Md. Code Regs. 31.04.09.02

Current through Register Vol. 51, No. 22, November 1, 2024

Section 31.04.09.02 - Custody Agreement; Filing with Commissioner

A. Custody Agreement.

(1) A carrier may not register securities in the name of a nominee or deposit securities with a custodian unless the carrier provides for the custody of the securities by entering into a written agreement with the custodian that:

(a) Is filed with the Commissioner pursuant to §B of this regulation; and

(b) Complies with Regulation .03 of this chapter.

(2) The agreement shall be:

(a) In writing; and

(b) Authorized by a resolution of the board of directors of the carrier or of an authorized committee of the board.

(3) The securities may be held:

(a) By the custodian or its agent; or

(b) In a clearing corporation.

B. Filing Agreement with the Commissioner.

(1) A carrier that enters into a written agreement with a custodian shall file the agreement with the Commissioner within 30 days after the execution of the agreement.

(2) If the Commissioner determines that a written agreement filed after execution does not comply with the requirements in Regulation .03 of this chapter, the carrier shall cure the noncompliance within:

(a) 60 days after notification by the Commissioner; or

(b) An extended cure period authorized by the Commissioner.

(3) If the written agreement is not cured within the time allowed by the Commissioner, the Commissioner may:

(a) Take any action authorized by Insurance Article, § 4-113, Annotated Code of Maryland; or

(b) Require the carrier to report the securities held by the custodian in accordance with the terms of the noncompliant custody agreement as "Assets-Not Admitted".

Md. Code Regs. 31.04.09.02

Regulations .02, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .02, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)
Regulations .01 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Regulation .02A amended as an emergency provision effective August 11, 2004 (31:18 Md. R. 1349); amended permanently effective November 8, 2004 (31:22 Md. R. 1598)