N.Y. Insurance Law § 4526: Investments of fraternal benefit societies

§ 4526. Investments of fraternal benefit societies. (a) For purposes

of investments made pursuant to the provisions of section one thousand

four hundred four of this chapter, the term "institution" shall only

include a corporation, a joint-stock association, and a business trust

and the term "obligations" shall only include bonds, debentures, notes,

or other evidences of indebtedness. Notwithstanding the provisions set

forth in items (ii) and (iv) of subparagraph (A) of paragraph two of

subsection (a) of such section, a society is authorized to invest, in an

amount not to exceed thirty-three percent of its admitted assets as

shown by its last statement on file with the superintendent, in

obligations of American institutions which:

(1) are rated BBB or higher (or the equivalent thereto) by a

securities rating agency recognized by the superintendent, or if not so

rated, are similar in structure and in all material respects to other

obligations of the same institution which are so rated, or

(2) have been given at least the second highest quality designation by

the Securities Valuation Office of the National Association of Insurance

Commissioners.

(b) Investments in loans secured by real property and investments in

real property made pursuant to the provisions of paragraphs four and

five of subsection (a) of such section shall be permitted only to the

extent that such investments are acquired or held directly by such

society.

(c) Foreign investments made pursuant to the provisions of paragraph

six of such subsection shall only consist of the following:

(1) Investments in Canada which are substantially of the same kinds,

classes and investment grades as those eligible for investment under

other provisions of such subsection. The aggregate amount of such

investments held at any time shall not exceed the greater of ten percent

of the society's admitted assets as shown by its last statement on file

with the superintendent or the amount, if any, permitted pursuant to

paragraph two hereof.

(2) Investments in a foreign country or in a possession of the United

States if the society is authorized to do business therein, or if the

society has outstanding insurance, annuity or reinsurance contracts on

lives or risks resident or located therein; provided such investments

are substantially of the same kinds, classes and investment grades as

those eligible for investment under other provisions of such subsection.

The aggregate amount of such investments and of cash in the currency of

such country or possession at any time held shall not, except as

permitted by paragraph one hereof, exceed the amount which such society

is required by law to invest in such country or possession or one and

one-half times the amount of its reserves and other obligations under

such contracts, whichever is greater.

(3) Investments in any foreign country, in addition to investments

permitted under paragraphs one and two hereof, which are substantially

of the same kinds, classes and investment grades, and in the same

proportions, as those eligible for investment under other provisions of

such subsection and subsection (a) of this section. The aggregate amount

of such investments made pursuant to this paragraph shall not exceed

four percent of the society's admitted assets as shown by its last

statement on file with the superintendent and provided that a society

shall not make any investment in any foreign country pursuant to this

paragraph, if such investment, together with all other investments in

the same foreign country so made and then held by such insurer, would

exceed one percent of the society's admitted assets as shown by its last

statement on file with the superintendent.

(d) Investments in equity interests made pursuant to paragraph eight

of such subsection shall be limited to investments in common shares and

shall not include investments in partnership interests or other equity

interests.