New York Laws
Article 17 - Subsidiaries of Domestic Life Insurance Companies and Certain Other Entities
1705 - Quantitative Limitations.

(2) Unless the superintendent shall have given prior written approval,
neither the parent corporation nor any subsidiary (other than a separate
account subsidiary or any subsidiary referred to in subsection (c) of
section one thousand seven hundred four of this article) may make any
investment in any subsidiary (not at the time exempt from this
paragraph), if, after giving effect to such investment, the investment
value of such subsidiary would aggregate more than fifteen percent (but
not more than two percent in the case of a parent corporation of the
type described in subsection (b) of section one thousand seven hundred
one of this article) of the parent corporation's admitted assets.
* NB See other sub§ (a) (Sep. amended - cannot be put together)
* (a)(1) Unless the superintendent shall have given prior written
approval, a parent corporation shall not make an investment for its own
account in any subsidiary (not at the time exempt from the provisions of
this section) if, after giving effect to such investment, the aggregate
investment value of all subsidiaries then directly invested in by the
parent corporation (excluding investments in subsidiaries at the time
exempted from this subsection) would be in excess of thirty percent (but
not more than twenty percent with respect to subsidiaries not having
their principal operations in this state and, in the case of a parent
corporation of the type described in subsection (b) of section one
thousand seven hundred one of this article, not more than ten percent)
of the parent corporation's admitted assets.
(2) Unless the superintendent shall have given prior written approval,
neither the parent corporation nor any subsidiary (other than a separate
account subsidiary or any subsidiary referred to in subsection (c) of
section one thousand seven hundred four of this article) may make any
investment in any subsidiary (not at the time exempt from this
paragraph), if, after giving effect to such investment, the investment
value of such subsidiary would aggregate more than fifteen percent (but
not more than two percent in the case of the parent corporation of the
type described in subsection (b) of section one thousand seven hundred
one of this article) of the parent corporation's admitted assets.
* NB See other sub§ (a) (Sep. amended - cannot be put together)
(b) "Admitted assets," for the purposes of this section, has the
meaning ascribed to it by subparagraph (B) of paragraph one of
subsection (b) of section one thousand four hundred five of this
chapter.
(c) (1) For the purposes of computations under paragraph one of
subsection (a) of this section, the aggregate investment value of all
subsidiaries at any time directly invested in by the parent corporation
(excluding investments in subsidiaries at the time exempted from
subsection (a) of this section) shall mean the sum of (i) the minimum
value of each such subsidiary of which equity securities (including
partnership interests) are directly held by the parent corporation, (ii)

indebtedness of such subsidiaries then outstanding to the extent
guaranteed by the parent corporation, and (iii) the unpaid principal
amount of loans and advances to such subsidiaries by the parent
corporation or by any investment subsidiary of the parent corporation
then outstanding (including the unpaid principal amount of bonds, notes
or other evidences of indebtedness of such subsidiaries held by the
parent corporation or by any such investment subsidiary). The minimum
value of a subsidiary as of any date shall be the greater of (i) the net
cost of the equity investment in such subsidiary by the parent
corporation or (ii) the pro rata interest of the parent corporation in
the net worth of such subsidiary.
(2) For purposes of computations under paragraph two of subsection (a)
of this section, the investment value of a subsidiary at any time shall
be an amount equal to the sum of (i) the minimum value of such
subsidiary, (ii) indebtedness of such subsidiary then outstanding to the
extent guaranteed by the parent corporation, and (iii) the unpaid
principal amount of loans and advances to the subsidiary by the parent
corporation or by any investment subsidiary of the parent corporation
then outstanding (including the unpaid principal amount of bonds, notes
or other evidences of indebtedness of the subsidiary held by the parent
corporation or by any such investment subsidiary). The minimum value of
a subsidiary as of any date shall be the greater of (i) the net cost of
the equity investment in such subsidiary by the parent corporation and
its subsidiaries or (ii) the pro rata interest of the parent corporation
and its subsidiaries in the net worth of such subsidiary.
(3) For purposes of this subsection, the "net cost of the equity
investment" by any person in a subsidiary at any time shall mean the
aggregate amount of contributions to and purchases of equity securities
(including partnership interests) and other equity interests of such
subsidiary (less repurchases of such equity securities and other equity
interests) by such person at such time and the "net worth" of a
subsidiary shall mean the net worth of the subsidiary determined in
accordance with generally accepted accounting principles, as of the end
of its most recent fiscal year. In determining the minimum value of a
holding company operating subsidiary, there shall be taken into account
the greater of the net cost of the equity investment of the holding
company operating subsidiary in each subsidiary or the pro rata interest
of the holding company operating subsidiary in the net worth of such
subsidiary. The superintendent may require, by regulation, that parent
corporations submit reports annually to the superintendent as to the
aggregate investment value of all subsidiaries held by the parent
corporation determined in accordance with paragraph one of this
subsection or the investment value of any particular subsidiary or class
of subsidiaries held by the parent corporation determined in accordance
with paragraph two of this subsection, which values may be required to
be audited by an independent public accountant in accordance with
generally accepted auditing standards.