2012 New York Consolidated Laws
ISC - Insurance
Article 14 - (1401 - 1414) INVESTMENTS
1411 - Authorization of, and restrictions on, investments.

 
    §  1411.  Authorization  of,  and restrictions on, investments. (a) No
  domestic insurer shall make any loan or investment, except  as  provided
  in  subsection (h) hereof, unless authorized or approved by its board of
  directors or a committee thereof responsible for supervising  or  making
  such investment or loan. The committee's minutes shall be recorded and a
  report submitted to the board of directors at its next meeting.
    (b)  No  such  insurer  shall  participate  in any underwriting of the
  purchase or sale of securities in advance of their issuance.   Any  such
  insurer  may  enter into any agreement to sell or withhold from sale any
  of its property as long as  the  insurer  is  not  participating  in  an
  underwriting.   The   disposition   of   its   property   shall  be  the
  responsibility of its board of directors, in accordance with its charter
  and by-laws.
    (c) Except as otherwise specifically  provided  in  this  chapter,  no
  domestic  insurer  shall pledge or transfer any securities as collateral
  for a loan (including a sale of securities subject to  an  unconditional
  obligation   to  repurchase  the  same)  if  such  loan  and  all  other
  outstanding loans secured by pledge or deposit of  its  securities  will
  exceed,  when  the  loan is made, five percent of its admitted assets as
  shown by its last sworn statement  to  the  superintendent,  unless  the
  superintendent  shall  first  give  his  permission  for  such  loan  as
  necessary in the conduct of  the  insurer's  business.    No  pledge  or
  transfer  of securities for a loan shall be made if the insurer does not
  receive the loan's proceeds.  Nothing in this section shall be construed
  as prohibiting an insurer from selling or purchasing individually or  on
  its  account jointly with one or more of its subsidiaries the securities
  of  any  investment  company  to  which  the  insurer  or  any  of   its
  subsidiaries  renders management, investment advisory or sales services,
  nor from participating in such  sales  or  purchases  jointly  with  any
  person  in  the  insurer's holding company system, as defined in section
  one thousand five hundred one of this chapter.
    (d) No domestic stock insurer shall purchase its  own  capital  shares
  except  pursuant  to  section  seven  thousand three hundred two of this
  chapter or pursuant  to  a  plan  of  stock  redemption  and  retirement
  approved  by the superintendent as reasonable and equitable. No domestic
  insurer shall enter into any agreement in connection with  the  sale  of
  any  property  to  repurchase  such property or any part thereof, except
  that such an insurer may (subject to the provisions of subsection (b) of
  this section) sell securities subject to an unconditional obligation  to
  repurchase  the  same  on a date not more than one year from the date of
  sale. This subsection shall  not  apply  to  the  purchase  or  sale  of
  directors' qualifying shares.
    (e)  No director or officer of an insurer doing business in this state
  shall receive, in addition to his  fixed  salary  or  compensation,  any
  money  or  valuable  thing,  directly  or  indirectly,  or  through  any
  substantial interest in any other  corporation  or  business  unit,  for
  negotiating,  procuring,  recommending or aiding in any purchase or sale
  of property,  or  loan,  made  by  such  insurer  or  any  affiliate  or
  subsidiary   thereof;   nor  shall  he  be  pecuniarily  interested,  as
  principal, co-principal, agent or beneficiary, directly  or  indirectly,
  or through any substantial interest in any other corporation or business
  unit,  in  any  such  purchase,  sale or loan. This subsection shall not
  prohibit:
    (1) a member of the board of directors of an insurer, other than life,
  from receiving his share of the usual commission  earnings  of  a  stock
  exchange firm of which he is a partner;
    (2)  an  insurer,  other  than  life, or any life insurer all of whose
  shares (except directors' qualifying shares) is owned by any corporation

  organized primarily for, and  engaged  primarily  in  the  business  of,
  providing  support,  relief,  pensions,  annuities  or insurance for the
  priests, clergy or ministers of  any  religious  denomination  or  their
  dependents,  from  paying  any  corporation  or partnership in which any
  director of the insurer has an interest or is an officer or director  or
  partner,   a   reasonable  fee  for  investment  advice,  provided  such
  compensation is not in excess of the amounts customarily charged for the
  same type of service; or
    (3) any transaction or class of transactions which comply with section
  one thousand five hundred five or article sixteen of this chapter.
    (f) (1) No insurer doing business  in  this  state  shall,  except  as
  provided in subsection (h) hereof, make any loan to any of its directors
  or  officers,  directly  or indirectly, or through its subsidiaries; nor
  shall any such director or officer accept  any  such  loan  directly  or
  indirectly.
    (2)  No such insurer shall make any advance to any of its directors or
  officers for future services to be performed beyond a period of one year
  from the date of making such advance.
    (g) No insurer doing business in this  state,  nor  any  affiliate  or
  subsidiary thereof, shall directly or indirectly guarantee the financial
  obligation  of  any  director  or  officer of such insurer, affiliate or
  subsidiary, and any such guaranty shall be  void.  In  this  subsection,
  "guarantee"  shall  not include the making of a contract of insurance of
  the kind specified in paragraphs thirteen, fourteen, fifteen or  sixteen
  of  subsection  (a) of section one thousand one hundred thirteen of this
  chapter.
    (h) Nothing contained in this chapter shall prohibit a life  insurance
  company  from  making  a  policy  loan upon its policy or contract in an
  amount not exceeding the net reserve value of the policy or contract, or
  any insurer from:
    (1) Acquiring (i) in the case of an insurer making  investments  under
  the authority of section one thousand four hundred four of this article,
  such real property serving as the residence of a non-director officer as
  may be acquired under the provisions of paragraph five of subsection (a)
  of  section  one  thousand four hundred four of this article, or (ii) in
  the case of an insurer making investments under the authority of section
  one thousand four hundred five of this article, real property serving as
  the residence  of  a  non-director  officer,  under  the  provisions  of
  paragraph  four  of  subsection (a) of section one thousand four hundred
  five of this article and with the approval of the superintendent in  the
  case  of  domestic  insurers,  in  connection with the relocation by the
  insurer of the place  of  employment  of  such  officer  (including  any
  relocation  in  connection with initial employment), at a purchase price
  not exceeding the lesser of the value of such property as determined  by
  an  independent  appraiser  for  the  purpose of such acquisition or one
  hundred  fifty  thousand  dollars,  provided  such  officer   has   made
  reasonable efforts otherwise to dispose of such property for a period of
  not less than one month immediately prior to such acquisition; or
    (2)  Making  a loan to a non-director officer secured by real property
  owned by such officer and improved with a one-family dwelling, which  is
  to  serve  as  such  officer's  residence,  provided  that (i) such loan
  qualifies under paragraph four of subsection (a) of section one thousand
  four hundred four (in the case of  an  insurer  that  makes  investments
  under  the  authority  of  section  one  thousand  four hundred four) or
  paragraph three of subsection (a) of section one thousand  four  hundred
  five  (in  the  case  of  an  insurer  that  makes investments under the
  authority of section one thousand four hundred five)  of  this  article,
  (ii)  such loan is made in connection with the relocation by the insurer

  of the place of employment of such officer (including any relocation  in
  connection with initial employment), and (iii) in the case of a domestic
  insurer, such loan is approved by the superintendent.
    For  the  purposes  of  paragraphs  one  and  two  of this subsection,
  paragraphs four and five of subsection (a) of section one thousand  four
  hundred  four and paragraphs three and four of subsection (a) of section
  one thousand four hundred five of  this  article,  real  property  shall
  include  a  condominium  unit  and  stock  of  a  cooperative  apartment
  corporation, if such stock entitles the holder thereof to a  proprietary
  lease of a one-family apartment serving as the residence of the officer.