§ 501. Restrictions on officers and employees of the department;
penalty. (a) No officer or employee of the department shall obtain a
loan or extension of credit from any regulated person or be interested
in any such regulated person as a director, partner, owner, officer,
attorney, agent, trustee or employee, or own or deal in, either directly
or indirectly, the stocks or obligations of any such regulated person. A
violation of the provisions of this section by any officer or employee
shall constitute sufficient grounds for his or her removal by the
superintendent.

(b) Nothing in this section shall be construed to prohibit any officer
or employee from obtaining financing from a regulated person upon his or
her primary or secondary residence, provided that the premises securing
such loan are occupied by such employee, and further provided that such
loan is reported to the department, which shall keep a record thereof.
The term "residence," for the purposes of this section, shall mean a
single family or two family residence, condominium apartment or
cooperative apartment, occupied in whole or in part, by the officer or
employee. The term "cooperative apartment" means a residence where
ownership is evidenced by certificates of stock or other evidence of an
ownership interest in, and a proprietary lease from, a corporation or
partnership formed for the purpose of the cooperative ownership of real
estate.

(c) Nothing in this section shall be construed to prohibit any officer
or employee from: (1) obtaining a loan secured by an assignment of his
or her deposit in a banking organization, or an assignment or pledge of
his or her shares in a savings and loan association or credit union; (2)
accepting financing of an automobile, truck or other personal property
from a banking organization or a sales finance company; (3) entering
into a premium finance agreement with a premium finance agency; or (4)
owning shares of an investment company (mutual fund) that may
incidentally invest in the securities of any regulated person, provided
that the purpose of the investment portfolio of such investment company
may not be to invest primarily or exclusively in the securities of
banking or insurance entities. For purposes of this section, investment
companies include open-end and closed-end investment companies and unit
investment trusts as those terms are defined in an Act of Congress
entitled "The Investment Company Act of 1940," as amended.

(d) Nothing in this section shall be construed to prevent any officer
or employee from becoming a policyholder of any insurer or from taking
out a loan under the officer's or employee's insurance policy, or
prevent or impair the ability of the superintendent to act as a
liquidator, rehabilitator, or conservator pursuant to article
seventy-four of the insurance law or article thirteen of the banking
law.

(e) The superintendent may promulgate policies and procedures for
exempting particular employees, or classes of employees, from investment
restrictions in subsection (a) of this section as to regulated persons
with which such employee or class of employees has no authority or
involvement.

(f) This section shall not apply to investments held in a blind trust
approved by the superintendent or the superintendent's designee.