(HB 1078)

Trust companies, insurance and bond requirements revised.

         ENTITLED, An Act to  revise certain bond and insurance requirements for trust companies.


     Section  1.  That § 51A-6A-18 be repealed.

     Section  2.  That § 51A-6A-19 be amended to read as follows:

     51A-6A-19.   For purposes of this section, the capital of a trust company shall be is the total of the aggregate par value of its outstanding shares of capital stock or ownership units, its surplus, and its undivided profits. The minimum capital of a trust company shall be two hundred thousand dollars. The commission may require that the trust company have more capital than the amount specified if the commission determines that the amount and character of the anticipated business of the trust company and the safety of the customers so require. This chapter recognizes that capital for a trust company serves a different purpose than does capital for a bank. It is not intended that capital requirements for trust companies be judged by the same standards as banks. Basic protection for fiduciary clients of a trust company shall be provided by the purchase of a

surety bond or a fidelity insurance bond , or both , as provided in §   51A-6A-18 . The bond shall be in an amount of not less than one million dollars. Any bond required to be secured by a trust company shall provide that the bonding company providing the bond shall give at least ninety days notice of cancellation or renewal of the bond to the trust company and to the director. Except as

may be provided elsewhere in this chapter, no trust company may reduce voluntarily its capital stock or ownership units or surplus below the amount required in this section.

     Signed February 27, 2002.

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