§580. Insurance coverage
A. A trust company shall obtain and maintain adequate insurance against loss, expense, and liability resulting from errors, omissions, or neglect in the performance of any trust which may be lawfully imposed upon and accepted by the trust company.
B. The board of a trust company shall require protection and indemnity for clients, in reasonable amounts, against dishonesty, fraud, defalcation, forgery, theft, and other similar insurable losses, with a corporate insurance or surety company that is authorized to do business in this state, and that is acceptable to the commissioner. The policy shall cover each executive officer, trust officer, or other employee who handles cash or securities of the trust company. No employee shall be permitted to enter upon the duties of their offices or employment until fidelity bond coverage has been secured. The bond shall be in an amount determined by the board of directors of the trust company and may be required to be within guidelines set forth by the commissioner.
C. Except as otherwise provided herein, coverage required under this Section must include each director, manager, managing participant, officer, and employee of the trust company without regard to whether the person receives salary or other compensation.
D. A trust company may apply to the commissioner for permission to eliminate the bonding requirement of this Section for a particular individual.
Acts 2003, No. 573, §1, eff. June 27, 2003.
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