Bill Text: NY A04925 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to certain voidable transfers affecting a federal home loan bank including injunctions and the conduct of delinquency proceedings against insurers domiciled in this state.

Spectrum: Partisan Bill (Democrat 13-0)

Status: (Engrossed) 2024-03-05 - REFERRED TO INSURANCE [A04925 Detail]

Download: New_York-2023-A04925-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          4925

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    February 27, 2023
                                       ___________

        Introduced  by  M.  of  A. HUNTER, STERN, LAVINE, SEAWRIGHT, MAGNARELLI,
          SIMON, DICKENS, ANDERSON, BURDICK, TAYLOR, SILLITTI, JACKSON  --  read
          once and referred to the Committee on Insurance

        AN  ACT  to  amend  the  insurance  law, in relation to certain voidable
          transfers affecting a federal home loan bank

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Section  7425 of the insurance law is amended by adding a
     2  new subsection (e) to read as follows:
     3    (e) (1) Notwithstanding subsection (a) of this section  or  any  other
     4  provision of this article to the contrary, (i) a receiver shall not void
     5  a  transfer  of  money  or other property arising under or in connection
     6  with a federal home loan bank security agreement that is made before the
     7  commencement of a formal proceeding under this article in  the  ordinary
     8  course  of business and in compliance with the security agreement unless
     9  such transfer was made with actual intent to hinder,  delay  or  defraud
    10  the  insurer-member,  a  receiver  appointed  for  the insurer-member or
    11  existing or future creditors; and (ii)  a  receiver  shall  not  void  a
    12  redemption  or  repurchase  of  any stock or equity securities which was
    13  made by the federal home loan  bank  within  four  months  of  a  formal
    14  commencement  of  the  delinquency  proceedings  or which received prior
    15  approval of the receiver.
    16    (2) Following the appointment of a receiver for an insurer-member  and
    17  upon  request  of the receiver, the federal home loan bank shall, within
    18  ten days of such request, provide a process and establish timing for all
    19  of the following:
    20    (i) the release of collateral  that  exceeds  the  lending  value,  as
    21  determined in accordance with the federal home loan bank security agree-
    22  ment, required to support secured obligations remaining after any repay-
    23  ment of advances;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06810-01-3
        A. 4925                             2

     1    (ii)  the release of any collateral remaining in the federal home loan
     2  bank's possession following repayment in full of all outstanding secured
     3  obligations;
     4    (iii)  the  payment  of  fees  and the operation of deposits and other
     5  accounts with the federal home loan bank; and
     6    (iv) the possible redemption or repurchase of federal home  loan  bank
     7  stock or excess stock of any class that an insurer-member is required to
     8  own.
     9    (3) Upon the request of the receiver for an insurer-member, the feder-
    10  al  home loan bank shall provide any available options that are accepta-
    11  ble to the federal home loan bank for such insurer-member  to  renew  or
    12  restructure  an  advance  to  defer  associated  prepayment fees, to the
    13  extent that market conditions, the terms of the advance  outstanding  to
    14  the  insurer-member,  the  applicable  policies of the federal home loan
    15  bank and compliance with the federal home loan bank act and  correspond-
    16  ing regulations permit.
    17    (4)  Nothing  in  this  subsection  shall affect the federal home loan
    18  bank's rights pursuant to 12 CFR 1266.4, which relates to limitations on
    19  access to advances.
    20    § 2. Section 7419 of the insurance law is  amended  by  adding  a  new
    21  subsection (c) to read as follows:
    22    (c)  Notwithstanding  subsections  (a) and (b) of this section and any
    23  other provision of this article, a federal home loan bank shall  not  be
    24  stayed,  enjoined,  or prohibited from exercising any right or enforcing
    25  any obligation under a federal home loan bank security agreement  relat-
    26  ing to collateral pledged by an insurer-member to such federal home loan
    27  bank.
    28    §  3.  Section  7409  of  the insurance law is amended by adding a new
    29  subsection (d) to read as follows:
    30    (d) Notwithstanding subsections (a), (b) and (c) of this  section,  or
    31  any  other  provision  of  this article, the receiver shall not disavow,
    32  reject, or repudiate a federal home loan bank security agreement or  any
    33  pledge  agreement,  security  agreement, collateral agreement, guarantee
    34  agreement, or other similar arrangement or credit  enhancement  relating
    35  to a security agreement to which a federal home loan bank is a party.
    36    § 4. This act shall take effect immediately.