Section 1705. Quantitative limitations

* (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 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.