S T A T E   O F   N E W   Y O R K
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                                  10773

                          I N  A S S E M B L Y

                              June 18, 2012
                               ___________

Introduced  by COMMITTEE ON RULES -- (at request of M. of A. Simotas) --
  read once and referred to the Committee on Insurance

AN ACT to amend the insurance law, in relation to  the  foreign  invest-
  ments of insurance companies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 7 of subsection (a) of section 1405 of the insur-
ance law, subparagraph (C) as amended by chapter 60 of the laws of  2008
and  subparagraph  (D) as amended by chapter 162 of the laws of 1999, is
amended to read as follows:
  (7) Foreign investments. (A) Canadian investments substantially of the
same types as those eligible for investment under paragraphs one through
six of this subsection,  provided  that,  after  giving  effect  to  any
investment made under this subparagraph, the aggregate amount of invest-
ments  made  under this subparagraph and then held by such insurer shall
not exceed ten percent of the insurer's admitted assets, except where  a
greater  amount is permitted under subparagraph (B) below (in which case
the provisions of this subparagraph shall not be applicable).
  (B) In the case of any domestic insurer that is authorized to do busi-
ness in a foreign country or possession of the United States of  America
or  that  has outstanding insurance, annuity or reinsurance contracts on
lives  or  risks  resident  or  located  in  such  foreign  country   or
possession,  investments  in such foreign country or possession that are
substantially of the same types as those eligible for  investment  under
paragraphs  one  through  six  of this subsection; provided that, except
where a greater amount is permitted under subparagraph (A) above,  after
giving  effect  to  any investment in such foreign country or possession
made under this subparagraph,  the  aggregate  amount  of  cash  in  the
currency  of  such  foreign  country or possession and of investments in
such foreign country or possession made under this subparagraph and then
held by such insurer shall not exceed one and one-half times the  amount
of such insurer's reserves and other obligations under such contracts or
the amount which such insurer is required by law to invest in such coun-
try or possession, whichever shall be greater.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD16241-01-2

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  (C)  Investments in foreign countries, in addition to Canadian invest-
ments and investments permitted by subparagraph (B) of  this  paragraph,
that  are  substantially of the same types as those eligible for invest-
ment under paragraphs one through six of this subsection, provided that,
after  giving effect to any investment made under this subparagraph, the
aggregate amount of investments qualified under  this  subparagraph  and
then  held  by such insurer shall not exceed [sixteen] TWENTY percent of
the insurer's admitted assets; and
  (i) the issuer or obligor is (I) a jurisdiction, which is rated in one
of the four highest rating  categories  by  an  independent,  nationally
recognized  United  States rating agency, (II) any political subdivision
or other governmental unit of any such jurisdiction, or  any  agency  or
instrumentality of any such jurisdiction, political subdivision or other
governmental  unit  or (III) an institution which is organized under the
laws of any such jurisdiction or, in the case of such  paragraphs  three
and  four  of  this subsection, the real property is located in any such
jurisdiction; and
  (ii) [if the investment is denominated  in  any  currency  other  than
United  States  dollars,  the investment is effectively hedged, substan-
tially in its entirety, against the United States dollar:
  (I) for an insurer that has an  approved  derivative  use  plan  under
section  one  thousand  four  hundred  ten  of this article, pursuant to
contracts or agreements entered into under and in accordance  with  that
derivative  use  plan  and  subject  to the counterparty exposure limits
thereunder; or
  (II) for any other insurer, pursuant to contracts or agreements  which
are: (aa) issued by or traded on a securities exchange or board of trade
regulated  under  the  laws of the United States or Canada or a province
thereof or (bb) entered into with: (aaa) a United States banking  insti-
tution  which has assets in excess of five billion dollars and which has
obligations outstanding, or has a parent  corporation  which  has  obli-
gations  outstanding,  which  are rated in one of the two highest rating
categories by  an  independent,  nationally  recognized,  United  States
rating  agency; (bbb) a broker-dealer registered with the Securities and
Exchange Commission which has net capital in excess of two hundred fifty
million dollars; or
  (ccc) any other banking institution which has assets in excess of five
billion dollars and which has obligations outstanding, or has  a  parent
corporation which has obligations outstanding, which are rated in one of
the  two  highest rating categories by an independent, nationally recog-
nized, United States rating agency and which is organized under the laws
of a jurisdiction which is rated in one of the two highest rating  cate-
gories  by  an  independent, nationally recognized, United States rating
agency; and
  (iii) provided that] an insurer shall not make any investment  in  any
foreign  country  pursuant  to  this  subparagraph,  if such investment,
together with all other investments in the same foreign country so  made
and  then  held by such insurer, would exceed [six] SEVEN percent of the
insurer's admitted assets.
  (D) In addition to the foreign investments permitted under the preced-
ing subparagraphs  of  this  paragraph,  foreign  investments  that  are
substantially  of  the same types as those eligible for investment under
paragraphs one through six of  this  subsection,  provided  that,  after
giving effect to any investment made under this subparagraph, the aggre-
gate amount of investments made under this subparagraph and then held by
such insurer shall not exceed [four] SIX percent of the insurer's admit-

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ted  assets,  and  provided  further  that an insurer shall not make any
investment in any foreign country pursuant to this subparagraph, if such
investment, together with all other  investments  in  the  same  foreign
country  so  made and then held by such insurer, would exceed [two] FOUR
percent of the insurer's admitted assets.
  (E) ANY INVESTMENT MAY BE DENOMINATED IN A CURRENCY OTHER THAN  UNITED
STATES  DOLLARS,  PROVIDED THAT THE AGGREGATE AMOUNT OF ALL SUCH INVEST-
MENTS (OTHER THAN INVESTMENTS MADE PURSUANT TO SUBPARAGRAPH (A) OF  THIS
PARAGRAPH)  THAT  ARE  NOT  EFFECTIVELY  HEDGED,  SUBSTANTIALLY IN THEIR
ENTIRETY, AGAINST THE UNITED STATES DOLLAR, REDUCED, ON  A  CURRENCY  BY
CURRENCY  BASIS, BY THE AMOUNT OF FOREIGN-CURRENCY DENOMINATED INSURANCE
LIABILITIES MAY NOT EXCEED SIX PERCENT OF THE INSURER'S ADMITTED ASSETS.
AN INVESTMENT SHALL BE DEEMED TO BE EFFECTIVELY HEDGED, SUBSTANTIALLY IN
ITS ENTIRETY, IF IT HAS BEEN HEDGED:
  (I) FOR AN INSURER THAT HAS AN  APPROVED  DERIVATIVE  USE  PLAN  UNDER
SECTION  ONE  THOUSAND  FOUR  HUNDRED  TEN  OF THIS ARTICLE, PURSUANT TO
CONTRACTS OR AGREEMENTS ENTERED INTO UNDER AND IN ACCORDANCE  WITH  THAT
DERIVATIVE  USE  PLAN  AND  SUBJECT  TO THE COUNTERPARTY EXPOSURE LIMITS
THEREUNDER; OR
  (II) FOR ANY  OTHER  INSURER,  PURSUANT  TO  CONTRACTS  OR  AGREEMENTS
(DERIVATIVE  TRANSACTIONS)  WHICH  ARE: (AA) CLEARED THROUGH A QUALIFIED
CLEARINGHOUSE OR TRADED ON OR THROUGH  A  QUALIFIED  EXCHANGE  PROVIDING
CLEARING  SERVICES  OR (BB) ENTERED INTO WITH A "QUALIFIED COUNTERPARTY"
AS THAT TERM IS DEFINED PURSUANT TO PARAGRAPH (F) OF SECTION  ONE  THOU-
SAND FOUR HUNDRED TEN OF THIS ARTICLE.
  S 2. This act shall take effect immediately.