Current through Register Vol. 48, No. 12, March 22, 2024
a) Every domestic company may, by written
agreement with a custodian qualified to administer trusts in this State under
the Corporate Fiduciary Act [205 ILCS 620 ], and that has an office in this
State at which the account is maintained, provide for the custody of its
securities with that custodian. The securities that are the subject of the
agreement may be held by the custodian or its agent or in a clearing
corporation.
b) 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 of the board. The terms
of the agreement shall comply with the following:
1) Securities' certificates held by the
custodian shall be held separate from the securities' certificates of the
custodian and of all of its other customers.
2) Securities held indirectly by the
custodian and securities in a clearing corporation shall be separately
identified on the custodian's official records as being owned by the insurance
company. The records shall identify which securities are held by the custodian
or by its agent and which securities are in a clearing corporation. If the
securities are in a clearing corporation, 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.
3) To the extent not inconsistent with the
provisions of this Part, the custody agreement shall conform to the guidelines
and procedures set forth in the Financial Condition Examiners
Handbook.
4) If the securities are
not located in Illinois, the company's board of directors shall adopt a
custodial plan and file it for approval by the Director. If there is a
committee or an officer with evidence of the authority from the board to act on
this matter, approval by the committee or officer will be sufficient. The
custodial plan shall acknowledge that the company and custodian have entered
into a custody agreement that contains the following provisions:
A) Address of custodian's Illinois office and
that of its main office if outside of Illinois.
B) Acknowledgment by the custodian that is
authorized to administer trusts in Illinois pursuant to the provisions of the
Illinois Corporate Fiduciary Act [205 ILCS 620].
C) Confirmation that the Illinois Division of
Insurance and the courts of the State of Illinois have in rem jurisdiction over
the securities, and that the custodian will make the records of the custodial
account readily available to the Illinois Division of Insurance during normal
business hours.
D) Confirmation
that the custodian submits to the jurisdiction of the Illinois Division of
Insurance, and to the jurisdiction of any State or federal court located in the
State of Illinois.
E) Designation
of the custodian's Illinois office as its agent for service of
process.
F) Designation that the
rights and obligations of the parties under the agreement shall be construed
and enforced in accordance with Illinois law.