Bill Text: NY S05730 | 2019-2020 | General Assembly | Introduced

---

Bill Title: Relates to reserve investments for certain insurers in exchange-traded funds; expands the scope of permissible investments for certain insurers to include bond exchange-traded funds, provided that such funds have received a valid designation from the Securities Valuation Office of the National Association of Insurance Commissioners such that it may be filed on the statutory long-term bond obligation Schedule D-1 as promulgated by the Securities Valuation Office.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-01-08 - REFERRED TO INSURANCE [S05730 Detail]

Download: New_York-2019-S05730-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          5730

                               2019-2020 Regular Sessions

                    IN SENATE

                                      May 13, 2019
                                       ___________

        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  reserve  investments
          for certain insurers in exchange-traded funds

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subsection (a) of section 1401  of  the  insurance  law  is
     2  amended by adding a new paragraph 19 to read as follows:
     3    (19)  "Bond exchange-traded fund" means an exchange-traded fund regis-
     4  tered under the federal Investment Company Act of 1940, as amended, that
     5  has a principal investment strategy of  investing  primarily  in  bonds,
     6  loans or other debt instruments.
     7    §  2.  Paragraph 10 of subsection (a) of section 1404 of the insurance
     8  law, as added by chapter 324 of the laws of 1992, is amended to read  as
     9  follows:
    10    (10)  Investment companies.   (A) Securities of any investment company
    11  registered pursuant to the federal Investment Company Act  of  1940,  15
    12  U.S.C.  §  802,  as  amended,  including  exchange-traded funds, if such
    13  company:
    14    (i) invests at least ninety percent of its  assets  in  the  types  of
    15  securities  which  qualify  as  a  reserve  investment  pursuant  to the
    16  provisions of paragraph one, two or three of this  subsection  or  which
    17  invest  in  securities  which are determined by the superintendent to be
    18  substantively similar to the types of securities set forth in such para-
    19  graphs; [or]
    20    (ii) invests in bond exchange-traded funds, provided that  such  funds
    21  have  received  a valid designation from the Securities Valuation Office
    22  of the National Association of Insurance Commissioners such that it  may
    23  be  filed  on  the  statutory  long-term bond obligation Schedule D-1 as
    24  promulgated by the Securities Valuation Office; or
    25    [(ii)] (iii) invests at least ninety percent  of  its  assets  in  the
    26  types of equity interests which qualify as a reserve investment pursuant
    27  to the provisions of paragraph eight of this subsection.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11664-01-9
        S. 5730                             2

     1    (B) Investment limitations.  Investments made by an insurer subject to
     2  the  provisions  of paragraph two of subsection (a) or subsection (b) of
     3  section one thousand four hundred three of this article shall not exceed
     4  the following limitations:
     5    (i)  in  any  investment company qualifying under item (i) of subpara-
     6  graph (A) hereof, ten percent of such insurer's admitted assets as shown
     7  by its last statement on file with the superintendent and the  aggregate
     8  amount  of  investment in such qualifying investment companies shall not
     9  exceed twenty-five percent of such insurer's admitted assets as shown by
    10  its last statement on file with the superintendent and the cost of  such
    11  investments  shall  not  be  included  when  calculating the permissible
    12  aggregate value of  equity  interests  pursuant  to  the  provisions  of
    13  subparagraph (B) of paragraph eight of this subsection; [and]
    14    (ii)  in  any  single  bond  exchange-traded  fund  under item (ii) of
    15  subparagraph (A) hereof, fifteen  percent  of  such  insurer's  admitted
    16  assets  as  shown  by its last statement on file with the superintendent
    17  and the cost of such investments shall not be included when  calculating
    18  the  permissible  aggregate  value  of  equity interests pursuant to the
    19  provisions of subparagraph (B) of paragraph eight  of  this  subsection;
    20  and
    21    [(ii)]  (iii)  in  any investment company qualifying under item [(ii)]
    22  (iii) of subparagraph (A) hereof, five percent of such insurer's  admit-
    23  ted  assets  as shown by its last statement on file with the superinten-
    24  dent and the aggregate amount of investment in such  qualifying  invest-
    25  ment  companies  shall  be  included  when  calculating  the permissible
    26  aggregate value of  equity  interests  pursuant  to  the  provisions  of
    27  subparagraph (B) of paragraph eight of this subsection.
    28    § 3. Subsection (a) of section 1405 of the insurance law is amended by
    29  adding a new paragraph 9 to read as follows:
    30    (9)  Investment  companies.  (A)  Securities of any investment company
    31  registered pursuant to the federal Investment Company Act  of  1940,  15
    32  U.S.C.  §  802,  as  amended,  including  exchange-traded funds, if such
    33  company:
    34    (i) invests at least ninety percent of its  assets  in  the  types  of
    35  securities  which  qualify  as  a  reserve  investment  pursuant  to the
    36  provisions of paragraph one, two or three of this  subsection  or  which
    37  invest  in  securities  which are determined by the superintendent to be
    38  substantively similar to the types of securities set forth in such para-
    39  graphs;
    40    (ii) invests in bond exchange-traded funds, provided that  such  funds
    41  have  received  a valid designation from the Securities Valuation Office
    42  of the National Association of Insurance Commissioners such that it  may
    43  be  filed  on  the  statutory  long-term bond obligation Schedule D-1 as
    44  promulgated by the Securities Valuation Office; or
    45    (iii) invests at least ninety percent of its assets in  the  types  of
    46  equity  interests  which qualify as a reserve investment pursuant to the
    47  provisions of paragraph eight of this subsection.
    48    (B) Investments made pursuant to item (iii)  of  subparagraph  (A)  of
    49  this paragraph shall be included when calculating the permissible aggre-
    50  gate  value  of  equity interests pursuant to this section.  Investments
    51  made pursuant to items (i) and (ii) of subparagraph (A)  of  this  para-
    52  graph  shall  not be included when calculating the permissible aggregate
    53  value of equity interests pursuant to this section.
    54    § 4. This act shall take effect immediately.