Rules and Regulations of the State of Georgia
 

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<xmp>.</xmp> <form name="form1" method="post" action="120-2-69?urlRedirected=yes&amp;data=admin&amp;lookingfor=120-2-69" id="form1"> <input type="hidden" name="__VIEWSTATE" id="__VIEWSTATE" value="/wEPDwUKLTY5ODkwOTM2Nw8WAh4Ec3BhbQIMFgJmD2QWAgIFDw8WAh4EVGV4dAUFNiArIDZkZGSAfMO0AAIVu8rE4DtvGkEQG+fnPg==" /> <input type="hidden" name="__VIEWSTATEGENERATOR" id="__VIEWSTATEGENERATOR" value="EEBB6393" /> <input type="hidden" name="__EVENTVALIDATION" id="__EVENTVALIDATION" value="/wEWCALhlarQAwLniKOhBALV5cpNAoa5iIEFAoznisYGAsrv5u0MAsrv4u0MAsrv3u0MUpR542/l1r0xgz+9Db6OM8EHN/M=" /> <div class='popup'> <div class='cnt223'> <div style="margin-bottom:6px;"> <img alt="Rules and Regulations of the State of Georgia" src="/images/new.gif"/> </div> <div class="header"> Terms and Conditions of Agreement for Access to Rules and Regulations of the State of Georgia Website </div> <div class="scroll"> <p>(Note: certain features of this site have been disabled for the general public to prevent digital piracy. If you are an entitled government entity pursuant the Georgia Administrative Procedures Act, <a target="_new" href="http://links.casemakerlegal.com/states/GA/books/Code_of_Georgia/browse?ci=25id=gasos&amp;codesec=50-13-7&amp;title=50&amp;#50-13-7(d)">O.C.G.A.§ 50-13-7(d)</a> contact the State of Georgia's Administrative Procedures Division at 678-364-3785 to enable these features for your location.)</p> <p>To access this website, you must agree to the following: </p> <p> These terms of use are a contract between you and/or your employer (if any), and Lawriter, LLC. </p> <p> You agree that you will not copy, print, or download anything from this website for any commercial use. </p> <p> You agree not to use any web crawler, scraper, or other robot or automated program or device to obtain data from the website.</p> <p> You agree that you will not sell, will not license, and will not otherwise make available in exchange for anything of value, anything that you download, print, or copy from this site.</p> <p> You agree that you will not copy, print, or download any portion of the regulations posted on this site exceeding a single chapter of regulations for sale, license, or other transfer to a third party, except that you may quote a reasonable portion of the regulations in the course of rendering professional advice.</p> <p> If you violate this agreement, or if you access or use this website in violation of this agreement, you agree that Lawriter will suffer damages of at least $20,000. </p> <p> THIS WEBSITE AND ITS CONTENT ARE PROVIDED "AS IS." 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If you are an entitled government entity pursuant the Georgia Administrative Procedures Act, <a target="_new" href="http://links.casemakerlegal.com/states/GA/books/Code_of_Georgia/browse?ci=25id=gasos&amp;codesec=50-13-7&amp;title=50&amp;#50-13-7(d)">O.C.G.A.§ 50-13-7(d)</a> contact the State of Georgia's Administrative Procedures Division at 678-364-3785 to enable these features for your location.)</p> <p>To access this website, you must agree to the following: </p> <p> These terms of use are a contract between you and/or your employer (if any), and Lawriter, LLC. </p> <p> You agree not to use any web crawler, scraper, or other robot or automated program or device to obtain data from the website. </p> <p> You agree that you will not sell or license anything that you download, print, or copy from this website.</p> <p> THIS WEBSITE AND ITS CONTENT ARE PROVIDED "AS IS." 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href="../help.aspx#searching" target="_blank"><em class="mnemonic">S</em>earch tips</a></div><ul class="breadcrumb"> <li><a href="/GAC" name="GAC" title="GAC">GA R&amp;R</a></li> <li>&raquo; <a href="/GAC/120" title="120">Department 120</a></li> <li>&raquo; <a href="/GAC/120-2" title="120-2">Chapter 120-2</a></li> <li>&raquo; Subject 120-2-69</li> </ul> </div> </div><div id="doc" class="container"> <div id="doc-content" class="content"> <h1><nllsubject>Subject 120-2-69 REQUIREMENTS FOR INSURANCE COMPANY CUSTODIAL ACCOUNTS</nllsubject></h1> <h2><a href="/GAC/120-2-69-.01" name="120-2-69-.01" title="120-2-69-.01">Rule 120-2-69-.01 Purpose</a></h2> <P>The purpose of this Regulation Chapter is to set forth guidelines for certificated and uncertificated securities eligible for investment as set forth in O.C.G.A. § <a href="https://links.casemakerlegal.com/states/ga/books/Code_of_Georgia/browse?ci=25&amp;id=gasos&amp;codesec=33-11-2&amp;title=33#" target="_newtab">33-11-2</a> for domestic insurers and O.C.G.A § <a href="https://links.casemakerlegal.com/states/ga/books/Code_of_Georgia/browse?ci=25&amp;id=gasos&amp;codesec=33-11-42&amp;title=33#" target="_newtab">33-11-42</a> for foreign insurers and to enable domestic insurers to comply with O.C.G.A. § <a href="https://links.casemakerlegal.com/states/ga/books/Code_of_Georgia/browse?ci=25&amp;id=gasos&amp;codesec=33-14-13&amp;title=33#" target="_newtab">33-14-13</a>.</P> <h2><a href="/GAC/120-2-69-.02" name="120-2-69-.02" title="120-2-69-.02">Rule 120-2-69-.02 Definitions</a></h2> <P>When used in this regulation, the term:</P> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(a)">(a)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Agent" shall mean a national bank, state bank or trust company that maintains an account in its name in a clearing corporation or that is a member of the Federal Reserve System and through which a custodian participates in a clearing corporation or the Federal Reserve book-entry system, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "agent" may include a corporation which is organized or existing under the laws of a foreign country and which is legally qualified under those laws to accept custody of securities;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(b)">(b)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Clearing corporation" shall mean a corporation as defined in Section 8-102(3) of the Uniform Commercial Code that is organized for the purpose of effecting transactions in securities by computerized book-entry, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet deposit requirements pursuant to the laws of a foreign country as a condition for doing business therein, "clearing corporation" may include a corporation that is organized or existing under the laws of any foreign country and which is legally qualified under such laws to effect transactions in securities by computerized book-entry;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(c)">(c)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Commissioner" shall mean the Insurance Commissioner of the State of Georgia;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(d)">(d)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Custodian" shall mean a national bank, state bank or trust company that shall at all times during which it acts as a custodian pursuant to this regulation be no less than adequately capitalized as determined by the standards adopted by United States banking regulators and that is regulated by either state banking laws or is a member of the Federal Reserve System and that is legally qualified to accept custody of securities in accordance with the standards set forth below, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country, or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "custodian" may include a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof which shall at all times during which it acts as a custodian pursuant to this Regulation Chapter be no less than adequately capitalized as determined by the standards adopted by international banking authorities and that is legally qualified to accept custody of securities. Such definitions also shall apply to subcustodians selected by the custodian and disclosed to and approved by the principal;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(e)">(e)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Federal Reserve book-entry system" shall mean the computerized systems sponsored by the United States Department of the Treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and the agencies and instrumentalities, respectively, in Federal Reserve Banks through banks which are members of the Federal Reserve System or which otherwise have access to such computerized systems;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.02(f)">(f)</a></td> <td valign="top" style="text-align:left" class="leftalign"> "Securities" shall mean certificated securities and uncertificated securities as defined in Section 8-102(1)(a) and (b) of the Uniform Commercial Code.</td> </tr> </table> <h2><a href="/GAC/120-2-69-.03" name="120-2-69-.03" title="120-2-69-.03">Rule 120-2-69-.03 Custody Agreements; Requirements</a></h2> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(1)">(1)</a></td> <td valign="top" style="text-align:left" class="leftalign"> An insurance company may, by written agreement with a custodian, provide for the custody of its securities with a custodian. The securities may be held by the custodian or its agent or in a clearing corporation or in the Federal Reserve book-entry system. Securities so held, whether held by the custodian or its agent or in a clearing corporation or in the Federal Reserve book-entry system, are referred to herein as "custodied securities."</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)">(2)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The agreement shall be in writing and shall be authorized by a resolution of the board of directors of the insurance company or of an authorized committee thereof The terms of the agreement shall comply with the following: <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(a)">(a)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Certificated securities held by the custodian shall be held either separate from the securities of the custodian and all of its other customers or in a fungible bulk of securities as part of a Filing of Securities by Issue (FOSBI) arrangement;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(b)">(b)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Securities held in fungible bulk by the custodian and securities in a clearing corporation or in the Federal Reserve book-entry system shall be separately identified on the custodian's official records as being owned by the insurance company. The records shall identify which custodied securities are held by the custodian or by its agent and which securities are in a clearing corporation or in the Federal Reserve book-entry system. If the securities are in a clearing corporation or in the Federal Reserve book-entry system, the records shall also identify where the securities are and if in a clearing corporation, the name of the clearing corporation and if through an agent, the name of the agent;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(c)">(c)</a></td> <td valign="top" style="text-align:left" class="leftalign"> All custodied securities that are registered shall be registered in the name of the company or in the name of a nominee of the company or in the name of the custodian or its nominee or, if in a clearing corporation, in the name of the clearing corporation or its nominee;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(d)">(d)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodied securities shall be held subject to the instructions of the insurance company and shall be withdrawable upon the demand of the insurance company, except that custodied securities used to meet the deposit requirements set forth in Chapter 12 of the Georgia Insurance Code shall, to the extent required by that section, be under the control of the Georgia Insurance Department and shall not be withdrawn by the insurance company without the express written approval of the Georgia Insurance Department. Nothing in this section, however, shall prohibit an insurance company from effecting a valid substitution of securities to maintain compliance with Chapter 12 of the Georgia Insurance Code;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(e)">(e)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The custodian shall be required to send or cause or make available to the insurance company a confirmation of all transfers of custodied securities to or from the account of the insurance company. In addition, the custodian shall be required to furnish no less than monthly to the insurance company reports of holdings of custodied securities at times and containing information reasonably requested by the insurance company;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(f)">(f)</a></td> <td valign="top" style="text-align:left" class="leftalign"> During the course of the custodian's regular business hours, and upon reasonable notice, an officer or employee of the insurance company, an independent accountant selected by the insurance company, and a representative of an appropriate regulatory body shall be entitled to examine, on the premises of the custodian, the custodian's records relating to custodied securities, but only upon furnishing the custodian with written instructions to that effect from an appropriate officer of the insurance company;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(g)">(g)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The custodian and its agents shall be required to send to the insurance company: <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(g)1.">1.</a></td> <td valign="top" style="text-align:left" class="leftalign"> All reports which they receive from a clearing corporation or the Federal Reserve book-entry system on their respective systems of internal accounting control, and</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(g)2.">2.</a></td> <td valign="top" style="text-align:left" class="leftalign"> Reports prepared by outside auditors on the custodians or its agent's accounting control of custodied securities that the insurance company may reasonably request;</td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(h)">(h)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The custodian shall maintain records sufficient to provide identifying information relating to custodied securities that may be reported in the insurance company's annual statement and supporting schedules and information required in an audit of the financial statements of the insurance company;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(i)">(i)</a></td> <td valign="top" style="text-align:left" class="leftalign"> the custodian shall provide, upon written request from an appropriate officer of the insurance company, the appropriate affidavits, substantially in the form attached to this Regulation Chapter, with respect to custodied securities;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(j)">(j)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The custodian shall secure and maintain insurance protection in an adequate amount covering the custodian's duties and activities as custodian for the insurer's assets, and shall state in the custody agreement that protection is in compliance with the requirements of the custodian's banning regulator. The Commissioner may determine whether the type of insurance is appropriate and the amount of coverage is adequate;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(k)">(k)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The custodian shall be obligated to indemnify the insurance company for any loss of custodied securities, except that the custodian shall not be required by this regulation to be so obligated to the extent that the loss was caused by other than the negligence or dishonesty of the custodian;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(l)">(l)</a></td> <td valign="top" style="text-align:left" class="leftalign"> In the event that there is a loss of custodied securities for which the custodian shall be obligated to indemnify the insurance company as provided in Paragraph (k) above, the custodian shall promptly replace the securities or the value thereof and the value of any direct loss of rights or privileges resulting from the loss of securities;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(m)">(m)</a></td> <td valign="top" style="text-align:left" class="leftalign"> The agreement may provide that the custodian will not be liable for a failure to take an action required under the agreement in the event and to the extent that the taking of the action is prevented or delayed by war (whether declared or not and including existing wars), revolution, insurrection, riot, civil commotion, act of God, accident, fire, explosion, stoppage of labor, strikes or other differences with employees, laws, regulations, orders or other acts of any governmental authority, or any other cause whatever beyond its reasonable control;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.03(2)(n)">(n)</a></td> <td valign="top" style="text-align:left" class="leftalign"> In the event that the custodian gains entry in a clearing corporation or in the Federal Reserve book-entry system through an agent, there shall be an agreement between the custodian and the agent under which the agent shall be subject to the same liability for loss of custodied securities as the custodian. However, if the agent shall be subject to regulation under the laws of a jurisdiction that is different from the jurisdiction the laws of which regulate the custodian, the Commissioner of Insurance of the state of domicile of the insurance company may accept a standard of liability applicable to the agent that is different from the standard of liability applicable to the custodian.</td> </tr> </table> </td> </tr> </table> <h2><a href="/GAC/120-2-69-.04" name="120-2-69-.04" title="120-2-69-.04">Rule 120-2-69-.04 Assets</a></h2> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(1)">(1)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Certificated and uncertificated securities shall be maintained in depositories within this State by domestic insurers and may be maintained outside of this State by foreign insurers provided that the appropriate affidavits or model custodian agreement, substantially in the form attached to this Regulation Chapter, be utilized as evidence of ownership whenever required by the Commissioner, his staff or his duly appointed examiners: <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(1)(a)">(a)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Exhibit A: for use by a custodian bank where securities entrusted to its care have not been redeposited elsewhere;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(1)(b)">(b)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Exhibit B: for use in instances where a Custodian bank maintains securities on deposit with The Depository Trust Company or like entity;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(1)(c)">(c)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Exhibit C: for use where ownership is evidenced by book-entry at a Federal Reserve Bank;</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(1)(d)">(d)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Exhibit D: for use by custodians who hold all or a majority of the assets of a domestic insurer.</td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.04(2)">(2)</a></td> <td valign="top" style="text-align:left" class="leftalign"> A domestic insurer may maintain securities outside of this State only with the express written permission of the Commissioner.</td> </tr> </table> <h2><a href="/GAC/120-2-69-.05" name="120-2-69-.05" title="120-2-69-.05">Rule 120-2-69-.05 Penalties</a></h2> <P>Any insurer, representative, officer, or employee of such insurer failing to Comply with the requirements of this Regulation Chapter shall be subject to such penalties and other enforcement actions as may be appropriate under the insurance laws of this State.</P> <h2><a href="/GAC/120-2-69-.06" name="120-2-69-.06" title="120-2-69-.06">Rule 120-2-69-.06 Severability</a></h2> <P>If any provision of this Regulation Chapter or the application thereof to any particular person or any particular circumstances is held invalid by a court of competent jurisdiction, the remainder of the Regulation Chapter or the applicability of such provision to other persons or other circumstances shall not be affected.</P> <P><B>EXHIBIT A</B></P> <P><B>CUSTODIAN AFFIDAVIT</B></P> <P>[For use by a custodian bank where securities entrusted to its care have not been redeposited elsewhere.]</P> <P>STATE OF _______________)</P> <P>) SS:</P> <P>COUNTY OF ______________)</P> <P>_______________________________________________, being duly sworn deposes and says that he or she is __________________ of _________________________________, a banking corporation organized under and pursuant to the laws of the ___________ with the principal place of business at ___________________ (hereinafter called the "bank"):</P> <P>That his or her duties involve supervision of activities of the bank as custodian and records relating thereto;</P> <P>That the bank is custodian for certain securities of ______ having a place of business ________________ at (hereinafter called the "insurance company") pursuant to an agreement between the bank and the insurance company;</P> <P>That the schedule attached hereto is a true and complete statement of securities (other than those caused to be deposited with The Depository Trust Company or like entity or a Federal Reserve Bank under the Federal Reserve book-entry procedure) which were in the custody of the bank for the account of the insurance company as of the close of business on ________________________________ ; that, unless otherwise indicated on the schedule, the next maturing and all subsequent coupons were then either attached to coupon bonds or in the process of collection; and that, unless otherwise shown on the schedule, all such securities were in bearer form or in registered form in the name of the insurance company or its nominee or of the bank or its nominee, or were in the process of being registered in such form;</P> <P>That the bank as custodian has the responsibility for the safekeeping of such securities as that responsibility is specifically set forth in the agreement between the bank as custodian and the insurance company; and that, to the best of his or her knowledge and belief, unless otherwise shown on the schedule, the securities were the property of the insurance company and were free of all liens, claims or encumbrances whatsoever.</P> <P>Subscribed and sworn to before me this ______ day _____________________________________ (L.S.) of _________ , 19 ___. Vice President [or other authorized officer]</P> <P><B>EXHIBIT B</B></P> <P><B>CUSTODIAN AFFIDAVIT</B></P> <P>[For use in instances where a custodian bank maintains securities on deposit with The Depository Trust Company or like entity.]</P> <P>STATE OF _______________)</P> <P>) SS:</P> <P>COUNTY OF ______________)</P> <P>_______________________________________________, being duly sworn deposes and says that he or she is __________________ of _________________________________, a banking corporation organized under and pursuant to the laws of the ___________ with the principal place of business at ___________________ ___________________________(hereinafter called the "bank"):</P> <P>That his or her duties involve supervision of activities of the bank as custodian and records relating thereto;</P> <P>That the bank is custodian for certain securities of ______ having a place of business at _____________________________ (hereinafter called the "insurance company") pursuant to an agreement between the bank and the insurance company;</P> <P>That the bank has caused certain of such securities to be deposited with ________________________________________ and that the schedule attached hereto is a true and complete statement of the securities of the insurance company of which the bank was custodian as of the close of business on _____________________________________, and which were so deposited on such date;</P> <P>That the bank as custodian has the responsibility for the safekeeping of the securities both in the possession of the bank or deposited with ____________________________________ as is specifically set forth in the agreement between the bank as custodian and the insurance company; and</P> <P>That, to the best of his or her knowledge and belief, unless otherwise shown on the schedule, the securities were the property of the insurance company and were free of all liens, claims or encumbrances whatsoever.</P> <P>Subscribed and sworn to before me this ______ day _____________________________________ (L.S.) of _________ , 19 ___ . Vice President [or other authorized officer]</P> <P><B>EXHIBIT C</B></P> <P><B>CUSTODIAN AFFIDAVIT</B></P> <P>[For use where ownership is evidenced by book-entry at a</P> <P>Federal Reserve Bank.]</P> <P>STATE OF _______________)</P> <P>) SS:</P> <P>COUNTY OF ______________)</P> <P>______________________________________________ , being duly sworn deposes and says that he or she is __________________ of ________________________________ , a banking corporation organized under and pursuant to the laws of the ___________________________________________________________ with the principal place of business at ___________________ (hereinafter called the "bank"):</P> <P>That his or her duties involve supervision of activities of the bank as custodian and records relating thereto;</P> <P>That the bank is custodian for certain securities of ______ having a place of business at _____________________________ (hereinafter called the "insurance company") pursuant to an agreement between the bank and the insurance company;</P> <P>That the bank has caused certain securities to be credited to its book-entry account with the Federal Reserve Bank of ___________________ under the Federal Reserve book-entry procedure and that the schedule attached hereto is a true and complete statement of the securities of the insurance company of which the bank was custodian as of the close of business on _____________________________________________ , which were in a "general" book-entry account maintained in the name of the bank on the books and records of the Federal Reserve Bank _____________________________ of at such date;</P> <P>That the bank has the responsibility for the safekeeping of such securities both in the possession of the bank or in the "general" book-entry account as is specifically set forth in the agreement between the bank as custodian and the insurance company; and</P> <P>That, to the best of his or her knowledge and belief, unless otherwise shown on the schedule, the securities were the property of the insurance company and were free of all liens, claims or encumbrances whatsoever.</P> <P>Subscribed and sworn to before me this ______ day _____________________________________ (L.S.) of _________ , 19 ___ . Vice President [or other authorized officer]</P> <P><B>EXHIBIT D</B></P> <P><B>MODEL CUSTODIAN AGREEMENT</B></P> <P>[For use by a custodian bank who holds all or a majority of the assets of a domestic insurer.]</P> <P>GEORIGA ____________ COUNTY</P> <P>THIS AGREEMENT, made and entered into between ________ ___________________________________________________________ ______________, incorporated under the laws of the State of Georgia (hereinafter referred to as "Principal"), and _____ _________________________ , _______________________ County, Georgia (hereinafter called "Custodian").</P> <P>WITNESSETH:</P> <P>WHEREAS, Principal is the owner of certain property, including book-entry securities, identified in Exhibit "1" attached hereto and made a part hereof which property Principal wishes to place in custody of Custodian in order that such properties may be preserved and serviced in the manner hereinafter specified, and Custodian is willing to undertake to preserve and service the same as hereinafter provided;</P> <P>NOW THEREFORE, it is agreed between the parties hereto as follows:</P> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.">1.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Powers and Duties of Custodian</U>. Custodian shall: <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)">(a)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Hold and safekeep the assets either in its custody and control or, for a reasonable time, in the custody and control of an agent bank whenever the Custodian determines that custody by an agent bank will expedite the delivery of securities when purchased or sold. The record of all assets held in the custody and control of Custodian shall at all times be identified separately and apart from all other assets held by the Custodian, and such records must clearly identify these assets as belonging solely to the Principal. <P>Notwithstanding the foregoing:</P> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)(i)">(i)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodian may deposit or arrange for the deposit of securities with a Federal Reserve Bank or with the Depository Trust Company or any other clearing corporation approved for this purpose by the Commissioner of Insurance of the State of Georgia ("Commissioner") and by the Securities and Exchange Commission, notwithstanding that such securities may be commingled in a book-entry account with, or may be merged and held in bulk in the name of such depository or its nominee with, other similar securities not belonging to Principal or held by Custodian.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)(ii)">(ii)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodian shall have liability or responsibility for any losses incurred with respect to securities deposited with a Federal Reserve Bank, approved clearing corporation or agent bank pursuant to the foregoing clause only to the extent provided in Paragraph 5.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)(iii)">(iii)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodian shall be entitled to rely on receipts, confirmations, statements, reports and other documentation concerning securities so deposited which Custodian shall receive from such Federal Reserve Bank, approved clearing corporation or agent bank electronically and shall have no responsibility to inquire into the validity or accuracy of such documentation unless it is reasonably apparent from the face thereof that such documentation is invalid or inaccurate, or that there is a possibility of invalidity or inaccuracy which reasonably warrants further inquiry.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)(iv)">(iv)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodian shall not be required to hold securities which would otherwise be within its custody or control or within the custody or control of an agent bank when such securities are in transit as a result of a sale, purchase or corporate action, and in the normal course of business would temporarily not be in the actual possession of Custodian. Custodian shall be required to insure such securities as they may be required to deliver during the period such securities are in transit.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(a)(v)">(v)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Custodian shall be authorized to deposit and hold assets consisting of securities of foreign issuers and obligators in the custody and control of subcustodian agents appointed by Custodian upon such terms as Custodian may reasonably agree with such subcustodian agents, including terms granting to subcustodian agents the power to deposit and hold securities in the custody and control of other subcustodians selected by subcustodian agents appointed by Custodian.</td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(b)">(b)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Collect the dividends, interest, issues and income from the assets, and the principal at maturity as the same becomes due and payable. Custodian shall promptly forward to Principal information received by Custodian and requiring action by Principal, such as rights offerings, proxies, and calls or redemption of funds.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(c)">(c)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Keep accurate books of the custody account and render to Principal monthly a statement accounting for the assets and their market value as of the date of such statement, and all receipts and disbursements in connection with the assets.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(d)">(d)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Accumulate and hold all income or other cash receipts, from proceeds of sales or otherwise, collected or received by Custodian, subject to such disbursement and disposition as Principal may direct, or subject to such investment or reinvestment as Principal may direct from time to time.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(e)">(e)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Take such action respecting sales of any assets and the investment or reinvestment of the proceeds thereof as Principal may direct from time to time.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.061.(f)">(f)</a></td> <td valign="top" style="text-align:left" class="leftalign"> Except for securities held in bearer form or at an approved depository, be authorized to register any stock, bond or other security held in the custody and control of Custodian in nominee form provided such nominee is listed with the American Society of Corporate Secretaries, Inc., or any similar body publishing lists of nominees. Accurate records shall be maintained showing that any such security is a custodial asset hereunder. Assets physically held by Custodian in bearer or registered form, in nominee registration or at a Federal Reserve Bank, agent bank, Deporitory Trust Company or other approved clearing corporation shall at all times remain under the direction and control of Principal.</td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.062.">2.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Return of Assets</U>. Principal shall have the right at any time to direct Custodian to return to Principal all or any part of the Custodian assets, except that custodied securities used to meet the deposit requirements set forth in Chapter 12 of the Georgia Insurance Code shall, to the extent required by that section, be under the control of the Commissioner and shall not be withdrawn by Principal without the express written approval of the Commissioner.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.063.">3.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Limitations on Duties</U>. In performing said duties, Custodian shall serve Principal's interest with loyalty. Custodian, however, shall not be required to prepare or file any tax returns, render any legal services or institute or defend any legal proceedings in connection with this Agreement or the assets hereunder.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.064.">4.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Notices; Reliance</U>. Any notice, direction or instruction of Principal to Custodian shall be in writing, signed by at least one authorized person or shall be given orally, in person, by telephone, by facsimile or other electronic means by an authorized person followed promptly by written confirmation, or by acceptable electronic authorization signed by at least one authorized person. A person shall be deemed to be authorized to act for Principal for purposes hereof if his or her name, specimen signature and authority have been certified to Custodian by the Secretary or an Assistant Secretary of Principal over its corporate seal, and such person shall continue to be an authorized person until Custodian receives written notice to the contrary from the Secretary or an Assistant Secretary of the Principal over its corporate seal. Custodian shall act and be fully protected in acting in accordance with notice, direction or instruction reasonably believed by Custodian to have been given by an authorized person, and shall not be obligated to take any corrective action with respect thereto unless and directed to do so by Principal.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.065.">5.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Indemnity.</U> Custodian shall be responsible for losses or damage to the assets in its care, custody and control, including assets held at an agent bank, approved clearing corporation, Federal Reserve Bank, subcustodian bank or any other agent of Custodian, if such loss is occasioned by the dishonesty, willful acts or negligence of Custodian's officers or employees, fire, burglary, robbery, theft or mysterious disappearance. Under no circumstances shall Custodian be liable for consequential damages under this Agreement or for any cause whatsoever beyond its reasonable control including, but not limited to, acts of governmental authority, war, insurrection, nuclear reaction, or acts of God such as hurricane, tornado, earthquake or volcanic eruption. This indemnity provision shall survive the termination of this agreement.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.066.">6.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Replacement of Losses</U>. In the event there is an injury to or loss of assets while under the care, custody and control of Custodian or one of its agents or nominees, a Federal Reserve Bank or an approved clearing corporation, Custodian shall, promptly and upon demand by Principal, cause said securities to be replaced with securities of like kind and quality, together with all rights and privileges pertaining thereto or, if acceptable to Principal, replace the value thereof at the time of loss, together with the value at such time of any loss of any rights or privileges hereunder.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.067.">7.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Termination of Agreement</U>. This Agreement may be terminated at any time by either party upon thirty (30) days written notice to the other party. Upon such termination, all assets remaining in the care, custody and control of the Custodian shall be delivered to Principal, its authorized agent or a successor custodian.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.068.">8.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Compensation of Custodian</U>. For its services hereunder, custodian shall be paid such compensation as may be provided in a separate agreement between Principal and Custodian or, in the absence of such agreement, shall receive the fees it normally charges for similar custodian services under its regularly published fee schedule as the same may from time to time be amended.</td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.069.">9.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Inspection by Regulatory</U>. The books and records of Custodian pertaining to its actions under this Agreement and assets held by the Custodian under this Agreement shall be open to inspection and audit at reasonable times by Principal's officers and auditors or by representatives of the Commissioner or any bank regulatory authority. </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.0610.">10.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Regulatory Reporting</U>. Custodian agrees to cooperate with Principal in providing the information necessary for the preparation of routine reports to Principal's stockholders, the Securities and Exchange Commission under forms N-1R and N-1Q, state "blue sky" authorities and other governmental agencies in connection with audits of Principal or other similar matters requiring access to the assets held by Custodian and all records applicable hereunder. </td> </tr> </table> <table border="0" width="100%" cellspacing="4" cellpadding="4"> <tr> <td valign="top" width="1%" style="white-space:nowrap;text-align:left;width:18px;"><a style="white-space:nowrap;" name="120-2-69-.0611.">11.</a></td> <td valign="top" style="text-align:left" class="leftalign"><U>Modifications; Governing Law </U>. This Agreement, together with any agreement regarding the compensation of Custodian referred to herein, shall constitute the entire agreement of the parties and no modifications shall be effective unless in writing signed by Custodian and Principal. The construction and interpretation of this Agreement and the rights, duties and liabilities of the parties hereunder shall be determined in accordance with the laws of the State of Georgia. <P>IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed by their duly authorized officers and their seals to be affixed and duly attested this ____________day of __________, 19_____. </P> <P>(CORPORATE SEAL) as Principal </P> <P>Attest: By:</P> <P> _______________________ ______________________ </P> <P>Title Title </P> <P>(CORPORATE SEAL) as Custodian </P> <P>Attest: By: </P> <P>______________________ ____________________ </P> <P>Title Title </P> </td> </tr> </table> </div> </div> </HTML> </div> <div id="toc" class="sidebar noprint"> <ul id="toc-children" class="children"><li><a href="/GAC/120-2-69-.01" name="120-2-69-.01" title="120-2-69-.01">Rule 120-2-69-.01 Purpose</a></li><li><a href="/GAC/120-2-69-.02" name="120-2-69-.02" title="120-2-69-.02">Rule 120-2-69-.02 Definitions</a></li><li><a href="/GAC/120-2-69-.03" name="120-2-69-.03" title="120-2-69-.03">Rule 120-2-69-.03 Custody Agreements; Requirements</a></li><li><a href="/GAC/120-2-69-.04" name="120-2-69-.04" title="120-2-69-.04">Rule 120-2-69-.04 Assets</a></li><li><a href="/GAC/120-2-69-.05" name="120-2-69-.05" title="120-2-69-.05">Rule 120-2-69-.05 Penalties</a></li><li><a href="/GAC/120-2-69-.06" name="120-2-69-.06" title="120-2-69-.06">Rule 120-2-69-.06 Severability</a></li></ul> </div> </div> <!--content ends here--> <div id="footer" class="noprint"><span class="footer">Copyright &copy; 2019 Lawriter LLC - All rights reserved.</span>| <a href="mailto:support@casemakerlegal.com?subject=Rules and Regulations of the State of Georgia">Email Us</a> | 844-838-0769 | <a href="http://livechat.casemakerlegal.com/client.php?locale=en" target="_blank" onclick="if(navigator.userAgent.toLowerCase().indexOf('opera') != -1 && window.event.preventDefault)window.event.preventDefault();this.newWindow = window.open('http://livechat.casemakerlegal.com/client.php?locale=en&url='+escape(document.location.href)+'&referrer='+escape(document.referrer), 'webim','toolbar=0,scrollbars=0,location=0,status=1,menubar=0,width=640,height=480,resizable=1');this.newWindow.focus();this.newWindow.opener=window;return false;">Live Chat</a> </div> </div> </body> </html>