Washington Code 30B.24.040 – Written statement of principles of trust management required — Contents
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(1) The board of directors of a state trust company shall adopt a written statement of principles of trust management at its first organizational meeting or at a meeting of the board called for that purpose, which it must annually reaffirm by written vote, whether or not such statement is sought to be amended.
Terms Used In Washington Code 30B.24.040
- Account: means the client relationship established with a trust company involving the transfer of funds or property to the trust company, including a relationship in which the trust company acts as trustee, executor, administrator, guardian, custodian, conservator, bailee, receiver, registrar, or agent, but excluding a relationship in which the trust company acts solely in an advisory capacity. See Washington Code 30B.04.005
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Company: includes a bank, trust company, corporation, limited liability company, partnership, association, business trust, or another trust. See Washington Code 30B.04.005
- Department: means the Washington state department of financial institutions. See Washington Code 30B.04.005
- Fiduciary: A trustee, executor, or administrator.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Manager: means a person elected to the board of a limited liability trust company. See Washington Code 30B.04.005
- Officer: means the presiding officer of the board, the principal executive officer, or another officer appointed by the board of a state trust company or other company, or a person or group of persons acting in a comparable capacity for the state trust company or other company. See Washington Code 30B.04.005
- Oversight: Committee review of the activities of a Federal agency or program.
- State: means a state of the United States, the District of Columbia, a territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands. See Washington Code 30B.04.005
- State trust company: means a corporation or a limited liability company organized or reorganized under this title, including a trust company organized under the laws of Washington state before January 5, 2015. See Washington Code 30B.04.005
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trust company: means a state trust company or any other company chartered to act as a fiduciary that is neither a depository institution nor a foreign bank. See Washington Code 30B.04.005
- Trust department: means a division, subdivision, department, or group of officers and employees of a state bank authorized by the board of directors of the state bank to exercise trust powers pursuant to authority of the director granted pursuant to RCW 30A. See Washington Code 30B.04.005
(2) The statement of principles of trust management shall set forth the minimum requirements for sound fiduciary management in the operation of a state trust company. Such minimum requirements shall provide for sound fiduciary practices in the operation of a state trust company and provide safeguards for the protection of fiduciary beneficiaries, principals of agency relationships, creditors, stockholders, and the public, and shall provide for:
(a) Involvement by the board of directors in providing for the establishment and continuing fiduciary operations;
(b) Operation of fiduciary activities separate and apart from every other activity of the state trust company, with trust assets separated from other assets owned by the state trust company, and the assets of each trust account separated from the assets of every other trust account; and
(c) Maintenance of separate books and records for the fiduciary business in sufficient detail to properly reflect all fiduciary activities.
(3) The statement of principles of trust management shall provide that the board of directors, by resolution included in its minutes:
(a) Designate a competent and qualified officer or manager to be responsible for and administer the fiduciary activities of the state trust company;
(b) Define such officer’s or manager’s duties;
(c) Name a trust committee consisting of at least three directors to be responsible for and supervise the fiduciary activities of the state trust company or state banking institution, which shall include, if feasible, one or more directors who are not officers of the state trust company or state banking institution;
(d) Receive reports from such trust committee and record actions taken in its minutes;
(e) Review the examination reports of the state trust company by the department or other applicable financial services regulatory authority having jurisdiction over the state trust company; and
(f) Record all actions taken in its minutes.
(4) Nothing in this section is intended to prohibit the board of directors from authorizing itself to act as the trust committee, or from authorizing itself to appoint additional committees and officers to oversee account administration and the operation of the state trust company and its fiduciary activities.
(5) When such statement provides for delegating duties to a subcommittee or officers, the statement shall indicate that the board and the trust committee remain responsible for the oversight of all trust company and fiduciary activities. Such statement shall also reflect that sufficient reporting and monitoring procedures are required to fulfill this responsibility.
(6) The statement of principles of trust management shall provide that the trust committee:
(a) Meet at least quarterly, and more frequently if considered necessary and prudent to fulfill its supervisory responsibilities;
(b) Approve and document:
(i) The opening of all new fiduciary accounts;
(ii) Purchases and sales of, and changes in, trust assets; and
(iii) The closing of trust and agency relationship accounts;
(c) Provide for a comprehensive review of all new accounts, for which the state trust company or trust department has investment responsibility, promptly following acceptance;
(d) Provide for a review of each fiduciary and agency account, including collective investment funds, at least once during each calendar year, the scope, frequency, and level of review of which should be addressed in appropriate written policies that give consideration to the state trust company’s fiduciary responsibilities, type and size of account, and other relevant factors, including coverage of both administration of the account and suitability of the account’s investments, distinguishing as between the scope and components of discretionary and nondiscretionary reviews;
(e) Keep comprehensive minutes of meetings held and actions taken; and
(f) Make periodic reports to the board of directors of its actions.
(7) The statement of principles of trust management shall also require:
(a) Comprehensive written policies which address all important areas of the state trust company’s fiduciary activities;
(b) Competent legal counsel to advise trust officers and the trust committee on legal matters pertaining to fiduciary activities;
(c) Adequate internal controls, including appropriate controls over fiduciary assets; and
(d) An adequate annual audit of all fiduciary activities by an internal or external auditor, as required by the department, the findings of which, including actions taken as a result of the audit, must be recorded in its minutes.
(8) Notwithstanding subsection (7)(d) of this section, the statement of principles of trust management may provide that, if a state trust company adopts a continuous audit process instead of performing annual audits, such audits may be performed, on an activity-by-activity basis, at intervals commensurate with the level of risk associated with that activity. In such case, the statement must reflect that audit intervals are to be supported and reassessed regularly to ensure appropriateness, given the current risk and volume of the activity.
[ 2019 c 389 § 43.]