The Office of General Counsel issued the following opinion on February 27, 2003 representing the position of the New York State Insurance Department.

Regulation 114 Trusts / Permissible Assets Requirements


In applying the 5% limitation set forth in N.Y. Ins. Law § 1404(a)(2) (McKinney 2000) in the context of the permitted investment types allowed for "Regulation 114 Trusts" set forth in N.Y. Comp. Codes R. & Regs. tit. 11, § 126.5(a)(2), does such limit refer to 5% per issue or 5% of the trust, and, if the prior is the case what is the applicable definition for "issue"?


The inquirer’s inquiry is moot in light of recent reconsideration of the issue by the Department. It is now the position of the Department that the 5% limitation does not apply in the context of a Regulation 114 Trust.


The inquirer’s inquiry did not provide any facts.


The inquirer’s inquiry was prompted by Office of General Counsel Opinion No. 02-06-27 (June 24, 2002) which concluded that the 5% limit contained in N. Y. Ins. Law §1404(a)(2) (McKinney 2000) would apply in the context of the Regulation 114 trust. Upon reconsideration of the issue, however, the Department has withdrawn this Opinion, because of a determination that it was not the intent of Regulation 114 to apply the quantitative standards of N. Y. Ins. Law § 1404(a)(2) in the context of a Regulation 114 Trust.

For further information you may contact Supervising Attorney Michael Campanelli at the New York City Office.