N.J. Admin. Code § 3:12-4.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 3:12-4.1 - Minimum fidelity insurance coverage

(a) A qualified corporation shall obtain a bankers or stockbrokers blanket bond which covers:

1. Each director who handles or has charge or custody of money, securities or other valuable property of the corporation; and

2. All officers and employees of the corporation.

(b) The bond shall contain a provision that it shall not be cancellable for any cause unless notice of intention to cancel is filed in the Department at least five days prior to the day upon which cancellation shall take effect.

(c) The bond shall provide for limits of liability for Clause A, dishonest or fraudulent acts, in accordance with the minimum amounts set forth in the following Schedule A. For the first $ 5 million of prescribed primary Clause A coverage, the limits of liability for Clause E, securities forgery, shall not be less than 25 per cent of the minimum amounts of primary coverage prescribed in Schedule A or $ 250,000 whichever is less. For each additional $ 1 million of prescribed primary coverage required, the limits of liability for Clause E shall be increased $ 150,000 up to a maximum of $ 1 million. However, a stock transfer agent errors and omissions insurance policy of equal dollar value coverage may be substituted for a Clause E insuring agreement:

SCHEDULE "A"

Total number of Shareholders serviced
	Insurance Amounts to be Maintained in Thousands
	Market value of one share of the highest priced stock serviced as a transfer agent.
	$ 0.00	2.01	4.01	6.01	8.01	10.01	15.01
	2.00	4.00	6.00	8.00	10.00	15.00	20.00
0- 2000	100	150	200	250	300	350	400
2001- 4000	150	200	250	300	350	400	450
4001- 6000	200	250	300	350	400	450	500
6001- 8000	250	300	350	400	450	500	550
8001-10000	300	350	400	450	500	550	600
10001-15000	350	400	450	500	550	600	650
15001-20000	400	450	500	550	600	650	700

(d) For volume and market values in excess of table add $ 100,000 to insurance amount maintained for each additional 10,000 shareholders and add $ 100,000 to insurance amounts maintained for each $ 10.00 market value increment, up to a maximum of $ 10 million.

N.J. Admin. Code § 3:12-4.1

Amended by R.1992 d.242, effective 6/15/1992.
See: 24 New Jersey Register 675(b), 24 New Jersey Register 2242(b).
Revised (a).
Amended by R.1997 d.300, effective 7/21/1997.
See: 29 New Jersey Register 1583(a), 29 New Jersey Register 3241(a).