California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 9.5 - Workers' Compensation Insurance Deposits
Section 2509.14 - Election of Depository

(a) Any workers' compensation insurer electing to deposit securities in the California office of a duly licensed bank, savings and loan association or trust company shall do so subject to the approval of the Commissioner. The selected Depository shall have deposits of no less than seven hundred fifty million dollars ($750,000,000). If such election is made, no more than one (1) office of any bank, savings and loan association or trust company shall be selected as the holder of the required deposit. The holder is defined herein as the center of control and reporting. All records pertaining to the deposit shall be maintained in the selected holder-office. The deposited assets shall be maintained in this State.

(b) Where a depository is used, the outside depository trust company shall be approved in advance for such purpose by the Commissioner. In such a case, book-entry accounting is acceptable for the deposit. The Federal Reserve book-entry program for deposit of federal securities may be issued through the Depository itself because it is (1) a member bank in the Federal Reserve System located in California or (2) a depository institution which has its own direct account at the Federal Reserve System located in California, whether or not the definitive certificates are available upon express request. The Depository shall monitor the transactions and maintain the book-entry securities. It shall expressly undertake the same responsibilities, obligations, duties and reporting requirements for these securities as for all other deposited securities.

(c) Subject to the bank, savings and loan association or trust company's right to terminate the agreement pursuant to which a deposit is held, no insurer may change its election more frequently than once in any twelve (12) month period. Any change in Depository shall be subject to the prior approval of the Commissioner. Notwithstanding the foregoing, an insurer may elect to file a letter of credit with the Commissioner, or make a securities deposit with the State Treasurer.