Senate Bill S4282

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4282
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 3, 2021
                                ___________
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance  law,  in  relation  to  certain  voidable
   transfers affecting a federal home loan bank
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 7425 of the insurance law is amended  by  adding  a
 new subsection (e) to read as follows:
   (E)  (1)  NOTWITHSTANDING  SUBSECTION (A) OF THIS SECTION OR ANY OTHER
 PROVISION OF THIS ARTICLE TO THE CONTRARY, (I) A RECEIVER SHALL NOT VOID
 A TRANSFER OF MONEY OR OTHER PROPERTY ARISING  UNDER  OR  IN  CONNECTION
 WITH A FEDERAL HOME LOAN BANK SECURITY AGREEMENT THAT IS MADE BEFORE THE
 COMMENCEMENT  OF  A FORMAL PROCEEDING UNDER THIS ARTICLE IN THE ORDINARY
 COURSE OF BUSINESS AND IN COMPLIANCE WITH THE SECURITY AGREEMENT  UNLESS
 SUCH  TRANSFER  WAS  MADE WITH ACTUAL INTENT TO HINDER, DELAY OR DEFRAUD
 THE INSURER-MEMBER, A  RECEIVER  APPOINTED  FOR  THE  INSURER-MEMBER  OR
 EXISTING  OR  FUTURE  CREDITORS;  AND  (II)  A RECEIVER SHALL NOT VOID A
 REDEMPTION OR REPURCHASE OF ANY STOCK OR  EQUITY  SECURITIES  WHICH  WAS
 MADE  BY  THE  FEDERAL  HOME  LOAN  BANK  WITHIN FOUR MONTHS OF A FORMAL
 COMMENCEMENT OF THE DELINQUENCY  PROCEEDINGS  OR  WHICH  RECEIVED  PRIOR
 APPROVAL OF THE RECEIVER.
   (2)  FOLLOWING THE APPOINTMENT OF A RECEIVER FOR AN INSURER-MEMBER AND
 UPON REQUEST OF THE RECEIVER, THE FEDERAL HOME LOAN BANK  SHALL,  WITHIN
 TEN DAYS OF SUCH REQUEST, PROVIDE A PROCESS AND ESTABLISH TIMING FOR ALL
 OF THE FOLLOWING:
   (I)  THE  RELEASE  OF  COLLATERAL  THAT  EXCEEDS THE LENDING VALUE, AS
 DETERMINED IN ACCORDANCE WITH THE FEDERAL HOME LOAN BANK SECURITY AGREE-
 MENT, REQUIRED TO SUPPORT SECURED OBLIGATIONS REMAINING AFTER ANY REPAY-
 MENT OF ADVANCES;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06970-01-1

              

 S. 4282                             2
 
   (II) THE RELEASE OF ANY COLLATERAL REMAINING IN THE FEDERAL HOME  LOAN
 BANK'S POSSESSION FOLLOWING REPAYMENT IN FULL OF ALL OUTSTANDING SECURED
 OBLIGATIONS;
   (III)  THE  PAYMENT  OF  FEES  AND THE OPERATION OF DEPOSITS AND OTHER
 ACCOUNTS WITH THE FEDERAL HOME LOAN BANK; AND
   (IV) THE POSSIBLE REDEMPTION OR REPURCHASE OF FEDERAL HOME  LOAN  BANK
 STOCK OR EXCESS STOCK OF ANY CLASS THAT AN INSURER-MEMBER IS REQUIRED TO
 OWN.
   (3) UPON THE REQUEST OF THE RECEIVER FOR AN INSURER-MEMBER, THE FEDER-
 AL  HOME LOAN BANK SHALL PROVIDE ANY AVAILABLE OPTIONS THAT ARE ACCEPTA-
 BLE TO THE FEDERAL HOME LOAN BANK FOR SUCH INSURER-MEMBER  TO  RENEW  OR
 RESTRUCTURE  AN  ADVANCE  TO  DEFER  ASSOCIATED  PREPAYMENT FEES, TO THE
 EXTENT THAT MARKET CONDITIONS, THE TERMS OF THE ADVANCE  OUTSTANDING  TO
 THE  INSURER-MEMBER,  THE  APPLICABLE  POLICIES OF THE FEDERAL HOME LOAN
 BANK AND COMPLIANCE WITH THE FEDERAL HOME LOAN BANK ACT AND  CORRESPOND-
 ING REGULATIONS PERMIT.
   (4)  NOTHING  IN  THIS  SUBSECTION  SHALL AFFECT THE FEDERAL HOME LOAN
 BANK'S RIGHTS PURSUANT TO 12 CFR 1266.4, WHICH RELATES TO LIMITATIONS ON
 ACCESS TO ADVANCES.
   § 2. Section 7419 of the insurance law is  amended  by  adding  a  new
 subsection (c) to read as follows:
   (C)  NOTWITHSTANDING  SUBSECTIONS  (A) AND (B) OF THIS SECTION AND ANY
 OTHER PROVISION OF THIS ARTICLE, A FEDERAL HOME LOAN BANK SHALL  NOT  BE
 STAYED,  ENJOINED,  OR PROHIBITED FROM EXERCISING ANY RIGHT OR ENFORCING
 ANY OBLIGATION UNDER A FEDERAL HOME LOAN BANK SECURITY AGREEMENT  RELAT-
 ING TO COLLATERAL PLEDGED BY AN INSURER-MEMBER TO SUCH FEDERAL HOME LOAN
 BANK.
   §  3.  Section  7409  of  the insurance law is amended by adding a new
 subsection (d) to read as follows:
   (D) NOTWITHSTANDING SUBSECTIONS (A), (B) AND (C) OF THIS  SECTION,  OR
 ANY  OTHER  PROVISION  OF  THIS ARTICLE, THE RECEIVER SHALL NOT DISAVOW,
 REJECT, OR REPUDIATE A FEDERAL HOME LOAN BANK SECURITY AGREEMENT OR  ANY
 PLEDGE  AGREEMENT,  SECURITY  AGREEMENT, COLLATERAL AGREEMENT, GUARANTEE
 AGREEMENT, OR OTHER SIMILAR ARRANGEMENT OR CREDIT  ENHANCEMENT  RELATING
 TO A SECURITY AGREEMENT TO WHICH A FEDERAL HOME LOAN BANK IS A PARTY.
   § 4. This act shall take effect immediately.