31.04.09.01

.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Agent.

(a) "Agent" means:

(i) A qualified bank or qualified broker/dealer that maintains an account in its name in a clearing corporation or that is a member of the Federal Reserve System and through which a custodian participates in a clearing corporation; or

(ii) With respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to accept custody of securities.

(b)"Agent" includes a subcustodian.

(2) "Carrier" means:

(a) A domestic insurer;

(b) A nonprofit health service plan;

(c) A dental plan organization;

(d) A health maintenance organization; or

(e) A managed care organization.

(3) Clearing Corporation.

(a) "Clearing corporation" means:

(i) A corporation, as defined in Commercial Law Article, §8-102(a)(5), Annotated Code of Maryland, that is organized for the purpose of effecting transactions in securities by computerized book-entry; or

(ii) With respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to effect transactions in securities by computerized book-entry.

(b) "Clearing corporation" includes:

(i) Treasury Direct; and

(ii) The Treasury/Reserve Automated Debt Entry System.

(4) "Custodian" means a qualified bank, qualified broker/dealer, or clearing corporation that:

(a) Accepts deposits of securities from carriers; and

(b) Safeguards, holds, and reports on the securities under a written custodial agreement with the carrier.

(5) "Custodied securities" means securities held:

(a) By a custodian or its agent; or

(b) In a clearing corporation.

(6) "Qualified bank" means:

(a) A bank, trust company, or federal home loan bank that:

(i) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by United States banking regulators;

(ii) Is regulated by either state banking laws or is a member of the Federal Reserve System; and

(iii) Is legally qualified to accept custody of securities in accordance with this chapter; or

(b) With respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a bank or trust company incorporated or organized under the laws of a country other than the United States that:

(i) Is regulated as a bank or trust company by that country's government or an agency of that country's government;

(ii) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by international banking authorities; and

(iii) Is legally qualified to accept custody of securities.

(7) "Qualified broker/dealer" means a securities firm that:

(a) Has a tangible net worth of at least $250,000,000 as evidenced by its most recent audited financial statement;

(b) Is registered with and subject to the jurisdiction of the Securities and Exchange Commission; and

(c) Maintains at all times Securities Investor Protection Corporation excess insurance coverage equal to or greater than the market value of the carriers' securities maintained with the broker/dealer.

(8) "Registered form" has the meaning stated in Commercial Law Article, §8-102(a)(13), Annotated Code of Maryland.

(9) Security.

(a) "Security" has the meaning stated in Commercial Law Article, §8-102(a)(15), Annotated Code of Maryland.

(b) "Security" includes:

(i) A certificated security as defined by Commercial Law Article, §8-102(a)(4), Annotated Code of Maryland; and

(ii) An uncertificated security as defined by Commercial Law Article, §8-102(a)(18), Annotated Code of Maryland.

(10) "Treasury Direct" means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. §301, 12 U.S.C. §391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart C.

(11) "Treasury/Reserve Automated Debt Entry System (TRADES)" means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. §301, 12 U.S.C. §391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart B.