§ 1314 — Deposits; custody, beneficiaries, exchanges, inspection and income

§ 1314. Deposits; custody, beneficiaries, exchanges, inspection and\nincome. (a) (1) The superintendent shall be the official custodian of\nall deposits of securities required or authorized by the provisions of\nthis chapter, unless otherwise specifically provided by law. He shall\nkeep the same in a safe place provided by the state or in custody for\nhis account with a bank, trust company or national bank in this state\nwhich may be designated by the depositing insurer, subject to the\napproval of the superintendent.\n (2) All such securities shall be held by the superintendent, in trust,\nwithout preference or priority to any beneficiary entitled to share\ntherein, for the security of the depositing insurer's policyholders\nwithin the United States, its territories and possessions, except that\nsecurities deposited by an alien insurer shall be held in trust for the\nsecurity of the policyholders and creditors of the depositing insurer\nwithin the United States, its territories and possessions.\n (3) Such securities may be registered in the name of the\nsuperintendent as such trustee or, at the option of the depositing\ninsurer, may be in bearer form.\n (4) "Policyholders" as used in this chapter in any provision relating\nto beneficiaries of deposits includes all persons having a legal or\nequitable right against the depositing insurer or the insured arising\nout of an insurance or annuity contract. "Depositing insurer" as used in\nthis chapter includes any lawful successor in interest to such insurer.\n (b) The depositing insurer shall not assign or otherwise transfer all\nor any part of its interest in any such deposit, without the approval of\nthe superintendent, and any such transfer, whether voluntary or by\noperation of law, without such approval, shall be void. The\nsuperintendent may approve transfer of all of the depositing insurer's\nresiduary interest in such deposit if with his approval the transferee\nassumes all liabilities of the transferor to the beneficiaries of such\ndeposit.\n (c) No judgment creditor or other claimant may levy upon any deposit\nor part thereof. Upon the making of an order by a court of competent\njurisdiction for the liquidation, rehabilitation or conservation of any\ndepositing insurer, the deposit and the income therefrom shall be\ntransferred to the superintendent as liquidator, rehabilitator or\nconservator.\n (d) All deposits of securities held by the superintendent which were\nmade pursuant to any prior insurance law shall be deemed to be held in\ncompliance with the provisions of this chapter, for the purposes for\nwhich such deposits were originally made.\n (e) The depositing insurer may from time to time exchange for any\ndeposited securities other securities eligible under the provisions of\nthis chapter if in the opinion of the superintendent the aggregate value\nof such deposit will not be thereby reduced below the amount required by\nlaw.\n (f) So long as the depositing insurer shall continue solvent and shall\ncomply with the laws of this state applicable to it, the superintendent\nshall permit it to collect and dispose of the income on deposited\nsecurities.\n (g) (1) No exchange, release or other transfer of deposited\nsecurities, or any interest therein, shall be valid unless: (i)\ncountersigned by a member of the state tax commission or a person\ndesignated for such purpose by such commission, and (ii) requested by\nthe depositing insurer. Except for a transfer for redemption or\nrefunding, the depositing insurer's request must be evidenced in such\nmanner as the superintendent requires.\n (2) The department of taxation and finance and the department of\nfinancial services shall each keep a book with entries showing the name\nof the insurer for whose account such transfer is made by the\nsuperintendent, the name of the transferee unless made in blank, and the\npar value of the securities transferred.\n (3) Within five days after countersigning and entering the same, the\ncommissioner of taxation and finance shall advise by mail the insurer\nfrom whose account such transfer is made, of the kind and amount of\nsecurity transferred.\n (h) Every depositing insurer shall, at least once during each calendar\nyear, cause such securities to be examined by some person duly\nauthorized in writing. Such person shall, at the request of the\nsuperintendent, execute a certificate stating the result of such\nexamination.\n