[§431:4F-105]  Requirements for trustagreement.  (a)  The terms of the trust agreement required by section431:4F-103 shall be set forth in a deed of trust.  The deed of trust and allsubsequent amendments shall be authenticated in a form and manner as thecommissioner may prescribe and shall not be effective unless approved by thecommissioner upon a finding that:

(1)  A deed of trust or its amendments are sufficientin form and in conformity with law;

(2)  The trustee or trustees are eligible as such; and

(3)  The deed of trust is adequate to protect theinterests of the beneficiaries of the trust.

(b)  If at any time after reasonable notice andhearing, the commissioner finds that the requisites for the approval no longerexist, the commissioner may withdraw approval.

(c)  The commissioner may approve modificationsof, or variations in any deed of trust, which in the commissioner's judgmentare not prejudicial to the interests of the people of this State orpolicyholders and creditors in the United States, of the United States branch.

(d)  The deed of trust shall contain provisionsthat:

(1)  Vest legal title to trusteed assets in thetrustee or trustees, and their lawfully appointed successors;

(2)  Require that all assets deposited in the trustshall be continuously kept within Hawaii;

(3)  Provide for substitution of a new trustee ortrustees in case of a vacancy by death, resignation, or otherwise, subject tothe approval of the commissioner;

(4)  Require that the trustee or trustees shallcontinuously maintain a record at all times sufficient to identify the assetsof such fund;

(5)  Require that the trusteed assets shall consist ofcash or investments, or both, as permitted by article 6 for investment of thefunds of domestic insurers and accrued interest thereon if collectable by thetrustee;

(6)  Require that the trust shall be for the exclusivebenefit, security, and protection of the policyholders, or policyholders andcreditors in the United States, of the United States branch;

(7)  Require that the trust shall be maintained aslong as there is any outstanding liability of the alien insurer arising out ofits insurance transactions in the United States; and

(8)  Provide, in substance, that no withdrawals ofassets, other than income as specified in subsection (e) shall be made orpermitted by the trustee or trustees without the approval of the commissionerexcept to:

(A)  Make deposits required by law in any statefor the security or benefit of all policyholders, or policyholders andcreditors in the United States, of the United States branch;

(B)  Substitute other assets permitted by lawand at least equal in value and quality to those withdrawn, upon the specificwritten direction of the United States branch manager when duly empowered and actingpursuant to either general or specific written authority previously given ordelegated by the board of directors; or

(C)  Transfer such assets to an officialliquidator or rehabilitator pursuant to an order of a court of competentjurisdiction.

(e)  The deed of trust may provide that income,earnings, dividends, or interest accumulations of the assets of the fund may bepaid over to the United States branch manager of the United States branch uponrequest; provided that the total trusteed assets shall not be less than theamount required to be maintained pursuant to section 431:4F-104.

(f)  Upon withdrawal of trusteed assetsdeposited in another state in which the insurer is authorized to do business,it shall be sufficient if the deed of trust requires similar written approvalof the insurance supervising official of that state in lieu of approval of thecommissioner; provided that the total trusteed assets shall not be less thanthe amount required to be maintained pursuant to section 431:4F-104.  In allsuch cases, the United States branch shall notify the commissioner in writingof the nature and extent of the withdrawal.

(g)  The commissioner may:

(1)  Make examinations of the trusteed assets of anyauthorized United States branch at the insurer's expense; and

(2)  Require the trustee or trustees to file astatement, in such form as the commissioner may prescribe, certifying theassets of the trust fund and the amounts thereof.

(h)  Refusal or neglect of any trustee tocomply with this section shall be grounds for the revocation of the insurer'slicense or the liquidation of its United States branch. [L 2004, c 120, pt of§2]