Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 860 - ALIEN INSURERS; PORT OF ENTRY
Section 031-860-6 - Requirements for Trust Agreement

Universal Citation: 02 ME Code Rules ยง 031-860-6

Current through 2024-38, September 18, 2024

A. The deed of trust and all amendments thereto shall be authenticated in such form and manner as the Superintendent may prescribe and shall not be effective unless approved by the Superintendent upon a finding that:

(1) A deed of trust or its amendments are sufficient in form and in conformity with law;

(2) The trustee or trustees are eligible as such; and

(3) The deed of trust is adequate to protect the interests of the beneficiaries of the trust.

B. If at any time the Superintendent finds, after reasonable notice and hearing, that the requisites for the approval no longer exist, the Superintendent may withdraw approval.

C. A non-U.S. insurer may file modifications of, or variations in any deed of trust with the Superintendent for approval. The modifications may be approved if, they otherwise comply with law, and in the Superintendent's judgment are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the U.S. branch.

D.

(1) The deed of trust shall contain provisions which:
(a) Vest legal title to trusteed assets in the trustees, and their successors lawfully appointed;

(b) Require that all assets deposited in the trust shall be continuously kept within the State of Maine;

(c) Provide for substitution of a new trustee or trustees in case of a vacancy by death, resignation or otherwise, subject to the approval of the Superintendent;

(d) Require that the trustee or trustees shall continuously maintain within the State of Maine a record at all times sufficient to identify the assets of such fund;

(e) Require that the trusteed assets shall consist of cash and/or investments eligible for investment of the funds of domestic insurers and accrued interest thereon if collectable by the trustee;

(f) Require that the trust shall be for the exclusive benefit, security and protection of the policyholders, or policyholders and creditors, of the U.S. branch in the United States and that it shall be maintained as long as there is outstanding any liability of the non-U.S. insurer arising out of its insurance transactions in the United States; and

(g) Provide, in substance that no withdrawals of assets, other than income as specified in Paragraph (2) of this subsection shall be made or permitted by the trustee or trustees without the approval of the Superintendent except to:
(i) Make deposits required by law in any state for the security or benefit of all policyholders, or policyholders and creditors, of the U.S. branch in the United States;

(ii) Substitute other assets permitted by law and in an amount at least equal in value and quality to those withdrawn, upon the specific written direction of the United States manager when duly empowered and acting pursuant to either general or specific written authority previously given or delegated by the board of directors; or

(iii) Transfer such assets to an official liquidator or rehabilitator pursuant to an order of a court of competent jurisdiction.

(2) The deed of trust may provide that income, earnings, dividends or interest accumulations of the assets of the fund may be paid over to the United States manager of the U.S. branch upon request, provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to Section 5 of this Rule.

E. Upon withdrawal of trusteed assets deposited in another state in which the insurer is authorized to do business, it shall be sufficient if the deed of trust requires similar written approval of the insurance supervising official of that state in lieu of approval of the Superintendent provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to Section 5 of this Act. In all such cases the U.S. branch shall notify the Superintendent in writing of the nature and extent of the withdrawal.

F. The Superintendent will from time to time:

(1) Make examinations of the trusteed assets of any authorized U.S. branch at the insurer's expense; and

(2) Require the trustee or trustees to file a statement, in such form as the Superintendent may prescribe, certifying the assets of the trust fund and the amounts thereof.

G. Refusal or neglect of any trustee to comply with the foregoing requirements shall be ground for the revocation of the insurer's license or the liquidation of its United States branch.

Disclaimer: These regulations may not be the most recent version. Maine may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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