51A-6A-19.2. Investments pledged to division for security of trust creditors of trust company--Amount--Income from investments--Pledge increase--Hearing.
Before any trust company authorized by this title transacts any trust company business, the trust company shall pledge to the division, and maintain at all times, investments for the security of the trust creditors of the trust company, including as a priority claim costs incurred by the division in a receivership or liquidation of the trust company if the trust company should fail. The director shall determine the amount of the pledge in an amount deemed appropriate to defray the costs incurred by the division in a receivership or liquidation of the trust company, but the amount of the pledge may not be less than a market value of one hundred thousand dollars, nor exceed five hundred thousand dollars for a private trust company or one million dollars for a public trust company. Notwithstanding the maximum pledge amount allowed under this section, the director may require a public trust company to maintain a pledge of greater than one million dollars if the director finds that an increased pledge amount is required based upon consideration of the factors in §51A-6A-19.1. The director may authorize a reduction of any previously established pledge, provided that no pledge may be less than a market value of one hundred thousand dollars. All investments pledged to the division shall be held at a depository institution in this state and all costs associated with pledging and holding the investments are the responsibility of the trust company.
The investments pledged to the division shall be of the same nature and quality as those required for public funds under §§4-5-6, 4-5-6.1, and 4-5-6.2.
The commission may promulgate rules, pursuant to chapter 1-26, to establish additional investment guidelines or investment options for purposes of the pledge required by this section.
In the event of a receivership of a trust company, the director may, without regard to priorities, preferences, or adverse claims, reduce the pledged investments to cash and, as soon as practicable, utilize the cash to defray the costs associated with the receivership.
Income from the investments pledged shall belong to and be paid to the trust company so long as the trust company continues to conduct its business in the ordinary course and so long as authorized by the director.
If the director requires a trust company to increase its pledge, the director shall provide the trust company with notice and an order setting forth the amount of the pledge. The proposed effective date of the order setting forth the amount of the pledge shall be stated in the order as on or after the thirty-first day after the date of the order. Unless the trust company requests a hearing before the commission in writing before the proposed effective date of the order, the order is effective and final on the proposed effective date. Any hearing before the commission shall be held pursuant to chapter 1-26.
Source: SL 2010, ch 232, §21; SL 2012, ch 233, §1; SL 2015, ch 240, §5; SL 2019, ch 205, §2.