§ 87. Investment of surplus or reserve. 1. Any of the reserve funds\nbelonging to the state insurance fund, by order of the commissioners,\napproved by the superintendent of financial services, may be invested in\nthe types of securities described in subdivisions one, two, three, four,\nfive, six, eleven, twelve, twelve-a, thirteen, fourteen, fifteen,\nnineteen, twenty, twenty-one, twenty-one-a, twenty-four, twenty-four-a,\ntwenty-four-b, twenty-four-c and twenty-five of section two hundred\nthirty-five of the banking law or in paragraph two of subsection (a) of\nsection one thousand four hundred four of the insurance law except that\nup to five percent of such reserve funds may be invested in the\nsecurities of any solvent American institution as described in such\nparagraph irrespective of the rating of such institution's obligations\nor other similar qualitative standards described therein.\n 2. Any of the surplus funds belonging to the state insurance fund, by\norder of the commissioners, approved by the superintendent of financial\nservices, may be invested in the types of securities described in\nsubdivisions one, two, three, four, five, six, eleven, twelve, twelve-a,\nthirteen, fourteen, fifteen, nineteen, twenty, twenty-one, twenty-one-a,\ntwenty-four, twenty-four-a, twenty-four-b, twenty-four-c and twenty-five\nof section two hundred thirty-five of the banking law or, up to fifty\npercent of surplus funds, in the types of securities or investments\ndescribed in paragraphs two, three, eight and ten of subsection (a) of\nsection one thousand four hundred four of the insurance law, except that\nup to ten percent of surplus funds may be invested in the securities of\nany solvent American institution as described in such paragraphs\nirrespective of the rating of such institution's obligations or other\nsimilar qualitative standards described therein, and up to fifteen\npercent of surplus funds in securities or investments which do not\notherwise qualify for investment under this section as shall be made\nwith the care, prudence and diligence under the circumstances then\nprevailing that a prudent person acting in a like capacity and familiar\nwith such matters would use in the conduct of an enterprise of a like\ncharacter and with like aims as provided for the state insurance fund\nunder this article, but shall not include any direct derivative\ninstrument or derivative transaction except for hedging purposes.\nNotwithstanding any other provision in this subdivision, the aggregate\namount that the state insurance fund may invest in the types of\nsecurities or investments described in paragraphs three, eight and ten\nof subsection (a) of section one thousand four hundred four of the\ninsurance law and as a prudent person acting in a like capacity would\ninvest as provided in this subdivision shall not exceed fifty percent of\nsuch surplus funds.\n 3. Any of the surplus or reserve funds belonging to the state\ninsurance fund, upon like approval of the superintendent of financial\nservices, may be loaned on the pledge of any such securities. The\ncommissioners, upon like approval of the superintendent of financial\nservices, may also sell any of such securities or investments.\n 4. (a) Any securities belonging to the state insurance fund may, by\norder of the commissioners, approved by the superintendent of financial\nservices, be loaned under a security loan agreement, as defined in\nparagraph (b) of this subdivision, entered into with a registered\nbroker-dealer, or a New York state or national bank or trust company,\nwith the custodial bank of the state insurance fund or another person or\nentity, approved by the commissioner of taxation and finance, which\nspecializes in security loan transactions acting as the agent in\narranging such agreement. The commissioners shall monitor the market\nvalue of the loaned securities daily. In no event shall the\ncommissioners allow the value of the collateral posted to fall below t
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