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A02130 Summary:

BILL NOA02130A
 
SAME ASSAME AS S02890-A
 
SPONSORSimotas (MS)
 
COSPNSRCook, Titone, Peoples-Stokes
 
MLTSPNSRBraunstein, Hevesi
 
Amd SS1405 & 1410, Ins L
 
Increases the permitted foreign investments by life insurance companies from sixteen to twenty percent of the insurer's assets.
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A02130 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2130--A
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (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:
 
     1    Section 1. Paragraph 7 of subsection (a) of section 1405 of the insur-
     2  ance  law, subparagraph (C) as amended by chapter 60 of the laws of 2008
     3  and subparagraph (D) as amended by chapter 162 of the laws of  1999,  is
     4  amended to read as follows:
     5    (7) Foreign investments. (A) Canadian investments substantially of the
     6  same types as those eligible for investment under paragraphs one through
     7  six  of  this  subsection,  provided  that,  after  giving effect to any
     8  investment made under this subparagraph, the aggregate amount of invest-
     9  ments made under this subparagraph and then held by such  insurer  shall

    10  not  exceed ten percent of the insurer's admitted assets, except where a
    11  greater amount is permitted under subparagraph (B) below (in which  case
    12  the provisions of this subparagraph shall not be applicable).
    13    (B) In the case of any domestic insurer that is authorized to do busi-
    14  ness  in a foreign country or possession of the United States of America
    15  or that has outstanding insurance, annuity or reinsurance  contracts  on
    16  lives   or  risks  resident  or  located  in  such  foreign  country  or
    17  possession, investments in such foreign country or possession  that  are
    18  substantially  of  the same types as those eligible for investment under
    19  paragraphs one through six of this  subsection;  provided  that,  except
    20  where  a greater amount is permitted under subparagraph (A) above, after
    21  giving effect to any investment in such foreign  country  or  possession

    22  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
 
     1  currency of such foreign country or possession  and  of  investments  in
     2  such foreign country or possession made under this subparagraph and then
     3  held  by such insurer shall not exceed one and one-half times the amount
     4  of such insurer's reserves and other obligations under such contracts or
     5  the amount which such insurer is required by law to invest in such coun-
     6  try or possession, whichever shall be greater.
     7    (C)  Investments in foreign countries, in addition to Canadian invest-

     8  ments and investments permitted by subparagraph (B) of  this  paragraph,
     9  that  are  substantially of the same types as those eligible for invest-
    10  ment under paragraphs one through six of this subsection, provided that,
    11  after giving effect to any investment made under this subparagraph,  the
    12  aggregate  amount  of  investments qualified under this subparagraph and
    13  then held by such insurer shall not exceed [sixteen] twenty  percent  of
    14  the insurer's admitted assets; and
    15    (i) the issuer or obligor is (I) a jurisdiction, which is rated in one
    16  of  the  four  highest  rating  categories by an independent, nationally
    17  recognized United States rating agency, (II) any  political  subdivision
    18  or  other  governmental  unit of any such jurisdiction, or any agency or
    19  instrumentality of any such jurisdiction, political subdivision or other

    20  governmental unit or (III) an institution which is organized  under  the
    21  laws  of  any such jurisdiction or, in the case of such paragraphs three
    22  and four of this subsection, the real property is located  in  any  such
    23  jurisdiction; and
    24    (ii)  [if  the  investment  is  denominated in any currency other than
    25  United States dollars, the investment is  effectively  hedged,  substan-
    26  tially in its entirety, against the United States dollar:
    27    (I)  for  an  insurer  that  has an approved derivative use plan under
    28  section one thousand four hundred  ten  of  this  article,  pursuant  to
    29  contracts  or  agreements entered into under and in accordance with that
    30  derivative use plan and subject  to  the  counterparty  exposure  limits
    31  thereunder; or

    32    (II)  for any other insurer, pursuant to contracts or agreements which
    33  are: (aa) issued by or traded on a securities exchange or board of trade
    34  regulated under the laws of the United States or Canada  or  a  province
    35  thereof  or (bb) entered into with: (aaa) a United States banking insti-
    36  tution which has assets in excess of five billion dollars and which  has
    37  obligations  outstanding,  or  has  a parent corporation which has obli-
    38  gations outstanding, which are rated in one of the  two  highest  rating
    39  categories  by  an  independent,  nationally  recognized,  United States
    40  rating agency; (bbb) a broker-dealer registered with the Securities  and
    41  Exchange Commission which has net capital in excess of two hundred fifty
    42  million dollars; or

    43    (ccc) any other banking institution which has assets in excess of five
    44  billion  dollars  and which has obligations outstanding, or has a parent
    45  corporation which has obligations outstanding, which are rated in one of
    46  the two highest rating categories by an independent,  nationally  recog-
    47  nized, United States rating agency and which is organized under the laws
    48  of  a jurisdiction which is rated in one of the two highest rating cate-
    49  gories by an independent, nationally recognized,  United  States  rating
    50  agency; and
    51    (iii)  provided  that] an insurer shall not make any investment in any
    52  foreign country pursuant  to  this  subparagraph,  if  such  investment,
    53  together  with all other investments in the same foreign country so made

    54  and then held by such insurer, would exceed [six] seven percent  of  the
    55  insurer's admitted assets.

        A. 2130--A                          3
 
     1    (D) In addition to the foreign investments permitted under the preced-
     2  ing  subparagraphs  of  this  paragraph,  foreign  investments  that are
     3  substantially of the same types as those eligible for  investment  under
     4  paragraphs  one  through  six  of  this subsection, provided that, after
     5  giving effect to any investment made under this subparagraph, the aggre-
     6  gate amount of investments made under this subparagraph and then held by
     7  such insurer shall not exceed [four] six percent of the insurer's admit-
     8  ted  assets,  and  provided  further  that an insurer shall not make any
     9  investment in any foreign country pursuant to this subparagraph, if such

    10  investment, together with all other  investments  in  the  same  foreign
    11  country  so made and then held by such insurer, would exceed [two] three
    12  percent of the insurer's admitted assets.
    13    § 2. Section 1405 of the insurance law is  amended  by  adding  a  new
    14  subsection (f) to read as follows:
    15    (f)  Any investment may be denominated in a currency other than United
    16  States dollars, provided that the aggregate amount of all  such  invest-
    17  ments (other than investments made pursuant to subparagraphs (A) and (B)
    18  of  paragraph  seven  of  subsection  (a)  of this section) that are not
    19  effectively hedged, substantially in their entirety, against the  United
    20  States  dollar,  reduced, on a currency by currency basis, by the amount

    21  of foreign-currency denominated insurance  liabilities  may  not  exceed
    22  four  percent  of  the insurer's admitted assets. An investment shall be
    23  deemed to be effectively hedged, substantially in its  entirety,  if  it
    24  has been hedged:
    25    (1)  for  an  insurer  that  has an approved derivative use plan under
    26  section one thousand four hundred  ten  of  this  article,  pursuant  to
    27  contracts  or  agreements entered into under and in accordance with that
    28  derivative use plan and subject  to  the  counterparty  exposure  limits
    29  thereunder; or
    30    (2) for any other insurer, pursuant to contracts or agreements (deriv-
    31  ative  transactions)  which are cleared through a "derivatives clearing-

    32  house" or entered into with a "qualified counterparty", as  those  terms
    33  are  defined  pursuant  to  subsection  (f) of section one thousand four
    34  hundred ten of this article.
    35    § 3. Paragraph 2 of subsection (c) of section 1410  of  the  insurance
    36  law,  as added by chapter 650 of the laws of 1998, is amended to read as
    37  follows:
    38    (2) Transactions entered into to effectively hedge the  currency  risk
    39  of  investments  denominated  in  a  currency  other  than United States
    40  dollars, pursuant to [subparagraph (C) of paragraph seven of  subsection
    41  (a)]  subsection  (f)  of section one thousand four hundred five of this
    42  article, shall not be included in the limits under paragraph one of this
    43  subsection.
    44    § 4. This act shall take effect immediately.
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