| (a) Fidelity bond or crime policy. A fidelity bond
or crime policy required by any section of this rule must be for an
amount of at least $500,000. The commissioner will consider information
of all interested parties and determine any amount required in excess
of $500,000. The bond or policy must:
(1) obligate the surety to pay any loss of money or
other property the plan or trust sustains because of an act of fraud
or dishonesty by a person covered by the bond or policy, acting alone
or in concert with others; and
(2) be issued by an unaffiliated insurer that holds
a certificate of authority in this state, and that is a corporate
surety company that is an acceptable surety on Federal bonds under
authority granted by the Secretary of the Treasury under 31 U.S. Code
Chapter 93. If the commissioner determines, after reviewing information
from the approved PEO or the plan and trust's board of trustees, that
a fidelity bond or a zero-deductible crime policy is not available
from a qualified unaffiliated insurer that holds a certificate of
authority in this state, the approved PEO or board of trustees may
obtain a fidelity bond or a zero-deductible crime policy from a surplus
lines agent in this state in compliance with Insurance Code Chapter
981, concerning Surplus Lines Insurance, or from a corporate surety
company which is an acceptable surety on Federal bonds under authority
granted by the Secretary of the Treasury under 31 U.S. Code Chapter
93.
(b) Cash deposit. Instead of a fidelity bond or zero-deductible
crime policy, the approved PEO or board of trustees may place on deposit
with a qualified financial institution securities meeting the requirements
of §13.564 of this title (relating to Annual Recalculation; Changes
to Deposit) for the benefit of the commissioner. The deposit must
be maintained in the amount and is subject to the same conditions
required for fidelity coverage under this section. The deposit must
be held for TDI's control and may not be withdrawn or substituted
without the commissioner's approval.
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