NY Ins L § 1407 (2021)
2021 New York Laws ISC - Insurance Article 14 - Investments 1407 - Non-Reserve and Prohibited Investments for Property/casualty and Certain Other Insurers.

§  1407.  Non-reserve and prohibited investments for property/casualty and certain other insurers. (a) Any insurer that makes investments under the authority of subsection (c) of section  one  thousand  four  hundred three  of this article and meets the requirements of such subsection (c) and section one thousand four hundred two of this article may invest in, or otherwise acquire or loan upon, directly or indirectly,  any  of  the types of investments described in section one thousand four hundred four of  this  article, but without having to meet the applicable qualitative standards or quantitative limitations which are set forth in  subsection (a)  of  section  one thousand four hundred four of this article, except the following prohibited investments:  (1) Obligations, shares or other securities of any  institution  which is insolvent at the time of the investment.  (2)  Obligations secured by real property or real property or interest therein, which are  either  not  eligible  under  or  which  exceed  the investment limitations under paragraph four or five of subsection (a) of section one thousand four hundred four of this article.  (3)  Shares  of  stock  of the investing insurer, except to the extent permitted by the provisions of subsection (d) of  section  one  thousand four hundred eleven of this article.  (4) Obligations, shares or other securities (including certificates of deposit)  issued  by  a  parent corporation or a corporation which is an affiliate or will be an affiliate after direct or  indirect  acquisition by the insurer. Nothing in this paragraph shall be deemed to prevent any investment in obligations, shares or other securities of:  (A) another insurance corporation within the limitations prescribed in section one thousand four hundred eight of this article,  (B)  a  subsidiary organized to engage exclusively in the acquisition, ownership  or  management  of  investments  of  the  type  described  in paragraphs  one,  two, three, six, seven, eight or ten of subsection (a) of section one thousand four hundred four of this article, provided such subsidiary is wholly-owned by two or more insurance companies  domiciled in the United States who are members of the same holding company system, as such term is defined in article fifteen of this chapter. Furthermore, each  individual  insurer's  share  of  the  net investment made by such subsidiary shall be:  (i) computed in proportion to its equity interests in such subsidiary, and  (ii) included when computing any applicable investment limitations, or  (C) subsidiaries subject to and within the limitations  prescribed  in article sixteen of this chapter.  (5)  Investments  made  under  the  leeway  provision, as set forth in subsection (b) of  section  one  thousand  four  hundred  four  of  this article,  if  the  aggregate  amount  of  such investments exceed twelve percent of the insurer's invested assets as shown by its last  statement on  file  with  the  superintendent;  or  if  the  aggregate  amount  of investments that are neither interest-bearing nor  income-paying  exceed three  percent  of  the  insurer's  invested assets as shown by its last statement on file with the superintendent.  (6) Obligations, shares or other securities issued by  a  corporation, if  a  majority  of  the  shares  having  voting  powers of such issuing corporation is owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer.  (7)  Foreign  investments,  meaning  obligations,  shares   or   other securities  of  any  person  or governmental or business unit of or in a foreign country or of any person or business unit of or in a  possession of  the  United  States,  except  such as conform substantially with the limitations imposed by this section upon like domestic investments;  but  the  aggregate  amount  of  foreign investments including obligations of American institutions payable outside of  the  United  States  and  cash deposited in a bank, trust company or thrift institution located outside of  the  United  States  held  at  any  time  by such insurer under this paragraph and under paragraph six  of  subsection  (a)  of  section  one thousand four hundred four of this article shall not exceed the greatest of  (i)  twelve percent of the insurer's admitted assets as shown by its last statement on file with the superintendent, (ii) fifteen percent  of the  insurer's  invested  assets  as shown by its last statement on file with the superintendent, or (iii) one and one-half times the  amount  of its  reserves  and other obligations under its insurance and reinsurance contracts on risks resident or located in  such  foreign  countries  and subdivisions  thereof.  An investment in the shares of an alien insurer, which results in the control of such insurer by the  investing  insurer, shall  not  be  included  when  calculating  the  limitations under this paragraph,  but  such  an  investment  shall  only  be  subject  to  the limitations of section one thousand four hundred eight of this article.  (8) A direct or indirect ownership interest in a risk retention group, as  defined  in article fifty-nine of this chapter, other than in a risk retention group all of whose members are insurance companies,  in  which case  any  investment in such a risk retention group shall be subject to the limitations prescribed in section one thousand four hundred eight of this article.  (9) Acquiring any interest in an  investment  through  a  partnership, other  than  an  interest  acquired  as  a  limited partner in a limited partnership.  (10) Any investment found by the superintendent to be  against  public policy or designed to evade any prohibition of this chapter.  (b)  This  section  shall not prohibit any such insurer from accepting securities, otherwise ineligible, which may be distributed  pursuant  to any   judicial   or   lawful  non-judicial  plan  of  reorganization  or dissolution.  (c) Any investment pursuant to the provisions of this section shall be subject to other requirements  of  law  (statutory  or  otherwise)  that affect  the  standard of care of directors and officers of corporations, and in making investments under this section the insurer's directors and officers shall perform their duties in good faith and with  that  degree of  care  that an ordinarily prudent individual in a like position would use under similar circumstances.