§ 6406 — Investments; exception

New York § 6406

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 64: Title Insurance Corporations

Text

§ 6406. Investments; exception. (a) Every title insurance corporation\norganized and doing business under this article shall invest and keep\ninvested an amount at least equal to its required minimum capital in the\ntypes of investments specified in section one thousand four hundred two\nof this chapter, except that it shall invest and keep invested at least\nthirty-five percent of its minimum capital in those types of investments\nspecified in paragraphs one and two of subsection (b) of such section.\n (b) Every title insurance corporation organized and doing a title\ninsurance business under this article shall confine its investment of\nall of its funds, other than those specified in subsection (a) hereof,\nto investments permitted by paragraph two of subsection (a) of section\none thousand four hundred three of this chapter except as follows:\n (1) No loan secured by mortgage on any one piece or parcel of property\n(excluding any part guaranteed under title three of the Servicemen's\nReadjustment Act of 1944 (38 U.S.C. § 1801)) shall at the time of\ninvestment exceed (i) three-fourths of the value of the real property\nsecuring the same if (I) such real property is primarily improved by a\nsingle family residence, (II) the aggregate principal amount of the loan\nor loans secured by such real property does not exceed thirty thousand\ndollars, and (III) the evidences of indebtedness provide for\namortization of principal over a period of not more than thirty years,\nor (ii) two-thirds of the value of the real property securing the same\nin all other cases, as shown by the appraisal of one or more competent\nand experienced appraisers.\n (2) Any such corporation may invest in loans secured by mortgages on\nreal property guaranteed as to principal or interest by the United\nStates.\n (3) No title insurance corporation shall at any time have invested in\nbonds, notes or other evidences of indebtedness secured by deeds of\ntrust or real estate mortgages, as specified in this paragraph except\nbonds or notes secured by mortgage or trust deed guaranteed or insured\nby the federal housing administration under an act of congress of the\nUnited States of June 27, 1934, entitled the "National Housing Act,"(12\nU.S.C. § 1701). Notwithstanding the provisions of clause (I) of item (v)\nof subparagraph (A) of paragraph four of subsection (a) of section one\nthousand four hundred four of this chapter, the aggregate investments\nheld by a title insurance corporation of the types described in such\nsubparagraph and in purchase money mortgages received by it in part\npayment of the consideration for the sale or exchange of real property\nowned by it, shall not exceed seventy percent of its admitted assets as\nshown by its last statement on file with the superintendent.\n (4) No title insurance corporation shall invest in or lend upon the\nsecurity of any one parcel of property an amount exceeding seven percent\nof its total admitted assets, except that such corporation may invest in\nor lend upon an obligation or obligations secured by a mortgage or\nmortgages on property guaranteed as to principal or interest by the\nUnited States, or guaranteed or insured under the National Housing Act\n(12 U.S.C. § 1701), an amount not exceeding twenty-five percent of its\ntotal admitted assets, if at the time of the making of the commitment\nfor such investment or loan such corporation shall have entered into an\nagreement in writing with a mortgagee approved under the provisions of\nthe National Housing Act, for the sale of such investment or loan for an\namount in cash not less than the full amount of such investment or loan.\n (5) Notwithstanding the provisions of paragraph eight of subsection\n(a) of section one thousand four hundred four of this chapter, no title\ninsurance corporation shall invest in, or otherwise acquire or loan upon\nin any one institution's outstanding equity interests an amount which\nexceeds two percent of the admitted assets of such title insurance\ncorporation as shown by its last statement on file with the\nsuperintendent. The aggregate cost of all investments in equity\ninterests then held by any title insurance corporation pursuant to this\nparagraph, paragraph six hereof, section one thousand four hundred three\nand paragraph eight of subsection (a) of section one thousand four\nhundred four of this chapter shall not exceed the lesser of twenty-five\npercent of the insurer's total admitted assets or one-half of the\ninsurer's surplus to policyholders as shown by its last statement on\nfile with the superintendent.\n (6) Notwithstanding the provisions of paragraph eight of subsection\n(a) of section one thousand four hundred four of this chapter and\nparagraph five hereof, a title insurance corporation may invest in the\nshares of other insurance corporations and in the shares and obligations\nof any corporation which is engaged exclusively in a kind of business\nproperly incidental to the insurance business of such title insurance\ncorporation, amounts which do not in total exceed ten percent of its\ntotal admitted assets as shown by its last statement on file with the\nsuperintendent.\n (7) No title insurance corporation shall hold a direct or indirect\nownership interest in a risk retention group, as defined in article\nfifty-nine of this chapter, other than in a risk retention group all of\nwhose members are insurance companies.\n