A New York insurer can buy financial guaranty insurance to back its commercial mortgage-backed securities, but New York will look mainly at ratings when deciding whether the CMBS can be used to invest reserves.
Officials in the general counsel’s office at the New York State Insurance Department come to that conclusion in Office of the General Counsel Opinion Number 09-10-04.
New York department officials address 3 questions in the opinion:
1. Would an insurance company (the “Company”) violate the New York Insurance Law if it were to obtain financial guaranty or portfolio insurance from an alien non-authorized insurer (“Guarantor”) on certain CMBS held in the Company’s general account?