§ 695-D — Powers of the comptroller

§ 695-d. Powers of the comptroller. 1. The comptroller may implement\nthe program through use of financial organizations as account\ndepositories and managers. Under the program, individuals may establish\naccounts directly with an account depository.\n 2. The comptroller may solicit proposals from financial organizations\nto act as depositories and managers of the program. Financial\norganizations submitting proposals shall describe the investment\ninstrument which will be held in accounts. The comptroller shall select\nas program depositories and managers the financial organization, from\namong the bidding financial organizations that demonstrates the most\nadvantageous combination, both to potential program participants and\nthis state, of the following factors:\n a. Financial stability and integrity of the financial organization;\n b. The safety of the investment instrument being offered;\n c. The ability of the investment instrument to track increasing costs\nof higher education;\n d. The ability of the financial organization to satisfy recordkeeping\nand reporting requirements;\n e. The financial organization's plan for promoting the program and the\ninvestment it is willing to make to promote the program;\n f. The fees, if any, proposed to be charged to persons for opening\naccounts;\n g. The minimum initial deposit and minimum contributions that the\nfinancial organization will require;\n h. The ability of banking organizations to accept electronic\nwithdrawals, including payroll deduction plans; and\n i. Other benefits to the state or its residents included in the\nproposal, including fees payable to the state to cover expenses of\noperation of the program.\n 3. The comptroller may enter into a contract with a financial\norganization. Such financial organization management may provide one or\nmore types of investment instrument.\n 4. The comptroller may select more than one financial organization for\nthe program.\n 5. A management contract shall include, at a minimum, terms requiring\nthe financial organization to:\n a. Take any action required to keep the program in compliance with\nrequirements of section six hundred ninety-five-e of this article and\nany actions not contrary to its contract to manage the program to\nqualify as a "qualified state tuition plan" under section 529 of the\nInternal Revenue Code of 1986, as amended;\n b. Keep adequate records of each account, keep each account segregated\nfrom each other account, and provide the comptroller with the\ninformation necessary to prepare the statements required by section six\nhundred ninety-five-e of this article;\n c. Compile and total information contained in statements required to\nbe prepared under section six hundred ninety-five-e of this article and\nprovide such compilations to the comptroller;\n d. If there is more than one program manager, provide the comptroller\nwith such information necessary to determine compliance with section six\nhundred ninety-five-e of this article;\n e. Provide the comptroller or his designee access to the books and\nrecords of the program manager to the extent needed to determine\ncompliance with the contract;\n f. Hold all accounts for the benefit of the account owner;\n g. Be audited at least annually by a firm of certified public\naccountants selected by the program manager and that the results of such\naudit be provided to the comptroller;\n h. Provide the comptroller with copies of all regulatory filings and\nreports made by it during the term of the management contract or while\nit is holding any accounts, other than confidential filings or reports\nthat will not become part of the program. The program manager shall make\navailable for review by the comptroller the results of any periodic\nexamination of such manager by any state or federal banking, insurance,\nor securities commission, except to the extent that such report or\nreports may not be disclosed under applicable law or the rules of such\ncommission; and\n i. Ensure that any description of the program, whether in writing or\nthrough the use of any media, is consistent with the marketing plan\ndeveloped in the memorandum of understanding pursuant to the provisions\nof section six hundred ninety-five-c of this article.\n 6. The comptroller may provide that an audit shall be conducted of the\noperations and financial position of the program depository and manager\nat any time if the comptroller has any reason to be concerned about the\nfinancial position, the recordkeeping practices, or the status of\naccounts of such program depository and manager.\n 7. During the term of any contract with a program manager, the\ncomptroller shall conduct an examination of such manager and its\nhandling of accounts. Such examination shall be conducted at least\nbiennially if such manager is not otherwise subject to periodic\nexamination by the superintendent of financial services, the federal\ndeposit insurance corporation or other similar entity.\n 8. a. If selection of a financial organization as a program manager or\ndepository is not renewed, after the end of its term:\n (i) Accounts previously established and held in investment instruments\nat such financial organization may be terminated;\n (ii) Additional contributions may be made to such accounts;\n (iii) No new accounts may be placed with such financial organization;\nand\n (iv) Existing accounts held by such depository shall remain subject to\nall oversight and reporting requirements established by the comptroller.\n b. If the comptroller terminates a financial organization as a program\nmanager or depository, he or she shall take custody of accounts held by\nsuch financial organization and shall seek to promptly transfer such\naccounts to another financial organization that is selected as a program\nmanager or depository and into investment instruments as similar to the\noriginal instruments as possible.\n 9. The comptroller may enter into such contracts as it deems necessary\nand proper for the implementation of the program.\n