Section 350. Loans

a. The following may borrow from the policemen's and
  firemen's retirement system:
    1. Any member in government service or on leave  of  absence  who  has
  credit for at least one year of member service, provided the comptroller
  shall  approve  such  loan. The total of any such loans shall not exceed
  seventy-five per centum of his accumulated contributions.
    2. Any member absent on military  duty,  as  defined  in  section  two
  hundred  forty-three  of  the military law. The amount of any such loan,
  however, shall not exceed the total of  his  accumulated  contributions,
  less  one  dollar.  Such  nominal sum of one dollar shall be left in the
  annuity savings fund  to  his  credit  as  a  token  of  his  continuing
  membership. Any member who:
    (a)  While  absent  on  such military duty and prior to October first,
  nineteen hundred forty-six, withdrew his accumulated contributions, and
    (b) Re-entered into government  service  within  one  year  after  the
  termination  of  such  military  duty,  may  redeposit  and  repay  such
  withdrawn amount, with interest thereon at the rate of  six  per  centum
  per  annum  to October first, nineteen hundred forty-six, and thereafter
  at the general rate or rates fixed by the comptroller pursuant  to  this
  section. In such event such member shall be entitled to the same status,
  rights and privileges as if he had left the nominal sum of one dollar in
  the annuity savings fund as a token of his continuing membership.
    b. Repayment of loans.
    1.  An  amount  so  borrowed,  together  with  interest  on any unpaid
  balances thereof, shall be repaid in equal installments which  shall  be
  deducted  from  the member's compensation. Such additional contributions
  shall be in such amount as the comptroller shall  approve.  They  shall,
  however,  be  at  least equal to the member's normal contribution to the
  policemen's and firemen's retirement system, or ten dollars  per  month,
  whichever is lower.
    2.  In  the  case of repayment by a member on leave of absence without
  pay, however, any such loan shall be  repaid  in  such  installments  of
  principal and interest as the comptroller shall determine.
    c.  The  comptroller,  at  any  time, while the borrowing member is in
  government service or on leave of absence therefrom, may accept payments
  on account of any  loan  in  addition  to  the  installments  fixed  for
  repayment thereof.
    d.  The  rate  of  interest payable upon loans made under this section
  shall be fixed by the comptroller. He shall have  power,  from  time  to
  time  and  at  any  time, to decrease such rate to not less than regular
  interest or to increase the same to not  more  than  six  percentum  per
  annum.  Any  such  decrease  or increase shall apply, from the effective
  date thereof, to unpaid balances or loans outstanding on such  date  and
  to  new  loans made thereafter. The comptroller shall adjust any prepaid
  and unearned interest  on  balances  of  loans  outstanding  as  of  the
  effective date of a change in the interest rate.
    e. The borrowing member's annuity savings account shall not be reduced
  by  the  loan  obtained  but  a  subsidiary  record  shall be maintained
  reflecting the  outstanding  balance  on  such  loan,  as  well  as  the
  allocation of the payroll deductions to principal and interest. Upon the
  member's  withdrawal of his accumulated contributions or retirement, the
  balance due on his loan shall be deducted from the amount to his  credit
  at  such  time in the annuity savings fund. Upon the death of the member
  prior to the loan being fully insured, that  portion  thereof  which  is
  uninsured,  shall similarly be deducted from the amount to his credit at
  the time of his death in the annuity savings fund.
    f. In the case of any benefit wherein the amount of  pension  will  be
  determined,  in  part,  by  the amount of annuity, such annuity shall be

  computed upon the basis of accumulated contributions as if there were no
  loan or no additional contributions. The resulting retirement  allowance
  shall  then  be reduced by the actuarial equivalent of the present value
  of any outstanding loan.
    g.  Insurance  of loans. Each loan made pursuant to this section shall
  be insured against the death of the  member.  Such  insurance  shall  be
  provided  by  the  comptroller  through  the  policemen's  and firemen's
  retirement system upon the following basis:
    1. Amount of insurance. Each loan made pursuant to this section  shall
  be  insurable in its entirety and shall be insured thirty days after the
  making thereof.
    2. Premiums. In March of each year, premiums at the  rate  established
  by  the  directive of the comptroller, in effect during such year, shall
  be charged to  the  member's  annuity  savings  account.  In  pro-rating
  premiums,  the  major  part  of  a  month shall be considered as a whole
  month. If the member during this  period  withdraws  his  contributions,
  dies  or  retires,  the  premium  to  be  charged  at  the  time of such
  withdrawal, death or retirement shall be based on the number  of  months
  which had elapsed since the beginning of the fiscal year.
    3.  Loans heretofore made. Each loan made pursuant to law prior to the
  effective date of this section shall be insured from that date upon  the
  terms  and  conditions  set  forth  in  this section, as hereby amended.
  Premiums after such date  shall  be  deducted  in  accordance  with  the
  provisions of this section.
    4. Funds. The comptroller is authorized to establish such funds as may
  be necessary to carry out the provisions of this subdivision g.
    5.  Power  of comptroller.   The comptroller, in his discretion and at
  the end of any fiscal year, may increase or reduce the  premium;  modify
  the  terms  and  conditions  of coverage or discontinue the insurance of
  loans.
    6. Continuity of insurance not obligatory.  This subdivision  g  shall
  not  impose any obligation whatsoever upon the policemen's and firemen's
  retirement system or any employer to continue to insure loans of members
  upon the terms and conditions herein provided or upon  any  other  terms
  and conditions.
    h.  Loans  made  to  certain policemen and firemen.  Each loan made to
  policemen and firemen while such  persons  were  members  of  the  state
  employees' retirement system shall be repaid according to the provisions
  of subdivision b of this section.