60A.10 DEPOSITS FOR PROTECTION OF POLICYHOLDERS.
Subdivision 1. Domestic companies.
(1) Deposit as security for all policyholders
No company in this state, other than farmers' mutual, or real estate title insurance
companies, shall do business in this state unless it has on deposit with the commissioner, for the
protection of both its resident and nonresident policyholders, securities to an amount, the actual
market value of which, exclusive of interest, shall never be less than $500,000 or one-half the
applicable financial requirement set forth in sections
, whichever is
less. The securities shall be retained under the control of the commissioner as long as any policies
of the depositing company remain in force.
(2) Securities defined.
For the purpose of this subdivision, the word "securities" means
bonds or other obligations of, or bonds or other obligations insured or guaranteed by, the
United States, any state of the United States, any municipality of this state, or any agency
or instrumentality of the foregoing.
(3) Protection of deposit from levy.
No judgment creditor or other claimant may levy upon
any securities held on deposit with, or for the account of, the commissioner. Upon the entry of an
order by a court of competent jurisdiction for the rehabilitation, liquidation or conservation of any
depositing company as provided in chapter 60B, that company's deposit together with any accrued
income thereon shall be transferred to the commissioner as rehabilitator, liquidator, or conservator.
Subd. 2. Like requirement for foreign companies.
Any insurance company of any
other state of the United States may file with the commissioner a certificate of the insurance
commissioner of the other state that, as such officer, there is held in trust by the certifying
commissioner and on deposit for the benefit of all the policyholders of the company a deposit of an
amount not less than that required by subdivision 1 in par value of such securities as are required
or permitted to be deposited by the laws of that state, these securities to be of the character in
which insurance companies are authorized to invest under the laws of that state, stating the items
of the securities so held, and that the commissioner is satisfied that these securities are worth the
value so certified. No deposit shall be required in this state while the deposit, so certified, remains.
Subd. 2a. Special deposits.
The commissioner may require a special deposit of an individual
foreign insurer for the protection of its Minnesota policyholders or claimants. In the event of the
filing of a delinquency petition against the insurer in Minnesota, the deposit is subject to chapters
60B, 60C, 61A, and 61B.
Subd. 3. Deposits made in compliance with other laws or by foreign companies.
commissioner shall receive and hold in official trust deposits made by any domestic company
in compliance with the laws of any other state, to enable it to do business in that state, and in
like manner hold deposits made by a foreign company under any law of this state. The company
making the deposit shall be entitled to the income thereof and, from time to time, with the
commissioner's consent, when not inconsistent with the law under which it was made, may
exchange, in whole or in part, the securities composing the deposit for other approved securities
of equal value. Upon application by a domestic company, the commissioner may return the whole
or any portion of the securities so deposited by it, if satisfied that they are subject to no liability.
Upon like application, the commissioner may return to a foreign company any deposit made by it
when it appears that the company has ceased to do business in this state or the United States, and
the commissioner is satisfied that it is not subject to any liability in this state, or upon the order of
any court of competent jurisdiction. A foreign company which has made a deposit, its trustees,
receiver, resident manager, or any creditor or policyholder thereof, may, at any time, institute in
the District Court of Ramsey County an action against the state and other proper parties to enforce
and terminate the trust created by the deposit. The commissioner shall immediately notify the
governor of the action, and furnish the necessary information to answer in behalf of the state, and
shall carry out such order and decree as the court shall make therein.
Subd. 4. Safekeeping of securities on deposit.
No later than July 1, 1975, all securities held
on deposit with the commissioner pursuant to the laws of this state, or in accordance with an order
of the commissioner, shall be deposited for the account of the commissioner in such state or
national bank in this state as the depositing insurer may designate and the commissioner may
approve. Said deposits shall be made and maintained in accordance with a custodial agreement
between the bank and the depositing insurer in a form approved by the commissioner which
shall provide as a minimum that (1) the fees of the custodian are to be the obligation of the
depositing insurer, and (2) there shall be no exchange, release or transfer of any deposited security
unless the commissioner has assented thereto in writing. Securities evidenced by the Federal
Reserve book entry system or held in a clearing corporation, as that term is defined in section
60A.11, subdivision 10
, must be deposited through an approved custodian or the commissioner of
commerce for the account of the commissioner of commerce for the benefit of all policyholders
of the depositor.
Subd. 5.[Repealed, 1969 c 494 s 4
Subd. 6. Rules.
The commissioner of commerce shall have the power to make such rules as
may be necessary for the execution of the functions vested in the commissioner by this section.
History: 1967 c 395 art 1 s 10; 1969 c 494 s 3; 1974 c 425 s 1-3; 1978 c 465 s 4; 1983 c 289
s 114 subd 1; 1984 c 655 art 1 s 92; 1Sp1985 c 10 s 50; 1986 c 444; 1986 c 455 s 5; 1991 c 325
art 10 s 5; 1992 c 540 art 2 s 4; 1999 c 177 s 10; 2005 c 69 art 2 s 18