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

                                 2130--A

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by M. of A. SIMOTAS, COOK, TITONE, ESPINAL -- Multi-Sponsored
  by  --  M.  of  A. BRAUNSTEIN, HEVESI -- read once and referred to the
  Committee on Insurance -- committee discharged, bill amended,  ordered
  reprinted as amended and recommitted to said committee

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

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

                                                           LBD02686-03-3

A. 2130--A                          2

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.
  (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.

A. 2130--A                          3

  (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-
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] THREE
percent of the insurer's admitted assets.
  S 2. Section 1405 of the insurance law is  amended  by  adding  a  new
subsection (f) to read as follows:
  (F)  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 SUBPARAGRAPHS (A) AND (B)
OF  PARAGRAPH  SEVEN  OF  SUBSECTION  (A)  OF THIS SECTION) 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
FOUR  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:
  (1)  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
  (2) FOR ANY OTHER INSURER, PURSUANT TO CONTRACTS OR AGREEMENTS (DERIV-
ATIVE  TRANSACTIONS)  WHICH ARE CLEARED THROUGH A "DERIVATIVES CLEARING-
HOUSE" OR ENTERED INTO WITH A "QUALIFIED COUNTERPARTY", AS  THOSE  TERMS
ARE  DEFINED  PURSUANT  TO  SUBSECTION  (F) OF SECTION ONE THOUSAND FOUR
HUNDRED TEN OF THIS ARTICLE.
  S 3. Paragraph 2 of subsection (c) of section 1410  of  the  insurance
law,  as added by chapter 650 of the laws of 1998, is amended to read as
follows:
  (2) Transactions entered into to effectively hedge the  currency  risk
of  investments  denominated  in  a  currency  other  than United States
dollars, pursuant to [subparagraph (C) of paragraph seven of  subsection
(a)]  SUBSECTION  (F)  of section one thousand four hundred five of this
article, shall not be included in the limits under paragraph one of this
subsection.
  S 4. This act shall take effect immediately.