S T A T E O F N E W Y O R K
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5347--A
Cal. No. 1449
2025-2026 Regular Sessions
I N S E N A T E
February 20, 2025
___________
Introduced by Sen. COMRIE -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance -- reported
favorably from said committee, ordered to first and second report,
amended on second report, ordered to a third reading, and to be
reprinted as amended, retaining its place in the order of third read-
ing
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 IN GOOD
FAITH, WITHIN FIVE 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.
LBD09494-03-5
S. 5347--A 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 REDEMPTION OR REPURCHASE OF FEDERAL HOME LOAN BANK STOCK OR
EXCESS STOCK OF ANY CLASS THAT AN INSURER-MEMBER IS REQUIRED TO OWN
CONSISTENT WITH FEDERAL LAW AND REGULATIONS, THE FEDERAL HOME LOAN
BANK'S CAPITAL PLAN, AND THE CAPITAL STOCK PRACTICES CURRENTLY APPLICA-
BLE TO THE FEDERAL HOME LOAN BANK'S ENTIRE MEMBERSHIP.
(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) PRIOR TO AND DURING A PROCEEDING UNDER THIS ARTICLE AGAINST AN
INSURER-MEMBER, THE DEPARTMENT, ITS RECEIVER OR REHABILITATOR SHALL BE
ENTITLED TO MAKE REASONABLE REQUESTS TO THE FEDERAL HOME LOAN BANK, AND
THE FEDERAL HOME LOAN BANK SHALL, TO THE FULLEST EXTENT PERMITTED BY
FEDERAL LAW, SUPPORT THE DEPARTMENT WITH EFFORTS TO:
(I) PERMIT AND FACILITATE COLLATERAL SUBSTITUTIONS;
(II) PERMIT AND FACILITATE TRANSFER OF AGREEMENT TO A PURCHASER AND/OR
ANOTHER FEDERAL HOME LOAN BANK MEMBER;
(III) PERMIT ADDITIONAL ADVANCES IN CASE OF THE NEED FOR ADDITIONAL
LIQUIDITY; OR
(IV) TAKE OTHER ACTIONS THAT MAY FACILITATE ORDERLY PROCEEDINGS PRIOR
TO AND DURING A DELINQUENCY.
(5) TO THE EXTENT PERMITTED BY APPLICABLE LAW AND FOR THE PURPOSES OF
A FEDERAL HOME LOAN BANK ASSISTING THE DEPARTMENT, A FEDERAL HOME LOAN
BANK SHALL UPON REQUEST OF THE DEPARTMENT PROVIDE IN CONFIDENCE TO THE
DEPARTMENT PERIODIC INFORMATION CONCERNING ITS FINANCIAL CONDITION,
UNDERWRITING, AND CREDIT OPINIONS REGARDING AN INSURER-MEMBER.
(6) 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.
