Wyoming Administrative Code › Agency 044 - Insurance Dept › Sub-Agency 0002 - General Agency, Board or Commission Rules › Chapter 57 - REGULATION ON CUSTODIAL AGREEMENTS AND THE USE OF CLEARING CORPORATIONS › Section 57-4 - Custody Agreement; Requirements

Current through July 13, 2024
(a) An insurance company may, by written
				agreement with a custodian, 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:
(i)
				Securities certificates held by the custodian shall be held separate from the
				securities certificates of the custodian and of all of its other
				customers.
(ii) 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.
(iii) 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.
(iv)
				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 W.S. §
										
											26-3-111 shall, to the extent required by
				that section, be under the control of the Commissioner and shall not be
				withdrawn by the insurance company without the approval of the
				Commissioner.
(v) The custodian
				shall be required to send or cause to be sent 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 the insurance company with reports of holdings of
				custodied securities at times and containing information reasonably requested
				by the insurance company. The custodian's trust committee's annual reports of
				its review of the insurer's trust accounts shall also be provided to the
				insurer. Reports and verifications may be transmitted in electronic or paper
				form.
(vi) During the course of the
				custodian's regular business hours, 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.
(vii) The custodian and its agents shall be
				required to send to the insurance company:
(A)
				All reports which they receive from a clearing corporation on their respective
				systems of internal accounting control; and
(B) Reports prepared by outside auditors on
				the custodian's or its agent's internal accounting control of custodied
				securities that the insurance company may reasonably request.
(viii) The custodian shall
				maintain records sufficient to determine and verify 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.
(ix) The custodian shall provide, upon
				written request from an appropriate officer of the insurance company, the
				appropriate affidavits, substantially in the form found on the Department's
				website located at
http://doi.wyo.gov
.
(x) A national bank, state bank, or trust
				company shall secure and maintain insurance protection in an adequate amount
				covering the bank's or trust company'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 banking regulator.
				The Commissioner may determine whether the type of insurance is appropriate and
				the amount of coverage is adequate.
(xi) The custodian shall be obligated to
				indemnify the insurance company for any loss of custodied securities, except
				that the custodian shall not be so obligated to the extent that the loss was
				caused by other than the negligence or dishonesty of the custodian.
(xii) 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 (xi) above, the custodian shall
				promptly replace the securities or the value thereof and the value of any loss
				of rights or privileges resulting from the loss of securities.
(xiii) 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.
(xiv) In the event that the custodian gains
				entry in a clearing corporation 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 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.
(xv) The custodian shall provide written
				notification to the insurer's domiciliary commissioner if the custodial
				agreement with the insurer has been terminated or if 100 percent (100%) of the
				account assets in any one custody account have been withdrawn. This
				notification shall be remitted to the Commissioner within three (3) business
				days of the receipt by the custodian of the insurer's written notice of
				termination or within three (3) business days of the withdrawal of 100 percent
				(100%) of the account assets.