Download as PDF
CHAPTER 6-05
ANNUITY, SAFE DEPOSIT, SURETY, AND TRUST COMPANIES
6-05-01. Who may form - Corporation has perpetual existence.
Any number of persons, not less than nine, at least three of whom must be residents of this
state, may associate themselves and form a corporation for the purpose of transacting business
as an annuity, safe deposit, and trust company. Its existence shall be perpetual.
At the time and place stated, and through any sources of information at its command, the
board shall examine and consider all relevant factors, including whether the place where such
company is proposed to be located is in need of a further annuity, safe deposit, and trust
company, whether the proposed institution is adapted to the filling of such need, and whether
the proposed incorporators are possessed of such character, integrity, reputation, and financial
standing as shown by a detailed financial statement to be furnished by them, that their
connection with the company will be beneficial to the public welfare of the community in which
such company is proposed to be established. The board shall hear any reasons advanced by
the applicants why they should be permitted to organize the proposed institution and any
reasons advanced by any person why such institution should not be permitted to be organized.
At the termination of such hearing, the board shall make a brief statement in writing of its
conclusions, and if it finds that the proposed institution should not be permitted to organize, it
shall state briefly the reasons why. A copy of such conclusions either shall be endorsed upon or
attached to the organization certificate, together with the refusal or grant of permission to the
proposed incorporators to present the said organization certificate to the secretary of state. A
determination in favor of such organization must be joined in by a majority of the members of
the board.
Any banking association organized under chapter 6-02 may apply to the board for an order
authorizing the applicant to exercise fiduciary powers. If the determination of the board is in
favor of the applicant, the board shall make its order authorizing the applicant to engage in the
business of a trust company upon its showing full compliance with sections 6-05-03, 6-05-04,
and 6-05-05 except the capital stock of the banking association shall not be required to be
divided in shares of one hundred dollars each as provided by section 6-05-03. Sections 6-05-06
and 6-05-07 are not applicable to banking associations granted authority to engage in the
business of a trust company by the board. Thereafter, such banking association must be subject
to the jurisdiction of the board as to its trust company operations the same as trust companies
organized under chapter 6-05.
Any corporation organized and authorized to transact the business of fidelity insurance and
corporate suretyship prior to July 1, 1983, pursuant to the former sections 6-05-08 and 6-05-19
through 6-05-24 and sections 6-05-30 through 6-05-33 may continue to operate under the
provisions of those sections as they existed on June 30, 1983.
6-05-02. Compliance with chapter required - Penalty for noncompliance.
No person, firm, company, copartnership, or corporation, either domestic or foreign, not
organized under this chapter nor subject to its provisions, except only national banking
corporations, state banks authorized under this chapter, state banks or trust companies
authorized to engage in trust activities under the laws of another state, their affiliates, bona fide
banking institution trade associations and their affiliates, and the Bank of North Dakota, may
make use of or display in connection with its business, in signs, letterheads, advertising, or in
any other way, such words as "trust", "trust company", or any other word or words of like import,
nor may any person or concern do or perform anything in the nature of the business of a trust
company until and unless such business is regularly organized and authorized under this
chapter. If any firm or corporation organized prior to July 1, 1931, has been granted a charter
permitting it to use any word, words, or title contrary to the intent of this section, and by reason
of its rights under such charter, the provisions of this section may not be enforced against it
during the life of such charter. However, no renewal charter may be granted to such person,
firm, or corporation permitting the continuance of the use of such word, words, or title contrary to
or in violation of this section. Any person, firm, or corporation which, by reason of an existing
charter right under any law or statute in effect prior to July 1, 1931, may be held by the courts
Page No. 1
not to be affected by this section and which therefore refuses to comply with the provisions of
this section, during the period of noncompliance, shall display, prominently and continuously in
plain, legible, and clearly discernible lettering on all of its signs, stationery, circulars, and
advertising, and in all of its printed or written matter the following words and language: "NOT
UNDER THE SUPERVISION OF THE STATE BANKING BOARD OR THE COMMISSIONER
OF FINANCIAL INSTITUTIONS", and such language must be displayed thereon as prominently
as any other matter therein. Any person, firm, company, copartnership, or corporation, domestic
or foreign, violating any provision of this section, shall forfeit to the state one hundred dollars for
every day or part thereof during which such violation continues. In an action brought by the
commissioner or any aggrieved person, the court may issue an injunction restraining such
person, firm, company, copartnership, or corporation from further using such words, terms, or
phrases in violation of this section or from further transacting business in such a way or manner
as to lead the public to believe that its business is in whole or in part of the nature of a trust
company, or that it is under the supervision of the state banking board or the commissioner.
Upon written request, the commissioner may grant an exemption to this section if the
commissioner finds that use of the words "trust" or "trust company", or words of like import, are
not reasonably likely to cause confusion or lead the public to believe that the person requesting
the exemption is a trust company, banking institution trade association, or affiliate authorized
under this section or is conducting a business subject to the jurisdiction of the department. In
granting an exemption under this section, the commissioner may restrict or condition the
exemption and use of the name or word or the activities of an exempt person as the
commissioner considers appropriate to protect the public interest.
6-05-03. Capital required.
The amount of capital of any such corporation may not be less than one million dollars, with
no less than five hundred thousand dollars of that amount in liquid assets. The state banking
board may require such additional capital, surplus, and undivided profits as it may determine
necessary to properly serve the area and to protect the public interests. The state banking
board shall take into consideration peer group ratios, or federal standards and guidelines, when
determining whether any additional capital is required.
6-05-04. Surety deposit investments required - Securities in which investment may be
made.
Every corporation organized under this chapter and every foreign corporation before
engaging in similar comparable activities within this state shall either deposit with any federal
reserve bank, the Bank of North Dakota, or any other custodian approved by the commissioner,
securities as provided by this section or pledge a certificate of deposit as provided by this
section. The deposit or pledge may not be less than fifty thousand dollars or less than one-sixth
of the par value of the capital stock of the corporation, whichever is the greater. However, a
corporation is not required to deposit or pledge more than five hundred thousand dollars. The
deposit certificate or pledge agreement must authorize the commissioner to cause the deposit,
in part or in whole, to be transferred to the commissioner upon the commissioner's demand. An
original of the deposit certificate or pledge must be furnished to the commissioner. The deposit
or pledge must be:
1. Bonds of the United States or of this state;
2. Bonds of other states which have the approval of the commissioner of financial
institutions;
3. Bonds or obligations of any township, school district, city, or county within this state,
whose total bonded indebtedness does not exceed five percent of the then assessed
valuation thereof;
4. Bonds or promissory notes secured by first mortgages or deeds of trust upon
unencumbered real estate situated within the state of North Dakota worth two and
one-half times the amount of the obligation so secured;
5. Obligations issued, assumed, or guaranteed by the international bank for
reconstruction and development or the African development bank;
6. United States treasury bills or notes of an agency thereof;
Page No. 2
7.
8.
Certificates of deposit fully insured by the federal deposit insurance corporation from
banks located within this state; or
Certificates of deposit issued by the Bank of North Dakota.
6-05-04.1. Right of action against deposit.
The security deposited with the department of financial institutions as provided in section
6-05-04 must be held by the department of financial institutions for the benefit of any person
making any transfer or deposit of money or property in the state of North Dakota to or with any
trust company and who suffers loss or damage because of the breach of any trust committed by
such trust company. Any judgment obtained by any such person from any court of competent
jurisdiction may be satisfied from the security deposited with the department of financial
institutions.
6-05-05. Certificate of deposit.
Whenever any such corporation assigns, transfers, and delivers to the commissioner, or a
designated agent, the securities described in section 6-05-04 and all evidences of such
investment, the commissioner, or a designated agent, shall execute and deliver to the
corporation a certificate of such deposit, and thereupon, the said corporation may commence
and carry on business under the provisions of this chapter. The commissioner, or a designated
agent, shall hold the said securities so deposited with the commissioner or agent as collateral
security for the depositors and creditors of the corporation, and for the faithful execution of any
trusts which may be imposed lawfully upon and accepted by such corporation. The corporation
from time to time may withdraw the said securities or any part thereof from the commissioner, or
a designated agent, upon depositing with the commissioner or agent other securities of equal
amount and value and of the kinds specified in section 6-05-04. Until otherwise ordered by a
court of competent jurisdiction, the said commissioner, or a designated agent, shall pay over to
such corporation the interest and dividends which the commissioner or agent collects upon such
securities. Any corporation having a larger deposit with the commissioner, or a designated
agent, than is required by this chapter must be allowed at any time to withdraw its excess
deposit.
6-05-06. Directors - Qualifications - Terms - Vacancies.
All the corporate powers of such a corporation must be exercised by a board of directors of
not less than three nor more than twenty-five in number, and such officers and agents as it
elects or appoints. At least two-thirds of the directors must be citizens of the United States. Any
director who becomes in any manner disqualified shall vacate that director's office thereupon.
Every director, when elected or appointed, shall take the oath specified in section 6-03-04. Such
oath, subscribed by the director making it and certified by the officer before whom it was taken,
must be transmitted at once to the commissioner to be filed in the commissioner's office. The
articles of incorporation must state the names and residences of the first board of directors, of
whom the first named one-third shall serve for a period of three years, the second one-third
named for a period of two years, and the balance thereof shall serve for a period of one year
from the date fixed for the commencement of such corporation. In case any of the persons so
named shall fail or refuse to qualify from any cause, the directors who qualify must elect
qualified persons to fill such vacancies, and thereafter, at each annual meeting of the
stockholders, directors must be elected to serve three years in place of those whose terms then
expire.
6-05-07. Election of directors - Appointment and bonds of officers.
An annual election must be held at the principal office or place of business of the
corporation, which must be within this state, upon a day to be fixed by the articles of the
corporation, and notice of such election must be given by registered or certified mail at least ten
days prior to such date, or by publication in a newspaper published in the county in which the
corporation has its principal place of business. At such meeting, the directors must be elected,
and in case of a failure to elect on that day or on a day to which such annual meeting may be
Page No. 3
adjourned, the directors whose regular terms do not then expire shall proceed to elect such
number of directors as have failed of election, and any vacancy in the office of director may be
filled by the board until the next annual meeting. The board of directors, at its next meeting
following the election of directors and after such directors have qualified, shall elect from its
number a president, vice president, and such other officers as may be necessary to the
transaction of the business of the corporation. The board shall define the powers, authority, and
duties of such officers and employees by bylaws or resolutions, fix the conditions, form, and
amount of their bonds, and approve the same, but no such officer or employee may enter upon
the discharge of the person's duties until such bond has been approved and has been filed with
and approved by the commissioner.
6-05-08. Corporate powers.
A corporation, when qualified as provided by section 6-05-04, may:
1. Acquire, lease, purchase, own, hold, use, improve, mortgage, sell, and convey such
real estate and personal property as may be necessary for the convenient transaction
of its business. It may acquire real estate by foreclosure or upon compromise or
settlement of prior mortgages held by it either as absolute owner or as trustee and
may dispose of the same. No part of the capital, deposits, trust funds, or property
owned or held by it, in trust or otherwise, may be invested in real estate except as
herein authorized, unless the investment is made under and by virtue of a particular
contract, or instrument, or order, judgment, or decree of court, which confers a special
power or authority so to do, and then only with, or to the extent of, the moneys or
funds thereby provided and belonging to such particular trust. Such corporation is
authorized to purchase notes, bonds, mortgages, and other evidences of
indebtedness, and other securities, subject to the limitations imposed upon banking
associations as to investments, and to convert the same into cash and other
securities.
2. Act as trustee under will, agreement, court order, or otherwise, and act as fiscal agent
and transfer agent.
3. Take, accept, and hold on deposit for savings account or for safekeeping, or in escrow,
or for investment, any and all moneys, bonds, stocks, and other securities, or personal
property whatsoever. When any savings deposit has been received from a minor, the
repayment of the deposit to the minor or the minor's order is a complete discharge of
such corporation from any further liability therefor. Whenever any officer or person,
public or private, or any fiduciary, is authorized to pay into or deposit in any court any
moneys, securities, or personal property whatsoever, the same instead of being
deposited with or paid into court may be paid into or deposited with any corporation
organized and acting under this chapter which may be designated for that purpose by
the court having jurisdiction of the subject matter, or by the person owning or
controlling such property. Whenever any fiduciary deposits any moneys, securities, or
any personal property whatsoever, belonging to the fiduciary's trust, with any
corporation qualified and acting under this chapter and takes a receipt of such
corporation therefor, the fiduciary and the fiduciary's sureties thereafter are relieved
from all liability therefor until the same again shall be delivered to the fiduciary by such
corporation.
4. Act as assignee, receiver, administrator, executor, guardian, or conservator.
5. Provide by its bylaws and regulations for the payment of interest or dividends, for the
investment of moneys, and conditions for repaying or withdrawing the same. It may
borrow money upon the security of its own property or credit.
6. Act as agent and attorney in fact in all respects as a natural person could do.
7. Make, compile, and certify abstracts of title of real estate upon the conditions
prescribed by the laws of this state relating to abstracters to ensure the validity and
genuineness of titles to real property.
8. Notwithstanding any other provision of law and subject to approval by the state
banking board, engage in any fiduciary activity in which a federally chartered financial
institution that is granted fiduciary powers may engage.
Page No. 4
6-05-08.1. Issuance of certificates of deposit - Penalty.
Repealed by S.L. 1991, ch. 82, § 7.
6-05-09. Savings, investment, and trust property - Separate accounts.
Whenever any sum or sums of money, or any real or personal property, has been received
by, deposited with, or conveyed to be held by such a corporation for savings or investment
account, or in trust under any of the provisions of subsection 1, 2, 3, or 4 of section 6-05-08,
such money or property, and all evidences of the investment of the same, and their accretions,
must be kept by such corporation separate and apart and readily identified from similar property
of its own or of other persons, and the same is not liable for any debt or claim against the
corporation, except for debts or claims accruing to and in favor of the person or persons making
such deposits or creating such trusts, or the beneficiaries thereunder.
6-05-10. Discretionary power of investment - Limitations.
The directors of any such corporation have discretionary power to invest all moneys
received by it on deposit or in trust, and the investment or deposit of which otherwise may not
be limited or directed, in such securities as are herein authorized. The corporation is responsible
to the owners or beneficiaries of such moneys, for the validity, regularity, quality, value, and
genuineness of all such investments and securities at the time said investments are so made,
and for the safekeeping of the evidences and securities thereof. If any special direction,
limitation, agreement, or trust is imposed, made or conferred in and by the order, judgment,
decree, will, contract, deed, conveyance, or other written instrument, as to the particular
manner, or the particular class or kinds of securities, funds, or property, whether real or
personal, in which the moneys must be invested, the corporation shall follow and carry out such
order, judgment, decree, contract, deed, or other written instrument or instruction, and may not
be held liable or responsible for any loss, damage, or injury which may occur to or be incurred
by any person or beneficiary by reason of its proper performance of such trust, and the
directions or limitations thereof.
6-05-11. Bond not required - Power to be surety on judicial bonds - Deposit of
securities.
No bond or other security, oath, or other qualification is necessary to enable such
corporation to accept any appointment or trust. It is lawful for any such corporation to become
surety upon any bond or undertaking for or on behalf of any person, persons, or corporation, in
any suit, action, or special proceeding, in any court in this state. Whenever a bond or new
sureties on a bond may be required from any person, persons, or corporation, acting in any trust
capacity whatever, if the value of the estate or fund is so great that the judge of the court having
jurisdiction of the proceedings deems it inexpedient to require security in the full amount
prescribed by law, the judge may direct that any securities for the payment of moneys belonging
to the estate or fund be deposited, subject to the order of the person acting in such trust
capacity, countersigned by a judge of said court, with any trust company organized and qualified
to do business under the provisions of this chapter. After such deposit has been made, the
judge may fix the amount of the bond with respect to the value of the remainder only of such
estate or fund.
6-05-11.1. Bonds of officers and employees.
An officer or employee of any trust company, before entering upon the person's duties, shall
furnish a bond to the trust company in the sum and upon the conditions as required by the
board of directors in keeping with rules adopted by the state banking board. All bonds must be
approved by the board of directors of the trust company and are subject to the approval of the
commissioner. A record of the approval of the bonds by the board of directors of the trust
company must be made on the records of the trust company and the bonds must be filed with
the commissioner. Stockholders of the trust company are not eligible as bondsmen for the
officers or employees.
Page No. 5
6-05-12. Court bonds not required.
Any such corporation is not required to give any bond or security in connection with the
execution of any trust, or in any suit, action, or special proceeding, during the performance of
any such trust, in any court in this state.
6-05-13. Transfer of trust to corporation.
Any executor, administrator, guardian, conservator, trustee, assignee, or receiver may
resign that person's trust in favor of a corporation organized, acting, and qualified under this
chapter, and thereupon, such corporation may be appointed as trustee by any court having
jurisdiction of the subject matter of such trust upon such terms and conditions as such court
may prescribe.
6-05-14. Compensation - Lien.
For the faithful performance of any trust, duty, obligation, or service imposed or conferred
upon or accepted by any corporation under the provisions of this chapter, it is entitled to receive
a reasonable compensation, or such compensation as may have been fixed by the contract or
agreement of the parties, as well as any and all advances necessarily paid out and expended in
the discharge and performance thereof, and to charge legal interest, as permitted by law, upon
such advances unless otherwise agreed upon. The company has a lien upon all moneys,
securities, and all property of every description which may come into its possession while in the
performance of such trust, for the payment of all sums due or to become due to it for services,
expenses, and advances, and the costs and expenses of enforcing such payment.
6-05-15. Investment of trust funds.
Any sum of money, which is collected or received by any such corporation in its trust
capacity, and which is not required for the purposes of the trust, or which is not to be accounted
for within one year from the date of collection, receipt, or deposit, must be invested by the
corporation as soon as practicable.
In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing the
property for the benefit of another, the trustee shall exercise the judgment and care under the
circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise
in the management of their own affairs, not in regard to speculation but in regard to the
permanent disposition of their funds, considering the probable income as well as the probable
safety of their capital. Within the limitations of the foregoing standard, the trustee is authorized
to acquire and retain every kind of property, real, personal, or mixed, and every kind of
investment, specifically including but not by way of limitation, bonds, debentures, and other
corporate obligations and stocks, preferred or common, including investment trusts, mutual
funds, money market funds, and other similar funds in which the trustee or any of its affiliates
may have a beneficial interest, which persons of prudence, discretion, and intelligence acquire
or retain for their own account, and within the limitations of the foregoing standard, the trustee
may retain property properly acquired without limitation as to time and without regard to its
suitability for original purchase. The net interest and profits of such investments, less the
reasonable charges and disbursements of the corporation in connection therewith, must be
accounted for and paid over as a part of the trust. The net accumulations of interest and profits
likewise must be invested and reinvested as a part of the principal, and such investments must
be received and allowed in the settlement of the trust.
6-05-15.1. Corporate trustee - Investment of trust funds - Commingling funds.
Any trust company may invest all moneys received by it in authorized securities, and shall
be responsible to the owner or beneficiary of a trust for the validity, regularity, quality, value, and
genuineness of these investments and securities so made, and for the safekeeping of the
securities and evidences thereof. When special directions are given in any order, judgment,
decree, will, or other written instrument as to the particular manner or the particular class or kind
of securities or property in which any investment must be made, it shall follow such directions,
and in such case it is not further responsible by reason of the performance of such trust. In all
Page No. 6
other cases it may invest funds held in any trust capacity in authorized securities using its best
judgment in the selection thereof, and shall be responsible for the validity, regularity, quality, and
value thereof at the time made, and for their safekeeping. Whether it be the sole trustee or one
of two or more cotrustees, it may invest in fractional parts of, as well as in whole, securities, or
may commingle funds for investment. If it invests in fractional parts of securities or commingles
funds for investment, all of the fractional parts of such securities, or the whole of the funds so
commingled must be owned and held by the trust company in its several trust capacities, and it
is liable for the administration thereof in all respects as though separately invested. Funds so
commingled for investment must be designated collectively as a common trust fund. It may, in
its discretion, retain and continue any investment and security or securities coming into its
possession in any fiduciary capacity. The foregoing applies as well whether a corporation
trustee is acting alone or with an individual cotrustee.
6-05-15.2. Common trust funds of affiliates.
Notwithstanding the provisions of section 6-05-15, any bank or trust company qualified to
act as fiduciary in this state may:
1. Establish and maintain common trust funds for the collective investment of funds held
in any fiduciary capacity by it or by another bank or trust company which is owned or
controlled by a corporation which owns or controls such bank or trust company.
2. As a fiduciary or cofiduciary, invest funds which it holds for investment in common trust
funds established and maintained pursuant to subsection 1 if such investment is not
prohibited by the instrument, judgment, decree, or order creating such fiduciary
relationship. This section applies to fiduciary relationships now in existence or
hereafter created.
To the extent not inconsistent with the provisions of this section, the provisions of section
6-05-15.1 relating to common trust funds apply to the establishment and maintenance of
common trust funds under this section.
6-05-15.3. Deposit of trust funds awaiting investment or distribution in affiliates.
A bank or trust company qualified to and acting as fiduciary or cofiduciary in this state may
deposit trust funds awaiting investment or distribution in a bank, including, without limitation, a
bank that owns or controls, or that is owned or controlled by a corporation that owns or controls,
the bank or trust company.
6-05-15.4. Multiple offices or places of business - Application to state banking board Hearing.
1. A trust company may establish and maintain for itself and its operating subsidiary
organizations one or more offices or places of business within this state, throughout
the United States, in foreign countries, or in dependencies or insular possessions of
the United States upon written application to the department of financial institutions for
approval from the state banking board. The application must include the information
specified by the board.
2. Notice of the application to establish and maintain an office or place of business must
be published as required by the state banking board.
3. Within ten business days after receipt of the application by the department of financial
institutions, the commissioner shall determine if the application is complete and shall
notify the trust company of the determination. If within the ten business days the
commissioner determines the application is incomplete, the commissioner shall
request the additional information necessary to complete the application. Within ten
days after receipt of the additional information, the commissioner shall notify the trust
company by mail of the commissioner's determination of completeness. Within sixty
days after the date for the mailing of a notice of completeness by the commissioner,
the state banking board either shall approve the application or shall notify the trust
company that a hearing on the application will be required.
Page No. 7
4.
5.
Any hearing required by the state banking board must be commenced and concluded
by issuance of the order of the board within ninety days after the date for the mailing of
a notice of completeness by the commissioner. If the hearing is not concluded within
this ninety-day period, the application is deemed approved by the board.
The state banking board may disapprove the application if it finds, after a hearing:
a. The establishment and maintenance of the office or place of business will
jeopardize the solvency of the trust company; or
b. The operation of more than one office or place of business by the trust company
will place the company in an unsafe and unsound condition.
6-05-15.5. Structure of trust company - Operating subsidiaries - Notice - Hearing Supervision.
1. A trust company may conduct its business directly or through one or more operating
subsidiary organizations, including a limited purpose bank that is established under the
laws of a jurisdiction other than this state. The activities of an operating subsidiary of a
trust company must be limited to those activities in which the trust company itself could
engage.
2. A trust company that desires to establish or acquire an operating subsidiary must
submit a written notification to the department of financial institutions not less than
thirty days before the trust company's investment in the subsidiary organization is
made. The notification must include the information specified by the state banking
board.
3. Within ten business days after receipt of the notification by the department, the
commissioner shall determine if the notice is complete and shall notify the trust
company of the determination. If within the ten business days the commissioner
determines that the notice is incomplete, the commissioner shall request the additional
information necessary to complete the notice. Within ten days after receipt of the
additional information, the commissioner shall notify the trust company by mail of the
commissioner's determination of completeness. The commissioner shall inform the
state banking board of the receipt of a completed notice. Upon expiration of thirty days
from the date for the mailing of a notice of completeness, the trust company's
investment in the operating subsidiary in accordance with its notice is deemed
approved by the state banking board, unless within that thirty-day period the state
banking board has served the trust company with a notice of hearing on the company's
proposed investment.
4. Any hearing required by the state banking board must be commenced and concluded
by the issuance of the order of the board within ninety days after the date for the
mailing of a notice of completeness by the commissioner. If the hearing is not
concluded within the ninety-day period, the investment by the trust company is
deemed approved by the state banking board.
5. The state banking board may prohibit the trust company's investment in an operating
subsidiary organization if it finds after a hearing:
a. The investment will jeopardize the solvency of the trust company; or
b. The operation of the trust company through the subsidiary organization will place
the trust company in an unsafe and unsound condition.
6. The state banking board has the same authority to examine and supervise an
operating subsidiary as exists for the trust company.
6-05-16. Indebtedness of directors - Prohibition and exception - Theft - Penalty.
Such corporation may not loan its funds, moneys, capital, trust funds, or any other property
whatsoever to any director, officer, agent, or other employee thereof, nor may any such director,
officer, agent, or other employee become in any manner indebted to said corporation by means
of any overdraft, promissory note, account, endorsement, guaranty, or other contract
whatsoever unless such indebtedness has been approved or authorized first by the board of
directors, or an investment committee created by it, and such approval entered in the minutes of
the proceedings of such board or committee. Any such director, agent, or employee who
Page No. 8
becomes indebted to said company, contrary to the provisions hereof, is guilty of the crime of
theft to the amount of such indebtedness from the time such indebtedness was created and
must be punished in the manner prescribed by section 12.1-23-05. The execution and delivery
of the official bond of such officer, agent, or employee, or that person's endorsement of
commercial paper, however, may not be considered as an indebtedness for the purpose of this
section.
6-05-17. Corporation subject to court orders - Reports to court.
Every such corporation is subject at all times to the orders, judgments, and decrees of any
court of record from which or under which it has accepted any trust, appointment, or
commission as to such trust, and shall render to the court such itemized and verified accounts,
statements, and reports as may be required by law, or as such court shall order in relation to
any trust.
6-05-18. Annual report to state examiner - Publication.
Repealed by S.L. 1969, ch. 117, § 1.
6-05-19. Fidelity insurance and corporate suretyship - Domestic and foreign
corporations.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-20. Execution and acceptance of bond from surety company - Bond as
compliance with law.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-21. Cost of bond allowable as expense and taxable as costs in suit.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-22. Domestic surety companies and agents must obtain certificate from
insurance commissioner.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-23. Concurrent undertakings permitted - Losses prorated.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-24. Surety company may petition to be relieved from liability - Procedure.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-25. When subscribed capital stock must be paid in.
Repealed by S.L. 2015, ch. 80, § 8.
6-05-26. Increase in capital stock - Action by stockholders - Report to state banking
board.
The capital stock of such a corporation may be increased from time to time by a majority
vote of its stockholders. Such action may be taken at any regularly called general or special
meeting held upon sixty days' notice, when in the notice of such meeting the object thereof has
been set out fully. No such increase of capital stock is valid unless paid in, in cash, and reported
to the state banking board in writing, verified by the oath of the president, secretary, or
managing officer of the corporation.
6-05-27. Commissioner to order increase in security deposit - When.
Whenever it appears to the commissioner, from an examination of the business of any such
corporation, that the deposit made by it, as hereinbefore required, is insufficient to insure the
safety of its deposit, trust, and contingent liabilities, the commissioner shall make an order, as
hereinafter provided, requiring an increase of such deposit. Such company immediately upon
Page No. 9
receipt of such order shall deposit with the commissioner, or a designated agent, other and
further securities of the kind, class, and value designated in section 6-05-04 in an amount
sufficient to comply with said order.
6-05-28. Examination by commissioner - Fees - Power over business, officers, and
employees.
The commissioner shall make a full, true, complete, and accurate examination and
investigation of the affairs of each corporation doing business under this chapter as often as the
commissioner deems necessary. Such examination may be made without previous notice to the
corporation to be examined. Fees for such examinations must be charged by the department of
financial institutions at an hourly rate to be set by the commissioner, sufficient to cover all
reasonable expenses of the department associated with the examinations provided for by this
section. Fees must be paid to the department of financial institutions and deposited in the
financial institutions regulatory fund. The commissioner, in the commissioner's discretion, may
accept, in lieu of any examination authorized or required by this title to be conducted by the
department of financial institutions, the examination that may have been made of such
institution within a reasonable period by the federal reserve bank or federal deposit insurance
corporation, if a copy of such examination is furnished to the commissioner. The commissioner
shall assume and exercise over each such corporation and its business, officers, directors, and
employees all the power and authority conferred upon the commissioner over financial or
moneyed corporations or associations.
6-05-29. Duty of commissioner when examination discloses violation of law.
If it appears to the commissioner from any examination made by the commissioner that any
such corporation has committed a violation of the law or that it is conducting its business in an
unsafe or unauthorized manner, or that the deposit made by it with the department of financial
institutions, as hereinbefore provided, is insufficient to protect the interests of all concerned, the
commissioner, by an order addressed to such corporation, shall direct the discontinuance of
such illegal or unsafe practice, and order it to conform with the requirements of the law or to
make a further deposit with the department of financial institutions in an amount sufficient to
insure the safety of its trusts, deposits, and liabilities. Whenever any corporation refuses to
comply with any such order, or whenever it appears to the commissioner that it is unsafe or
inexpedient for any such corporation to continue to transact business, the commissioner shall
communicate the facts to the attorney general, who thereupon shall institute such proceedings
against any such corporation as the case may require.
6-05-30. Conditions under which foreign corporation may do fidelity and surety
business.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-31. Service on foreign corporation doing fidelity and surety business.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-32. Foreign corporation doing fidelity or surety business to pay tax - To whom
paid - How determined.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-33. Responsibility of fidelity and surety corporation for fraud of bonded officer.
Repealed by S.L. 1983, ch. 332, § 26.
6-05-34. Other code provisions applicable to corporations doing business under this
chapter.
The provisions of title 10, as it may be amended from time to time, governing profit
corporations, and sections 6-01-06, 6-01-09, 6-03-11, 6-03-12, 6-03-27, 6-03-33, 6-03-34,
6-03-35, 6-03-41, 6-03-42, 6-03-51, 6-03-52, 6-03-53, 6-03-54, 6-03-55, 6-03-56, 6-03-57,
Page No. 10
6-03-58, 6-03-61, 6-03-62, 6-03-63, 6-03-64, 6-03-65, 6-03-70, 6-03-72, 6-07-01, 6-07-02,
6-07-04, 6-07-05, 6-07-06, 6-08-03, 6-08-06, 6-08-09, 6-08-14, and 6-08-20 are applicable to
and must be observed by all corporations organized under this chapter, except as to provisions
thereof inconsistent with the provisions of this chapter.
Page No. 11
Disclaimer: These codes may not be the most recent version. North Dakota 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.
