{"data":{"id":"us-ok/okla.-stat.-tit.-36-36-1628","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 36, § 36-1628","heading":"Definitions - Deposit of securities - Custodial","body":"responsibilities.\n\nA. As used in this section:\n\n1. \"Agent\" shall mean a national bank, state bank, or trust\n\ncompany which maintains an account in its name in a clearing\n\ncorporation or which is a member of the Federal Reserve System and\n\nthrough which a custodian participates in a clearing corporation or\n\nthe Federal Reserve book-entry system, except that with respect to\n\nsecurities issued by institutions organized or existing under the\n\nlaws of any foreign country or securities used to meet the deposit\n\nrequirements pursuant to the laws of a foreign country as a\n\ncondition of doing business therein, \"agent\" may, with the prior\n\napproval of the Commissioner, include a corporation which is\n\norganized or existing under the laws of any foreign country and\n\nwhich is legally qualified under such law to accept custody of\n\nsecurities;\n\n2. \"Clearing corporation\" shall mean a corporation as defined\n\nin paragraph (5) of subsection (a) of Section 8-102 of Title 12A of\n\nthe Oklahoma Statutes which is organized for the purpose of\n\neffecting transactions in securities by computerized book-entry,\n\nexcept that with respect to securities issued by institutions\n\norganized or existing under the laws of any foreign country or\n\nsecurities used to meet the deposit requirements pursuant to the\n\nlaws of a foreign country as a condition of doing business therein,\n\n\"clearing corporation\" may include a corporation which is organized\n\nor existing under the laws of any foreign country and which is\n\nlegally qualified under such laws to effect transactions in\n\nsecurities by computerized book-entry. The term “clearing\n\ncorporation” also includes “Treasury/Reserve Automated Debt Entry\n\nSecurities System” and “Treasury Direct” book-entry securities\n\nsystems established pursuant to 31 U.S.C., Section 3100 et seq., 12\n\nU.S.C. pt. 391 and 5 U.S.C. pt. 301. Clearing corporations shall\n\nhave been approved for use by the Commissioner;\n\n3. \"Commissioner\" shall mean the Insurance Commissioner of the\n\nState of Oklahoma or an authorized representative;\n\n4. \"Custodian\" shall mean a national bank, state bank, or trust\n\ncompany which has at all times aggregate capital, surplus, and\n\nundivided profits of not less than Five Hundred Thousand Dollars\n\n($500,000.00) and which is regulated by either state banking laws or\n\nis a member of the Federal Reserve System and which is legally\n\nqualified to accept custody of securities in accordance with the\n\nstandards set forth below, or a broker-dealer as defined by Section\n\n1-102 of Title 71 of the Oklahoma Statutes that is registered with\n\nand subject to the jurisdiction of the Securities and Exchange\n\nCommission, maintains membership in the Securities Investor\n\nProtection Corporation, and has a tangible net worth equal to or\n\ngreater than Two Hundred Fifty Million Dollars ($250,000,000.00),\n\nexcept that with respect to securities issued by institutions\n\norganized or existing under the laws of any foreign country, or\n\nsecurities used to meet the deposit requirements pursuant to the\n\nlaws of a foreign country as a condition of doing business therein,\n\n\"custodian\" may include a bank, trust company, or similar\n\ninstitution which has at all times aggregate capital, surplus, and\n\nundivided profits of not less than the equivalent of Five Hundred\n\nThousand Dollars ($500,000.00) and which is legally qualified to\n\naccept custody of securities;\n\n5. \"Federal Reserve book-entry system\" shall mean the\n\ncomputerized systems sponsored by the United States Department of\n\nthe Treasury and certain agencies and instrumentalities of the\n\nUnited States for holding and transferring securities of the United\n\nStates government and the agencies and instrumentalities,\n\nrespectively, in Federal Reserve Banks through banks which are\n\nmembers of the Federal Reserve System or which otherwise have access\n\nto the computerized systems; and\n\n6. \"Securities\" shall mean certificated securities and\nnd certain agencies and instrumentalities of the\n\nUnited States for holding and transferring securities of the United\n\nStates government and the agencies and instrumentalities,\n\nrespectively, in Federal Reserve Banks through banks which are\n\nmembers of the Federal Reserve System or which otherwise have access\n\nto the computerized systems; and\n\n6. \"Securities\" shall mean certificated securities and\n\nuncertificated securities as defined in paragraphs (4) and (18) of\n\nsubsection (a) of Section 8-102 of Title 12A of the Oklahoma\n\nStatutes.\n\nB. 1. a. Notwithstanding any other provision of law, a domestic\n\ninsurance company may deposit or arrange for the\n\ndeposit of securities held in or purchased for its\n\ngeneral account and its separate accounts in a\n\nclearing corporation or the Federal Reserve book-entry\n\nsystem. When securities are deposited with a clearing\n\ncorporation, certificates representing securities of\n\nthe same class of the same issuer may be merged and\n\nheld in bulk in the name of the nominee of the\n\nclearing corporation with any other securities\n\ndeposited with the clearing corporation by any person,\n\nregardless of the ownership of the securities, and\n\ncertificates representing securities of small\n\ndenominations may be merged into one or more\n\ncertificates of larger denominations. The records of\n\nany agent through which an insurance company holds\n\nsecurities in the Federal Reserve book-entry system,\n\nand the records of any custodian banks through which\n\nan insurance company holds securities in a clearing\n\ncorporation, shall at all times show that the\n\nsecurities are held for the insurance company and for\n\nwhich accounts thereof.\n\nb. Ownership of, and other interests in, the securities\n\nmay be transferred by bookkeeping entry on the books\n\nof the clearing corporation or in the Federal Reserve\n\nbook-entry system without, in either case, physical\n\ndelivery of certificates representing such securities;\n\nand\n\n2. Notwithstanding any other provision of law, securities\n\neligible for deposit under the Oklahoma Insurance Code relating to\n\ndeposit of securities by an insurance company as a condition of\n\ncommencing or continuing to do an insurance business in this state\n\nmay be deposited with a clearing corporation or held in the Federal\n\nReserve book-entry system and used to meet the deposit requirements\n\nunder the Oklahoma Insurance Code and shall be under the control of\n\nthe Commissioner and shall not be withdrawn by the insurance company\n\nwithout the approval of the Commissioner. Any insurance company\n\nholding securities in this manner shall provide to the Commissioner\n\nevidence issued by its custodian or an agent through which the\n\ninsurance company has deposited securities with a clearing\n\ncorporation or held in the Federal Reserve book-entry system,\n\nrespectively, in order to establish that the securities are actually\n\nrecorded in an account in the name of the custodian or agent and\n\nevidence that the records of the custodian or agent reflect that\n\nthe securities are held subject to the order of the Commissioner.\n\nC. 1. An insurance company may, by written agreement with a\n\ncustodian, provide for the custody of its securities with a\n\ncustodian, which securities may be held by the custodian or its\n\nagent or in a clearing corporation or in the Federal Reserve book-\n\nentry system. Securities so held, whether held by the custodian or\n\nits agent or in a clearing corporation or in the Federal Reserve\n\nbook-entry system, are referred to herein as \"custodied securities\";\n\n2. Any such agreement shall be in writing and shall be\n\nauthorized by a resolution of the board of directors of the\n\ninsurance company or of an authorized committee thereof. The terms\n\nof the agreement shall comply with the following:\n\na. certified securities held by the custodian shall be\n\nheld either separate from the securities of the\n\ncustodian and of all of its other customers or in a\nties\";\n\n2. Any such agreement shall be in writing and shall be\n\nauthorized by a resolution of the board of directors of the\n\ninsurance company or of an authorized committee thereof. The terms\n\nof the agreement shall comply with the following:\n\na. certified securities held by the custodian shall be\n\nheld either separate from the securities of the\n\ncustodian and of all of its other customers or in a\n\nfungible bulk of securities as part of a Filing of\n\nSecurities by Issue (FOSBI) arrangement,\n\nb. securities held in a fungible bulk by the custodian\n\nand securities in a clearing corporation or in the\n\nFederal Reserve book-entry system shall be separately\n\nidentified on the custodian's official records as\n\nbeing owned by the insurance company. The records\n\nshall identify which custodied securities are held by\n\nthe custodian or by its agent and which securities are\n\nin a clearing corporation or in the Federal Reserve\n\nbook-entry system. If the securities are in a\n\nclearing corporation or in the Federal Reserve book-\n\nentry system, the records shall also identify where\n\nthe securities are and if in a clearing corporation,\n\nthe name of the clearing corporation and if through an\n\nagent, the name of the agent,\n\nc. all custodied securities that are registered shall be\n\nregistered in the name of the company or in the name\n\nof a nominee of the company or in the name of the\n\ncustodian or its nominee or, if in a clearing\n\ncorporation, in the name of the clearing corporation\n\nor its nominee,\n\nd. custodied securities shall be held subject to the\n\ninstructions of the insurance company and shall be\n\nwithdrawable upon the demand of the insurance company,\n\nexcept that custodied securities used to meet the\n\ndeposit requirements set forth in the Insurance Code\n\nshall, to the extent required by the Code, be under\n\nthe control of the Commissioner and shall not be\n\nwithdrawn by the insurance company without the\n\napproval of the Commissioner,\n\ne. the custodian shall be required to send or cause to be\n\nsent to the insurance company a confirmation of all\n\ntransfers of custodied securities to or from the\n\naccount of the insurance company. In addition, the\n\ncustodian shall be required to furnish the insurance\n\ncompany with reports of holdings of custodied\n\nsecurities at such times and containing such\n\ninformation as may be reasonably requested by the\n\ninsurance company,\n\nf. during the course of the custodian's regular business\n\nhours, any officer or employee of the insurance\n\ncompany, any independent accountant selected by the\n\ninsurance company, and any representative of an\n\nappropriate regulatory body shall be entitled to\n\nexamine, on the premises of the custodian, the\n\ncustodian's records relating to custodied securities,\n\nbut only upon furnishing the custodian with written\n\ninstructions to that effect from an appropriate\n\nofficer of the insurance company,\n\ng. the custodian and its agents shall be required to send\n\nto the insurance company\n\n(1) all reports which they receive from a clearing\n\ncorporation or the Federal Reserve book-entry\n\nsystem on their respective systems of internal\n\naccounting control, and\nh written\n\ninstructions to that effect from an appropriate\n\nofficer of the insurance company,\n\ng. the custodian and its agents shall be required to send\n\nto the insurance company\n\n(1) all reports which they receive from a clearing\n\ncorporation or the Federal Reserve book-entry\n\nsystem on their respective systems of internal\n\naccounting control, and\n\n(2) any reports prepared by outside auditors on the\n\ncustodian's or its agents' internal accounting\n\ncontrol of custodied securities that the\n\ninsurance company may reasonably request,\n\nh. the custodian shall maintain records sufficient to\n\ndetermine and verify information relating to custodied\n\nsecurities that may be reported in the insurance\n\ncompany's annual statement and supporting schedules\n\nand information required in any audit of the financial\n\nstatements of the insurance company,\n\ni. the custodian shall provide, upon written request from\n\nan appropriate officer of the insurance company, the\n\nappropriate affidavits, substantially in the form\n\nprovided in subsections F, G and H of this section,\n\nwith respect to custodied securities,\n\nj. the custodian shall be obligated to indemnify the\n\ninsurance company for any loss of custodied securities\n\noccasioned by the negligence or dishonesty of the\n\ncustodian's officers and employees, or burglary,\n\nrobbery, holdup, theft or mysterious disappearance,\n\nincluding loss by damage or destruction,\n\nk. in the event that there is a loss of custodied\n\nsecurities for which the custodian shall be obligated\n\nto indemnify the insurance company as provided in\n\nsubparagraph j of this paragraph, the custodian shall\n\npromptly replace the securities or the value thereof\n\nand the value of any loss of rights or privileges\n\nresulting from said loss of securities,\n\nl. the agreement may provide that the custodian will not\n\nbe liable for any failure to take any action required\n\nto be taken under the agreement in the event and to\n\nthe extent that the taking of such action is prevented\n\nor delayed by war (whether declared or not and\n\nincluding existing wars), revolution, insurrection,\n\nriot, civil commotion, act of God, accident, fire,\n\nexplosion, stoppage of labor, strikes or other\n\ndifferences with employees, laws, regulations, orders\n\nor other acts of any governmental authority, or any\n\nother cause whatever beyond its reasonable control,\n\nand\n\nm. in the event that the custodian gains entry in a\n\nclearing corporation or in the Federal Reserve book-\n\nentry system through an agent, there shall be an\n\nagreement between the custodian and the agent under\n\nwhich the agent shall be subject to the same liability\n\nfor loss of custodied securities as the custodian,\n\nprovided, however, that, if the agent shall be subject\n\nto regulation under the laws of a jurisdiction which\n\nis different from the jurisdiction the laws of which\n\nregulate the custodian, the Commissioner may accept a\n\nstandard of liability applicable to the agent which is\n\ndifferent from the standard of liability applicable to\n\nthe custodian.\n\nD. A company may loan stocks or obligations held by it pursuant\n\nto the provisions of this act to a broker-dealer registered under\n\nthe Securities Exchange Act of 1934 or a member bank. The loan must\n\nbe evidenced by a written agreement which provides that:\n\n1. The loan will be fully collateralized by cash or obligations\n\nissued or guaranteed by the United States or an agency or an\n\ninstrumentality thereof, and the collateral will be adjusted each\n\nbusiness day during the term of the loan to maintain the required\n\ncollateralization in the event of market value changes in the loaned\n\nsecurities or collateral;\n\n2. The loan may be terminated by the company at any time, and\n\nthe borrower will return the loaned stocks or obligations or their\n\nequivalent within five (5) business days after termination; and\n\n3. The company has the right to retain the collateral or use\nthe term of the loan to maintain the required\n\ncollateralization in the event of market value changes in the loaned\n\nsecurities or collateral;\n\n2. The loan may be terminated by the company at any time, and\n\nthe borrower will return the loaned stocks or obligations or their\n\nequivalent within five (5) business days after termination; and\n\n3. The company has the right to retain the collateral or use\n\nthe collateral to purchase investments equivalent to the loaned\n\nsecurities if the borrower defaults under the terms of the agreement\n\nand the borrower remains liable for any losses and expenses incurred\n\nby the company due to default that are not covered by the\n\ncollateral.\n\nE. An investment may consist of an individual interest in a\n\npool of obligations or a fractional interest in a single obligation\n\nif the certificate of participation or interest or the confirmation\n\nof participation or interest in the investment shall be issued in\n\nthe name of the company or the name of the custodian bank or the\n\nnominee of either and the certificate or confirmation must, if held\n\nby a custodian bank, be kept separate and apart from the investments\n\nof others so that at all times the participation may be identified\n\nas belonging solely to the company making the investment.\n\nF. The following shall be substantially the form of custodian\n\naffidavit for use by a custodian bank where securities entrusted to\n\nits care have not been redeposited elsewhere:\n\nFORM A\n\nCUSTODIAN AFFIDAVIT\n\n(For use by a custodian bank where securities entrusted to its care\n\nhave not been redeposited elsewhere.)\n\nSTATE OF _____________________)\n\n) ss\n\nCOUNTY OF ____________________)\n\n________________________, being duly sworn deposes and says that he\n\nor she is _______________ of ___________________, a banking\n\ncorporation organized under and pursuant to the laws of the _______\n\nwith the principal place of business at __________________________\n\n(hereinafter called the \"bank\"):\n\nThat his or her duties involve supervision of activities of the bank\n\nas custodian and records relating thereto;\n\nThat the bank is custodian for certain securities of _______________\n\n_____________________ having a place of business at ________________\n\n_____________________________________________ (hereinafter called\n\nthe \"insurance company\") pursuant to an agreement between the bank\n\nand the insurance company;\n\nThat the schedule attached hereto is a true and complete statement\n\nof securities (other than those caused to be deposited with The\n\nDepository Trust Company or like entity or a Federal Reserve Bank\n\nunder the Federal Reserve book-entry procedure) which were in the\n\ncustody of the bank for the account of the insurance company as of\n\nthe close of business on _______________; that, unless otherwise\n\nindicated on the schedule, the next maturing and all subsequent\n\ncoupons were then either attached to coupon bonds or in the process\n\nof collection; and that, unless otherwise shown on the schedule, all\n\nsuch securities were in bearer form or in registered form in the\n\nname of the insurance company or its nominee or of the bank or its\n\nnominee, or were in the process of being registered in such form;\n\nThat the bank as custodian has the responsibility for the\n\nsafekeeping of the securities as that responsibility is specifically\n\nset forth in the agreement between the bank as custodian and the\n\ninsurance company; and\n\nThat, to the best of his or her knowledge and belief, unless\n\notherwise shown on the schedule, the securities were the property of\n\nthe insurance company and were free of all liens, claims, or\n\nencumbrances whatsoever.\n\nSubscribed and sworn to\n\nbefore me this ______ day\n\nof________19__\n\n_____________________(L.S.)\n\nVice President (or other\n\nauthorized officer)\n\nG. The following shall be substantially the form of custodian\n\naffidavit for use in instances where a custodian bank maintains\n\nrance company and were free of all liens, claims, or\n\nencumbrances whatsoever.\n\nSubscribed and sworn to\n\nbefore me this ______ day\n\nof________19__\n\n_____________________(L.S.)\n\nVice President (or other\n\nauthorized officer)\n\nG. The following shall be substantially the form of custodian\n\naffidavit for use in instances where a custodian bank maintains\n\nsecurities on deposit with The Depository Trust Company or like\n\nentity:\n\nFORM B\n\nCUSTODIAN AFFIDAVIT\n\n(For use in instances where a custodian bank maintains securities on\n\ndeposit with The Depository Trust Company or like entity.)\n\nSTATE OF _____________________)\n\n) ss\n\nCOUNTY OF ____________________)\n\n________________________, being duly sworn deposes and says that he\n\nor she is _______________ of ___________________, a banking\n\ncorporation organized under and pursuant to the laws of the _______\n\nwith the principal place of business at ____________________\n\n(hereinafter called the \"bank\"):\n\nThat his or her duties involve supervision of activities of the bank\n\nas custodian and records relating thereto;\n\nThat the bank is custodian for certain securities of _______________\n\nwith a place of business at _________________ (hereinafter called\n\nthe \"insurance company\") pursuant to an agreement between the bank\n\nand the insurance company;\n\nThat the bank has caused certain of such securities to be deposited\n\nwith _______________________ and that the schedule attached hereto\n\nis a true and complete statement of the securities of the insurance\n\ncompany of which the bank was custodian as of the close of business\n\non______________________________, and which were so deposited on\n\nsuch date;\n\nThat the bank as custodian has the responsibility for the\n\nsafekeeping of the securities both in the possession of the bank or\n\ndeposited with __________ as is specifically set forth in the\n\nagreement between the bank as custodian and the insurance company;\n\nand\n\nThat, to the best of his or her knowledge and belief, unless\n\notherwise shown on the schedule, the securities were the property of\n\nthe insurance company and were free of all liens, claims, or\n\nencumbrances whatsoever.\n\nSubscribed and sworn to\n\nbefore me this _____day\n\nof _______19__\n\n_____________________(L.S.)\n\nVice President (or other\n\nauthorized officer)\n\nH. The following shall be substantially the form of custodian\n\naffidavit for use where ownership is evidenced by book-entry at a\n\nFederal Reserve Bank:\n\nFORM C\n\nCUSTODIAN AFFIDAVIT\n\n(For use where ownership is evidenced by book-entry at a Federal\n\nReserve Bank.)\n\nSTATE OF _____________________)\n\n) ss\n\nCOUNTY OF ____________________)\n\n________________________, being duly sworn deposes and says that he\n\nis _______________ of the ________________, a banking corporation\n\norganized under and pursuant to the laws of the _________ with the\n\nprincipal place of business at ___________________ (hereinafter\n\ncalled the \"bank\"):\n\nThat his or her duties involve supervision of activities of the bank\n\nas custodian and records relating thereto;\n\nThat the bank is custodian for certain securities of _____________\n\nwith a place of business at ____________________ (hereinafter called\n\nthe \"insurance company\") pursuant to an agreement between the bank\n\nand the insurance company;\n\nThat it has caused certain securities to be credited to its\n\nbook-entry account with the Federal Reserve Bank of ______________\n\nunder the Federal Reserve book-entry procedure; and that the\n\nschedule attached hereto is a true and complete statement of the\n\nsecurities of the insurance company of which the bank was custodian\n\nas of the close of business on __________ which were in a \"General\"\n\nbook-entry account maintained in the name of the bank on the books\n\nand records of the Federal Reserve Bank of __________________ at\n\nthat date;\n\nThat the bank has the responsibility for the safekeeping of the\nched hereto is a true and complete statement of the\n\nsecurities of the insurance company of which the bank was custodian\n\nas of the close of business on __________ which were in a \"General\"\n\nbook-entry account maintained in the name of the bank on the books\n\nand records of the Federal Reserve Bank of __________________ at\n\nthat date;\n\nThat the bank has the responsibility for the safekeeping of the\n\nsecurities both in the possession of the bank or in the \"General\"\n\nbook-entry account as is specifically set forth in the agreement\n\nbetween the bank as custodian and the insurance company; and\n\nThat, to the best of his or her knowledge and belief, unless\n\notherwise shown on the schedule, the securities were the property\n\nof the insurance company and were free of all liens, claims, or\n\nencumbrances whatsoever.\n\nSubscribed and sworn to\n\nbefore me this ____ day\n\nof __________ 19__\n\n__________________(L.S.)\n\nVice President (or other\n\nauthorized officer)","path":["OK Code","Title 36"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os36.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"c86e9b091105bdb7dbf1533a30e45ad8550516767262536ad0791826addc70c1","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-36-36-1627","next":"us-ok/okla.-stat.-tit.-36-36-1629"},"notice":"GroundRules: Original legal text. Not legal advice."}