§ 1315 — Trusteed assets of alien insurers

§ 1315. Trusteed assets of alien insurers. (a) Whenever a licensed\nalien insurer is required or permitted by this chapter to deposit assets\nwith a trustee or trustees for the security of its policyholders and\ncreditors in the United States, such assets shall be known as "trusteed\nassets". All trusteed assets shall be continuously kept within the\nUnited States and the trusteed assets of a licensed alien insurer\nentered through this state shall be continuously kept in this state.\nThe deed of trust and all amendments thereto shall be authenticated in\nsuch form and manner as the superintendent may prescribe and shall not\nbe effective unless approved by him. If he finds a deed of trust or its\namendments: (i) are sufficient in form and in conformity with law, (ii)\nthe trustee or trustees are eligible as such, and (iii) the deed of\ntrust is adequate to protect the interests of the beneficiaries of the\ntrust, he shall give his approval. If he finds, after reasonable notice\nto and hearing of the insurer, that the requisites for the approval no\nlonger exist, he may withdraw such approval.\n (b) The trustee or trustees of all trusts created after nineteen\nhundred thirty-nine shall be solvent banks or trust companies deemed by\nthe superintendent suitable for such purpose.\n (c) All trusts of trusteed assets existing before nineteen hundred\nforty shall be continued in accordance with the terms of the instruments\ncreating them, if not inconsistent with this section. If the trustees of\nany trust created before nineteen hundred forty are individuals, and\ntheir number is reduced to less than three, by death, resignation or\notherwise, the superintendent shall require substitution for such\ntrustees of one or more banks or trust companies deemed by him suitable\nfor such purpose. If the superintendent finds, after reasonable notice\nto and hearing of such alien insurer, that a deed of trust executed\nbefore nineteen hundred forty is inadequate to protect the interests of\nthe beneficiaries of such trust, he shall require the execution of a new\nor amended deed of trust in conformity with the requirements of this\nsection.\n (d) The superintendent may from time to time approve modifications of,\nor variations in, any deed of trust, which in his judgment are not\nprejudicial to the interests of the people of this state.\n (e) (1) Such deed of trust shall contain provisions which:\n (A) vest legal title to trusteed assets in the trustees, and their\nsuccessors lawfully appointed, in trust for the security of all\npolicyholders and creditors of the alien insurer within the United\nStates;\n (B) provide for substitution of a new trustee or trustees in case of a\nvacancy by death, resignation or otherwise, subject to approval of the\nsuperintendent;\n (C) require that all trusteed assets shall be at all times maintained\nas a trust fund separate and distinct from all other assets; and\n (D) require that the trustee or trustees shall continuously maintain a\nrecord at all times sufficient to identify the assets of such fund.\n (2) Such deed of trust may provide that income, earnings, dividends or\ninterest accumulations of the assets of such fund may be paid over to\nthe United States manager of such alien insurer, upon his or its\nrequest.\n (3) Such deed of trust shall provide, in substance, that no\nwithdrawals of assets, other than income as above specified, shall be\nmade or permitted by the trustee or trustees without the approval of the\nsuperintendent except to:\n (A) make deposits required by law in any state for the security or\nbenefit of all policyholders, or policyholders and creditors, of such\nalien insurer in the United States;\n (B) substitute other assets permitted by law and at least equal in\nvalue to those withdrawn, upon the specific written direction of the\nUnited States manager or an assistant United States manager when duly\nempowered and acting pursuant to either general or specific written\nauthority previously given or delegated by the board of directors; or\n (C) transfer such assets to an official liquidator or rehabilitator\npursuant to an order of a court of competent jurisdiction.\n (f) Upon withdrawal of trusteed assets deposited in another state in\nwhich such insurer is authorized to do business, it shall be sufficient\nif the deed of trust requires similar written approval of the insurance\nsupervising official of such state in lieu of approval of the\nsuperintendent. In all such cases the alien insurer shall notify the\nsuperintendent in writing of the nature and extent of such withdrawal.\n (g) The superintendent may from time to time: (i) make examinations of\nthe trusteed assets of any authorized alien insurer at the insurer's\nexpense and (ii) require the trustee or trustees to file a statement, in\nsuch form as he may prescribe, certifying the assets of such trust fund\nand the amounts thereof. Refusal or neglect of any trustee to comply\nwith the foregoing requirements shall be ground for the revocation of\nsuch insurer's license or the liquidation of its United States branch.\n (h) In the case of a Canadian life insurance company or a Canadian\nfraternal benefit society, the provisions of this section applicable to\na United States manager refer to the president, vice-president,\nsecretary or treasurer of the company at its home office in Canada or to\nany officer of the society elected by its supreme governing body, when\nduly empowered and authorized for such purpose.\n