Naic Model Act Custodial Agreements

What specific law requires an insurer to maintain its investments under a deposit agreement? The New York Insurance Act does not require a national insurer to maintain its investments in a deposit agreement with a bank. An insurer can keep its own investments or deposit them with a bank. Any custody agreement between a bank and an insurer must include guarantees and provisions that must be evaluated in accordance with the guidelines followed by division supervisors, as set out in Part I, Section IV(H) of the NAIC Examiner`s Handbook, and adopted in Regulation 172, 11 NYCRR § 83 (2006). Those Directives require, inter alia, that securities held under deposit-taking or custody arrangements be held in a bank or trust company licensed by the United States or a State of those States, where such institutions are subject to regular supervision by the approval authority. There are also new and expanded general hearings on the agreement for the retention of an insurer annexed to the annual accounts. For questions related to insurers` requirements to hold securities deposits with the Superintendent of the New York Department of Insurance, we refer to N.Y. Ins. Law § 1314, 1319, 1320 and 4104 (McKinney 2006). These articles deal with the requirements imposed on certain insurers, including foreign and foreign insurers, to hold a minimum amount of securities deposited with the Superintendent. For more information, please contact Supervising Attorney Michael Campanelli at the New York City Office. On July 25, 2007, the Office of General Counsel issued the following opinion, which represented the position of the New York State Department of Insurance. The investigation was of a general nature and did not contain specific facts.

. . .

© 2007-2012 Building Owners and Managers Association of California (BOMA Cal)