  following  limitations: (i) the lender must retain the right to collect from the borrower all  dividends,  interest,  premiums, rights,  and any other distributions to which the lender would otherwise have been entitled; (ii) the lender may waive  the  right  to  vote  the securities  during  the  term  of  such agreement; (iii) the lender must retain the right to terminate such agreement upon  not  more  than  five business  days' notice; (iv) the borrower shall provide as collateral to the lender cash or direct obligations of the United States of America or any agency or instrumentality thereof or obligations fully guaranteed by the United States of America that are eligible  for  investment  by  the state  insurance  fund  under  subdivision one of this section, provided that such obligations may in no event consist of derivative  securities; and   (v)  such  agreement  shall  provide  for  payment  of  additional collateral on a daily basis, or at such time as the value of the  loaned securities increases to agreed upon ratios.   5. All such securities or evidences of indebtedness shall be placed in the  hands  of the commissioner of taxation and finance who shall be the custodian thereof. He or she shall collect the  principal  and  interest thereof,  when  due, and pay the same into the state insurance fund. The commissioner of taxation and finance shall pay all vouchers drawn on the state insurance fund for the making of such investments when  signed  by the  chair  of  the  commissioners,  the  executive director or a deputy executive director of the state insurance fund  upon  delivery  of  such securities  or  evidences  of  indebtedness to him or her, when there is attached to such vouchers the approval of the  state  superintendent  of financial services.   6.  For  the  purposes  of  this section, the term "reserves" does not include the estimated value of future discretionary payments that may be made by the state insurance fund under section ninety of this article.   7. Notwithstanding any provision in  this  section,  the  surplus  and reserve  funds  of the state insurance fund shall not be invested in any investment that has  been  found  by  the  superintendent  of  financial services  to be against public policy or in any investment prohibited by the provisions of  paragraph  six  of  subsection  (a)  of  section  one thousand  four hundred four of the insurance law or by the provisions of paragraph one, two, three, four, six, eight, nine or ten  of  subsection (a) of section one thousand four hundred seven of the insurance law.