(b) No such corporation shall invest in any securities other than those permitted by the provisions of paragraph two of subsection (a) of section one thousand four hundred three of this chapter, except as provided in paragraphs one and two of this subsection.

1. (1) A corporation (or two or more such corporations under common management) with admitted assets of greater than eighty million dollars and maintaining cash and reserve investments under subsection (a) of section one thousand four hundred four of this chapter (except paragraphs eight and ten of subsection (a) of such section) free from any lien or pledge, which, when valued in accordance with the provisions of this chapter, seven percent or more of net premium income for the most recent twelve month period, as shown by its last sworn statement, annual or quarterly, on file with the superintendent, may also invest its funds or otherwise acquire or loan upon investments permitted under paragraphs eight and ten of subsection (a) of section one thousand four hundred four of this chapter without having to meet the otherwise applicable qualitative standards and the otherwise applicable aggregate limitation for such investments, provided that the aggregate amount of all such investments shall not exceed the lesser of surplus to policyholders or fifteen percent of its admitted assets as shown by its last statement on file with the superintendent. Any corporation subject to the provisions of this article may jointly exercise control of a subsidiary by acting together with one or more other corporations, provided that such other corporations are either corporations subject to this article, foreign corporations which perform similar functions in other states or which belong to a national association comprised of similar corporations to which one or more corporations organized under this article also belong, or an institution controlled by any such foreign corporation. No such corporation shall hold a direct or indirect ownership interest in a risk retention group, as defined in article fifty-nine of this chapter, other than in a risk retention group all of whose members are insurance companies. Notwithstanding any other provision of this chapter, including, but not limited to, section one thousand four hundred seven of this chapter, any corporation subject to the provisions of this article may also invest, in the aggregate, not more than three percent of its admitted assets in obligations, shares or other securities (including certificates of deposit) issued by a parent corporation which is organized as a not for profit entity or a corporation which is an affiliate or will be an affiliate after direct or indirect acquisition by the parent corporation; provided, however, that the board of directors of the parent organization is constituted in accordance with the requirements of subsection (k) of section four thousand three hundred one of this article and, provided further however, that the investments of the corporation organized under this article in its own subsidiaries shall not be included in that limitation.
2. (2) A corporation maintaining cash and reserve investments under subsection (a) of section one thousand four hundred four of this chapter (except paragraphs eight and ten of subsection (a) of such section), free from any lien or pledge, which, when valued in accordance with the provisions of this chapter, equal ten percent or more of net premium income for the most recent twelve month period, as shown by such corporation's last sworn statement, annual or quarterly, on file with the superintendent, may, in addition to the investments permitted by paragraph one of this subsection, invest up to fifteen percent of its admitted assets in investments permitted under paragraph two of subsection (a) of section one thousand four hundred four of this chapter, provided however that such investments need not meet the otherwise applicable qualitative standards of such paragraph two so long as all such investments are rated at BBB or higher (or the equivalent thereto) by a security rating agency recognized by the superintendent.

(d) Every such corporation shall maintain a reserve, to be designated as the statutory reserve fund, which shall from time to time during each calendar year be increased in an amount equal to at least one per centum of the net premium income of such corporation during such whole calendar year, provided however, that:

1. (1) if such corporation reinsures part of its risk under any or all of its contracts by means of reinsurance approved by the superintendent as an appropriate substitute for the statutory reserve fund, then the required increase to the statutory reserve fund at the end of any calendar year shall be reduced by the amount of the premium paid by such corporation for such reinsurance during such calendar year or by one per centum of the net premium income received by such corporation during such calendar year on its contracts so reinsured for the period during which they are so reinsured, whichever amount is the lesser;
2. (2) the statutory reserve fund at the end of any calendar year shall not exceed twelve and one-half per centum of the net premium income of such calendar year;
3. (3) every such corporation shall, after the first full calendar year of doing business, accumulate and maintain a statutory reserve fund which shall from time to time during each calendar year be increased in an amount equal to at least five per centum of the net premium income of such corporation during such whole calendar year until such reserve shall be at least equal to fifty thousand dollars and thereafter such reserve shall be accumulated and maintained in the manner prescribed.

(e)

1. (1) Such statutory reserve fund may, after application therefor by the corporation and approval thereof by the superintendent, be reduced below the amount required to be maintained by subsection (d) hereof, provided that no such reduction, except in the event of an epidemic or other catastrophe resulting in extraordinary hospital or medical utilization, shall, in the case of a corporation having a net premium income for the preceding calendar year of (i) less than ten million dollars or (ii) ten million dollars or more, reduce the statutory reserve below an amount equal to seventy-five per centum and fifty per centum, respectively, of the amount required to be maintained by subsection (d) hereof. Any reduction so authorized by the superintendent shall be restored within a period of not more than three years, or six years in the case of a corporation with a combined premium volume exceeding two billion dollars annually as of December thirty-first, nineteen hundred ninety-six, in accordance with a plan submitted by the corporation and approved by the superintendent which shall provide that such restoration shall be in addition to, and not in lieu of, the increase in the statutory reserve fund hereinabove required, which increase must be made in every year except the year in which a reduction in the statutory reserve fund is authorized by the superintendent.
2. (2) Any six year plan submitted by a corporation with a combined premium volume exceeding two billion dollars annually as of December thirty-first, nineteen hundred ninety-six shall also be submitted to the special advisory review panel created pursuant to section four thousand three hundred nineteen of this chapter. Within sixty days of its receipt of the six year plan, such panel shall issue a report to the superintendent analyzing the six year plan and recommending any changes it deems appropriate. The superintendent shall hold public hearings regarding any such proposed six year plan and the recommendations of the panel. The superintendent shall consider the findings of the panel and the public hearings held on the six year plan during his approval process for the six year plan.