N.Y. Insurance Law § 1314: Deposits; custody, beneficiaries, exchanges, inspection and income

§ 1314. Deposits; custody, beneficiaries, exchanges, inspection and

income. (a) (1) The superintendent shall be the official custodian of

all deposits of securities required or authorized by the provisions of

this chapter, unless otherwise specifically provided by law. He shall

keep the same in a safe place provided by the state or in custody for

his account with a bank, trust company or national bank in this state

which may be designated by the depositing insurer, subject to the

approval of the superintendent.

(2) All such securities shall be held by the superintendent, in trust,

without preference or priority to any beneficiary entitled to share

therein, for the security of the depositing insurer's policyholders

within the United States, its territories and possessions, except that

securities deposited by an alien insurer shall be held in trust for the

security of the policyholders and creditors of the depositing insurer

within the United States, its territories and possessions.

(3) Such securities may be registered in the name of the

superintendent as such trustee or, at the option of the depositing

insurer, may be in bearer form.

(4) "Policyholders" as used in this chapter in any provision relating

to beneficiaries of deposits includes all persons having a legal or

equitable right against the depositing insurer or the insured arising

out of an insurance or annuity contract. "Depositing insurer" as used in

this chapter includes any lawful successor in interest to such insurer.

(b) The depositing insurer shall not assign or otherwise transfer all

or any part of its interest in any such deposit, without the approval of

the superintendent, and any such transfer, whether voluntary or by

operation of law, without such approval, shall be void. The

superintendent may approve transfer of all of the depositing insurer's

residuary interest in such deposit if with his approval the transferee

assumes all liabilities of the transferor to the beneficiaries of such

deposit.

(c) No judgment creditor or other claimant may levy upon any deposit

or part thereof. Upon the making of an order by a court of competent

jurisdiction for the liquidation, rehabilitation or conservation of any

depositing insurer, the deposit and the income therefrom shall be

transferred to the superintendent as liquidator, rehabilitator or

conservator.

(d) All deposits of securities held by the superintendent which were

made pursuant to any prior insurance law shall be deemed to be held in

compliance with the provisions of this chapter, for the purposes for

which such deposits were originally made.

(e) The depositing insurer may from time to time exchange for any

deposited securities other securities eligible under the provisions of

this chapter if in the opinion of the superintendent the aggregate value

of such deposit will not be thereby reduced below the amount required by

law.

(f) So long as the depositing insurer shall continue solvent and shall

comply with the laws of this state applicable to it, the superintendent

shall permit it to collect and dispose of the income on deposited

securities.

(g) (1) No exchange, release or other transfer of deposited

securities, or any interest therein, shall be valid unless: (i)

countersigned by a member of the state tax commission or a person

designated for such purpose by such commission, and (ii) requested by

the depositing insurer. Except for a transfer for redemption or

refunding, the depositing insurer's request must be evidenced in such

manner as the superintendent requires.

(2) The department of taxation and finance and the department of

financial services shall each keep a book with entries showing the name

of the insurer for whose account such transfer is made by the

superintendent, the name of the transferee unless made in blank, and the

par value of the securities transferred.

(3) Within five days after countersigning and entering the same, the

commissioner of taxation and finance shall advise by mail the insurer

from whose account such transfer is made, of the kind and amount of

security transferred.

(h) Every depositing insurer shall, at least once during each calendar

year, cause such securities to be examined by some person duly

authorized in writing. Such person shall, at the request of the

superintendent, execute a certificate stating the result of such

examination.