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S.B. 763
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VETOES
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(3) (I) THE INSURER SHALL ENTER INTO A WRITTEN AGREEMENT FOR
ALL TRANSACTIONS AUTHORIZED UNDER THIS SUBSECTION OTHER THAN DOLLAR
ROLL TRANSACTIONS.
(II) THE WRITTEN AGREEMENT SHALL REQUIRE THAT EACH
TRANSACTION TERMINATE NO MORE THAN 1 YEAR FROM ITS INCEPTION OR ON THE
EARLIER DEMAND OF THE INSURER
(III) THE AGREEMENT SHALL BE WITH THE BUSINESS ENTITY
COUNTERPARTY, BUT FOR SECURITIES LENDING TRANSACTIONS, THE AGREEMENT
MAY BE WITH AN AGENT ACTING ON BEHALF OF THE INSURER, IF THE AGENT IS A
QUALIFIED BUSINESS ENTITY, AND IF THE AGREEMENT:
1. REQUIRES THE AGENT TO ENTER INTO SEPARATE
AGREEMENTS WITH EACH COUNTERPARTY THAT ARE CONSISTENT WITH THE
REQUIREMENTS OF THIS SECTION; AND
2. PROHIBITS SECURITIES LENDING TRANSACTIONS UNDER
THE AGREEMENT WITH THE AGENT OR ITS AFFILIATES.
(4) (I) CASH RECEIVED IN A TRANSACTION UNDER THIS SUBSECTION
SHALL BE INVESTED IN ACCORDANCE WITH THIS SUBTITLE AND IN A MANNER THAT
RECOGNIZES THE LIQUIDITY NEEDS OF THE TRANSACTION OR USED BY THE
INSURER FOR ITS GENERAL CORPORATE PURPOSES.
(II) FOR SO LONG AS THE TRANSACTION REMAINS OUTSTANDING,
THE INSURER, ITS AGENT, OR CUSTODIAN SHALL MAINTAIN, AS TO ACCEPTABLE
COLLATERAL RECEIVED IN A TRANSACTION UNDER THIS SUBSECTION, EITHER
PHYSICALLY OR THROUGH THE BOOK ENTRY SYSTEMS OF THE FEDERAL RESERVE,
DEPOSITORY TRUST COMPANY, PARTICIPANTS TRUST COMPANY, OR OTHER
SECURITIES DEPOSITORIES APPROVED BY THE COMMISSIONER:
1. POSSESSION OF THE ACCEPTABLE COLLATERAL;
2. A PERFECTED SECURITY INTEREST IN THE ACCEPTABLE
COLLATERAL; OR
3. IN THE CASE OF A JURISDICTION OUTSIDE THE UNITED
STATES, TITLE TO, OR RIGHTS OF A SECURED CREDITOR TO, THE ACCEPTABLE
COLLATERAL.
(5) (I) THE LIMITATIONS OF § 5-507 OF THIS SUBTITLE DO NOT APPLY
TO THE BUSINESS ENTITY COUNTERPARTY EXPOSURE CREATED BY TRANSACTIONS
UNDER THIS SUBSECTION.
(II) FOR PURPOSES OF CALCULATIONS MADE TO DETERMINE
COMPLIANCE WITH THIS SUBSECTION, NO EFFECT WILL BE GIVEN TO THE
INSURER'S FUTURE OBLIGATION TO RESELL SECURITIES, IN THE CASE OF A
REPURCHASE TRANSACTION, OR TO REPURCHASE SECURITIES, IN THE CASE OF A
REVERSE REPURCHASE TRANSACTION.
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- 4138 -
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