1. Notwithstanding any other provision of law, any fiduciary holding securities in its fiduciary capacity and any insurance company with respect to its general account or separate accounts, any bank or trust company holding securities as a custodian or managing agent, and any bank or trust company holding securities as custodian for a fiduciary or insurance company is authorized to deposit or arrange for the deposit of such securities in a clearing corporation, or in a federal reserve bank under book-entry system. When such securities are so 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 by any person, regardless of the ownership of such securities, and certificates of small denomination may be merged into one or more certificates of larger denomination. The records of such fiduciary and the records of such bank or trust company acting as custodian, as managing agent, or as custodian for a fiduciary or insurance company shall at all times show the name of the party for whose account the securities are so deposited. Title to such securities may be transferred by bookkeeping entry on the books of such clearing corporation or federal reserve bank without physical delivery of certificates or documents representing such securities. A bank or trust company so depositing securities pursuant to this section shall be subject to such rules and regulations as the director of the division of finance, and, in the case of national banking associations, the comptroller of the currency, may from time to time issue. An insurance company depositing securities pursuant to this section shall be subject to such rules and regulations as the director of the department of commerce and insurance may from time to time issue. A bank or trust company acting as custodian for a fiduciary or insurance company shall, on demand by the fiduciary or insurance company, certify in writing to the fiduciary or insurance company the securities so deposited by such bank or trust company in such clearing corporation or federal reserve bank for the account of such fiduciary or insurance company. A fiduciary shall, on demand by any party to a judicial proceeding, or on demand by the attorney for such party, certify in writing to such party the securities deposited by such fiduciary in such clearing corporation or federal reserve bank for its account as such fiduciary. This section shall apply to any fiduciary holding securities in its fiduciary capacity, any insurance company with respect to its general account or separate accounts, and to any bank or trust company holding securities as a custodian, managing agent, or custodian for a fiduciary, or insurance company, acting on September 28, 1979, or who, thereafter, may act regardless of the date of the agreement, instrument, or court order by which it is appointed, and regardless of whether or not such fiduciary, insurance company, custodian, managing agent, or custodian for a fiduciary owns capital stock of such clearing corporation. For purposes of this subsection, “clearing corporation” shall also include securities intermediary as that term is defined in section 400.8-102(a)(14).

2. Notwithstanding any other provision of law, the state treasurer may permit bonds standing as security for moneys deposited by him in banking institutions under the provisions of chapter 30 to be deposited in book-entry collateral accounts maintained in a federal reserve bank or other clearing corporation as defined in section 400.8-102, or deposited with a banking institution in safekeeping for the state treasurer under procedures agreed upon by the governor, state auditor and state treasurer. The governor, state auditor and state treasurer shall also agree upon procedures to verify that the bonds are actually recorded in a book-entry collateral account or actually held in safekeeping.

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

3. Securities, of the kind and type in which insurance companies are permitted to invest their funds, deposited in a clearing corporation or in book-entry accounts maintained in a federal reserve bank by an insurance company shall be eligible for deposit under any and all provisions of the insurance laws of this state relating to deposit of securities with the director of the department of commerce and insurance. The director shall establish procedures to verify that the securities are actually recorded in a book-entry account or actually held in safekeeping by a clearing corporation. Such procedures shall also provide that said securities on deposit with the department of commerce and insurance cannot be withdrawn by the insurance company without the approval of the director.