STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
|David A. Paterson
James J. Wrynn
OGC Op. No. 09-09-06
The Office of General Counsel issued the following opinion on September 30, 2009 representing the position of the New York State Insurance Department.
Re: N.Y. Ins. Law
Do the requirements set forth in New York Ins. Law
Yes. The requirements set forth in N.Y. Ins. Law
The inquirer reports that his organization manages the investments of insurance companies, including the assets held in Regulation 114 Trusts. He notes that Regulation 114 is silent as to the point in time at which the requisite rating requirement is applied with respect to assets contained in the trust and asks whether N.Y. Ins. Law
Regulation 114 governs the funding and operation of credit for reinsurance trusts. The regulation, at 11 NYCRR
Article 14 of the N. Y. Insurance Law contains the rules governing investments by insurers. N.Y. Ins. Law
(b) All financial tests and other requirements for the making of any investment are satisfied if complied with on the date of acquisition by the insurer, except as otherwise permitted by this chapter or by regulation.
As is clear from the statute’s language, absent any express legal or regulatory authorization to the contrary, any financial requirement (such as the rating of a given security) is measured as of the date of the acquisition of the security. Accordingly, because nothing in Regulation 114 or elsewhere in the Insurance Law specifies otherwise, any assets contributed to a Regulation 114 trust must meet any applicable statutory rating requirement as of the asset’s acquisition date.
For further information you may contact Supervising Attorney Michael Campanelli at the New York City Office.