§ 1408. Acquisition of insurance company shares; limitations thereon.
(a) Any insurer which makes investments under the authority of
subsection (c) of section one thousand four hundred three of this
article and which meets the requirements of such subsection and section
one thousand four hundred two of this article, may invest in, or
otherwise acquire, the shares, including voting trust certificates,
certificates of deposit, interim receipts and other similar instruments
representing such shares, of any other insurance companies, including
for purposes of this section any corporation having a majority of its
assets invested in one or more insurance companies, in an amount which,
together with its present holdings and with any indirect or
proportionate interest in insurance company shares held by it through
any intermediate subsidiary, shall not exceed in value thirty-five
percent of the surplus to policyholders of such acquiring insurer, or
fifty percent of its surplus over and above its liabilities and capital,
whichever is greater. No United States branch of an alien insurer shall
be permitted to acquire or hold any shares of any alien insurance
corporation.

(b) This section shall not prohibit the acquisition of insurance
company shares by the acceptance of a stock dividend nor prohibit the
owner of previously lawfully acquired shares of an insurance company
from making a contribution, with the approval of the superintendent, to
such other insurance company's surplus. Notwithstanding any other
provisions of this chapter, any domestic insurer or United States branch
of an alien insurer, which, prior to January first, nineteen hundred
forty, acquired shares of other insurance companies in accordance with
law in force at the time of such acquisition, may continue to hold them.
In determining the financial condition of a domestic insurer shares of
other insurance companies shall be valued in accordance with subsection
(c) of section one thousand four hundred fourteen of this article but in
no event shall their aggregate value be allowed as an admitted asset in
excess of fifty per centum of the surplus to policyholders or sixty per
centum of the surplus of such insurer, whichever is greater.

(c) In applying the formulas of this section, the initial calculation
of surplus shall include voluntary reserves not required by law and the
value of insurance company shares before adjustment for any excess
holdings thereof.

(d) A United States branch of an alien insurer, other than one
licensed to do in this state the business of life insurance, shall be
subject to the foregoing limitations, except that its trusteed surplus
statement shall be used in determining compliance. For the purpose of
this section the surplus to policyholders of a United States branch
shall be deemed to be its trusteed surplus and its surplus shall be
deemed to be its trusteed surplus less an amount equal to the
paid-in-capital specified in table one of paragraph one of subsection
(a) of section four thousand one hundred three of this chapter for a
domestic stock property/casualty insurance company licensed to do the
same kinds of insurance except as such amount may be modified by
paragraph five of subsection (a) of section four thousand one hundred
three of this chapter.