OAR 836-027-0360
Type of Borrower, Investment of Collateral, Valuation and Reporting
(1)
The borrower must be a registered securities broker or a bank or trust company or registered as a primary dealer of government securities with the Federal Reserve System. For purposes of this rule:(a)
“Bank or trust company” means any bank or trust company that is organized under the laws of the United States or any state thereof and is regularly examined pursuant to such laws; and(b)
“Registered securities broker” means a securities broker registered under the federal Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).(2)
For so long as a securities lending transaction remains outstanding, the insurer, its agent or custodian shall maintain, as to acceptable collateral received in the transaction, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company or other securities depositories approved by the Director:(a)
Possession of the acceptable collateral;(b)
A perfected security interest in the acceptable collateral; or(c)
In the case of a jurisdiction outside the United States, title to, or rights of a secured creditor to, the acceptable collateral.(3)
If the insurer has investment discretion concerning the collateral, the collateral may be invested only in assets with a maturity date no later than one year from date of purchase, and that, if held directly by the insurer, would qualified as admitted assets pursuant to ORS Chapter 733 (Accounting and Investments).(4)
Each securities lending transaction and investment of the collateral must comply with ORS 733.730 (Approval by board of directors of investments and deposits) and 733.740 (Record of investments required).(5)
The valuation procedures as prescribed in the “Valuations of Securities” manual of the National Association of Insurance Commissioners shall be used to value loaned securities in any financial statements filed by the insurer with the Director.(6)
In any financial statements filed by the insurer with the Director, the securities lending transaction shall be reported as designated by the Director in accordance with Statement of Statutory Accounting Principles No. 18. An insurer shall file with its annual statement a supporting schedule that reports such transactions as required by the annual statement filing instructions.(7)
In situations in which the securities are held outside the State of Oregon, the securities must be held by a bank or trust company in accordance with OAR 836-027-0200 (Custodial Arrangements).(8)
The insurer shall maintain within this state original copies of all agreements to lend securities and any attachments, amendments or exhibits thereto. A current inventory of all loaned securities containing the identity of and location of all collateral shall be maintained within the State of Oregon. In addition, adequate records shall be maintained within the State of Oregon to verify the insurer’s activities in loaned securities and the possession of the necessary collateral.
Source:
Rule 836-027-0360 — Type of Borrower, Investment of Collateral, Valuation and Reporting, https://secure.sos.state.or.us/oard/view.action?ruleNumber=836-027-0360.