§ 87-a. Investment in obligations of the municipal assistance corporation for the city of New York; indemnification. 1. The state insurance fund, and all state officers with responsibility for the custody or investment thereof, are authorized and directed to take any and all actions necessary or appropriate to cause such fund to make purchases as soon as possible, in accordance with a schedule to be established by the New York state emergency financial control board, but in no event later than December first, nineteen hundred seventy-five, of bonds of the municipal assistance corporation for the city of New York in the aggregate principal amount of one hundred million dollars, provided, however, that at the date of any such purchase the city of New York has not defaulted in the payment of any of its outstanding bonds or notes. The terms and conditions of such bonds, including the rates of interest thereon, shall be determined by the municipal assistance corporation for the city of New York, after consultation with the commissioners of the fund, provided such terms and conditions are found to be fair and reasonable by the New York state emergency financial control board.

2. It is hereby found and declared that obligations of the municipal assistance corporation for the city of New York are reasonable, prudent, proper and legal investments for the state insurance fund or for any state officer with custody or responsibility for the investment of the assets thereof.

3. Notwithstanding any other provision of law, including the provisions of section seventeen of the public officers law, no state officer with custody or responsibility for the investment of the assets thereof shall incur or suffer any liability whatsoever to any person beneficially interested in such system by reason of actions taken pursuant to the authorization and direction of subdivision one and such fund shall save harmless and indemnify all such officers and any investment advisors from financial loss arising out of any claim, demand, suit, action or judgment for alleged negligence, waste or breach of fiduciary duty by reason of any investment of any monies of the state insurance fund in obligations of the municipal assistance corporation for the city of New York provided that such person shall, within five days after the date on which he is served with any summons, complaint, process, notice, demand, claim or pleading, deliver the original or a true copy thereof to the legal advisor of such system. Upon such delivery the legal advisor of the state insurance fund may assume control of the representation of such person in connection with such claim, demand, suit, action or proceeding. Such person shall cooperate fully with the legal advisor of the system or any other person designated to assume such defense in respect of such representation or defense.

4. In order to obtain the funds necessary to purchase the bonds required by this chapter, the commissioners of the state insurance fund in accordance with rules and regulations adopted by such commissioners shall have the right to borrow an amount not exceeding the obligation incurred by such fund pursuant to this chapter and to pledge as collateral therefor such assets as they may deem advisable.