DAR File No.: 35108
Filed: 08/03/2011 03:51:05 PMNOTICE OF REVIEW AND STATEMENT OF CONTINUATION
Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:
The code citations that relate to this rule are the following: Section 31A-2-201 which gives the commissioner authority to write rules to implement the insurance code, Title 31A; Section 31A-2-206 which gives the commissioner the authority to write rules regarding the receipt and handling of deposited securities; Section 31A-4-108 which allows the commissioner to write rules to safeguard and ensure that they are not loaned to other insurers. Section R590-178-4 of the rule sets standards, guidelines and forms to be used when an insurer transfers their securities to a custodian.
Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:
The rule was amended after receiving comments during a hearing and two comment periods provided prior to putting the changes into effect on 9-19-06. Comments dealt with grammar, a request to reinstate the definition of Federal Reserve Book-entry system, a change to clarify differences between Federal Reserve book-entry system and Clearing Corporation, language to clarify that broker dealers cannot hold securities that are used to meet deposit requirements set forth in Subsection 31a-2-206(2) and a request that changes be made to replace trust-related reports with general terminology that also applies to broker/dealers.
Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:
The rule authorizes domestic insurance companies to utilize modern systems for holding and transferring securities without physical delivery of securities certificates. It also sets standards for national banks, state banks, trust companies and broker/dealers to qualify and operate as custodians for insurance company securities. Without it, insurers could place their investments under risky custodial arrangements, or situations that could threaten the security of the company's assets, and in the end, the security of its insureds. Therefore, this rule should be continued.
The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:
Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201Direct questions regarding this rule to:
- Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov
Authorized by:
Jilene Whitby, Information Specialist
Effective:
08/03/2011
Document Information
- Effective Date:
- 8/3/2011
- Publication Date:
- 09/01/2011
- Filed Date:
- 08/03/2011
- Agencies:
- Insurance,Administration
- Authorized By:
- Jilene Whitby, Information Specialist
- DAR File No.:
- 35108
- Related Chapter/Rule NO.: (1)
- R590-178. Securities Custody.