§ 1408 — Acquisition of insurance company shares; limitations thereon

§ 1408. Acquisition of insurance company shares; limitations thereon.\n(a) Any insurer which makes investments under the authority of\nsubsection (c) of section one thousand four hundred three of this\narticle and which meets the requirements of such subsection and section\none thousand four hundred two of this article, may invest in, or\notherwise acquire, the shares, including voting trust certificates,\ncertificates of deposit, interim receipts and other similar instruments\nrepresenting such shares, of any other insurance companies, including\nfor purposes of this section any corporation having a majority of its\nassets invested in one or more insurance companies, in an amount which,\ntogether with its present holdings and with any indirect or\nproportionate interest in insurance company shares held by it through\nany intermediate subsidiary, shall not exceed in value thirty-five\npercent of the surplus to policyholders of such acquiring insurer, or\nfifty percent of its surplus over and above its liabilities and capital,\nwhichever is greater. No United States branch of an alien insurer shall\nbe permitted to acquire or hold any shares of any alien insurance\ncorporation.\n (b) This section shall not prohibit the acquisition of insurance\ncompany shares by the acceptance of a stock dividend nor prohibit the\nowner of previously lawfully acquired shares of an insurance company\nfrom making a contribution, with the approval of the superintendent, to\nsuch other insurance company's surplus. Notwithstanding any other\nprovisions of this chapter, any domestic insurer or United States branch\nof an alien insurer, which, prior to January first, nineteen hundred\nforty, acquired shares of other insurance companies in accordance with\nlaw in force at the time of such acquisition, may continue to hold them.\nIn determining the financial condition of a domestic insurer shares of\nother insurance companies shall be valued in accordance with subsection\n(c) of section one thousand four hundred fourteen of this article but in\nno event shall their aggregate value be allowed as an admitted asset in\nexcess of fifty per centum of the surplus to policyholders or sixty per\ncentum of the surplus of such insurer, whichever is greater.\n (c) In applying the formulas of this section, the initial calculation\nof surplus shall include voluntary reserves not required by law and the\nvalue of insurance company shares before adjustment for any excess\nholdings thereof.\n (d) A United States branch of an alien insurer, other than one\nlicensed to do in this state the business of life insurance, shall be\nsubject to the foregoing limitations, except that its trusteed surplus\nstatement shall be used in determining compliance. For the purpose of\nthis section the surplus to policyholders of a United States branch\nshall be deemed to be its trusteed surplus and its surplus shall be\ndeemed to be its trusteed surplus less an amount equal to the\npaid-in-capital specified in table one of paragraph one of subsection\n(a) of section four thousand one hundred three of this chapter for a\ndomestic stock property/casualty insurance company licensed to do the\nsame kinds of insurance except as such amount may be modified by\nparagraph five of subsection (a) of section four thousand one hundred\nthree of this chapter.\n