304.7-360 Definitions -- Deposits allowed -- Commingling of certain securities -Records -- Rules and regulations.
(1)
As used in this section:
(a) "Clearing corporation" shall be defined as provided in KRS 355.8-102(3)
except that, with respect to securities issued by institutions organized or
existing under the laws of any foreign country or securities used to meet the
deposit requirements pursuant to the laws of a foreign country as a condition
of doing business therein, "clearing corporation" may include a corporation
organized or existing under the laws of any foreign country which is legally
qualified under such laws to effect transactions in securities by computerized
book entry;
(b) "Custodian bank" means a national bank, state bank or trust company which is
a member of the Federal Reserve System which acts as custodian of all or any
part of an insurance company's securities;
(c) "Direct participant" means a bank, trust company, or other institution which
maintains an account in its name in a clearing corporation and through which
an insurance company participates in a clearing corporation;
(d) "Federal reserve book-entry system" means the computerized systems
sponsored by the United States Department of the Treasury and certain
agencies and instrumentalities of the United States for holding and
transferring securities of the United States government and such agencies and
instrumentalities, respectively, in federal reserve banks through banks which
are members of the Federal Reserve System or which otherwise have access to
such computerized systems;
(e) "Member bank" means a national bank, state bank or trust company which is a
member of the Federal Reserve System through which an insurance company
participates in the federal reserve book-entry system;
(f) "Security" means a certificated security or an uncertificated security;
(g) "Certificated security" means a share, participation or other interest in
property or an enterprise of the issuer or an obligation of the issuer which is
represented by an instrument issued in bearer or registered form, of a type
commonly dealt in on securities exchanges or markets or commonly
recognized in any area in which it is issued or dealt in as a medium for
investment, and either one (1) of a class or series or by its terms divisible into
a class or series of shares, participations, interests, or obligations; and
(h) "Uncertificated security" means a share, participation, or other interest in
property or an enterprise of the issuer or an obligation of the issuer which is
not represented by an instrument and the transfer of which is registered upon
books maintained for that purpose by or on behalf of the issuer, of a type
commonly dealt in on securities exchanges or markets; and either one (1) of a
class or series or by its terms divisible into a class or series of shares,
participations, interests, or obligations.
(2)
(3)
(4)
(5)
Notwithstanding any other provision of law, an insurance company or its custodian
bank may deposit or arrange for the deposit of securities held in or purchased for the
general account and the separate accounts of such insurance company in a clearing
corporation or the federal reserve book-entry system. When securities are deposited
with a clearing corporation, certificates representing securities of the same class of
the same issuer may be merged and held in bulk in the name of the nominee of such
clearing corporation with any other securities deposited with such clearing
corporation by any person, regardless of the ownership of such securities, and
certificates representing securities of small denominations may be merged into one
(1) or more certificates of larger denominations. The records of any member bank
through which an insurance company holds securities in the federal reserve bookentry system, and the records of any direct participant through which an insurance
company holds securities in a clearing corporation, shall at all times show that such
securities are held for such insurance company or its custodian bank and for which
accounts thereof. Ownership of, and other interests in, such securities may be
transferred by bookkeeping entry on the books of such clearing corporation or in the
federal reserve book-entry system without, in either case, physical delivery of
certificates representing such securities.
Notwithstanding any other provision of law, an insurance company may deposit
securities held in or purchased for its general account and its separate accounts in a
custodial account with a custodian bank approved by, and under a custodial
agreement approved by, the commissioner. When securities are deposited in such
custodial account, certificates representing securities of the same class of the same
issuer may be merged and held in bulk in the name of the custodian bank or its
nominee with any other securities held in the custody of the custodian bank or its
nominee by any person, regardless of the ownership of such securities, and
certificates representing securities of small denominations may be merged into one
(1) or more certificates of larger denominations. The records of the custodian bank
which holds securities for an insurance company in a custodial account shall at all
times show that such securities are held for such insurance company and for which
accounts thereof. Ownership of, and other interests in, such securities may be
transferred by bookkeeping entry on the books of such custodian bank without
physical delivery of certificates representing such securities.
The same bank or trust company may act as direct participant, member bank, and
custodian bank for an insurance company.
The commissioner of insurance shall promulgate rules and regulations governing
the deposit by insurance companies of securities with clearing corporations and in
the federal reserve book-entry system and with custodian banks.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1012, effective July 15, 2010. -- Created
1982 Ky. Acts ch. 258, sec. 1, effective July 15, 1982.
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