Form CDI-071 "Workers' Compensation Deposit Trust and Security Agreement" - California

What Is Form CDI-071?

This is a legal form that was released by the California Department of Insurance - a government authority operating within California. As of today, no separate filing guidelines for the form are provided by the issuing department.

Form Details:

  • Released on March 1, 2019;
  • The latest edition provided by the California Department of Insurance;
  • Easy to use and ready to print;
  • Quick to customize;
  • Compatible with most PDF-viewing applications;
  • Fill out the form in our online filing application.

Download a fillable version of Form CDI-071 by clicking the link below or browse more documents and templates provided by the California Department of Insurance.

ADVERTISEMENT
ADVERTISEMENT

Download Form CDI-071 "Workers' Compensation Deposit Trust and Security Agreement" - California

Download PDF

Fill PDF online

Rate (4.3 / 5) 85 votes
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
THIS TRUST AND SECURITY AGREEMENT (the “Agreement”) is made and
entered into at
__________________________________________,
California, on
PLACE OF EXECUTION
_____________________
By and among
________________________________,
DATE OF EXECUTION
NAME OF INSURER
an insurer authorized to write workers’ compensation insurance in the State of California
hereinafter called the “Grantor”. The
________________________________________,
NAME AND ADDRESS OF AUTHORIZED FINANCIAL INSTITUTION
authorized to carry on business in the state of California, hereinafter called the “Trustee”
and the Insurance Commissioner of the state of California, hereinafter called the
“Beneficiary.”
WHEREAS, workers’ compensation insurers writing such insurance in the State
of California are authorized to establish a deposit and enter into a trust agreement
concerning such deposit with a bank, savings and loan association or trust company
under section 11691 of the Insurance Code and regulations set forth in Article 9.5,
Subchapter 3, Chapter 5, Title 10, of the California Code of Regulations, and
WHEREAS, said deposit placed pursuant to the requirements set forth in Sections
through 2509.21, Title 10, of the California Code of Regulations, may be retained by a
bank, savings and loan association or trust company duly-licensed in California, and
WHEREAS, the Trustee desires to deposit certain securities constituting the
deposit with qualified depositories located in reciprocal states as those terms are defined
in California Insurance Code Section 1104.9 (herein a “Qualified Depository”); and
WHEREAS, in order for the Trustee to make a deposit of securities in a Qualified
Depository, it must be a bank licensed to do business and located in California and is a
“qualified custodian” as defined in paragraph (1) of subdivision (a) of Section 1104.9 of
the California Insurance Code which maintains deposits of at least Seven Hundred and
Fifty Million Dollars ($750,000,000; and
WHEREAS, the Trustee qualifies as such a bank, savings and loan association or
trust company and is duly- licensed in California,
NOW, THEREFORE, THE PARTIES HEREUNTO AGREE AS FOLLOWS:
ARTICLE I
DEPOSIT AND SECURITY INTEREST
The parties hereby establish a trust account with the Trustee for the sole and
exclusive use and benefit of the Beneficiary upon hereof shall include any successor of
the named Beneficiary. Grantor hereby deposits with Trustee and Trustee hereby
accepts the securities set forth in schedule “A” attached hereto and made a part hereof.
Trustee hereby agrees to hold these securities in the “Deposit”. In accepting said
Deposit, Grantor and Trustee agree to abide by the terms stated herein, the California
1
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
THIS TRUST AND SECURITY AGREEMENT (the “Agreement”) is made and
entered into at
__________________________________________,
California, on
PLACE OF EXECUTION
_____________________
By and among
________________________________,
DATE OF EXECUTION
NAME OF INSURER
an insurer authorized to write workers’ compensation insurance in the State of California
hereinafter called the “Grantor”. The
________________________________________,
NAME AND ADDRESS OF AUTHORIZED FINANCIAL INSTITUTION
authorized to carry on business in the state of California, hereinafter called the “Trustee”
and the Insurance Commissioner of the state of California, hereinafter called the
“Beneficiary.”
WHEREAS, workers’ compensation insurers writing such insurance in the State
of California are authorized to establish a deposit and enter into a trust agreement
concerning such deposit with a bank, savings and loan association or trust company
under section 11691 of the Insurance Code and regulations set forth in Article 9.5,
Subchapter 3, Chapter 5, Title 10, of the California Code of Regulations, and
WHEREAS, said deposit placed pursuant to the requirements set forth in Sections
through 2509.21, Title 10, of the California Code of Regulations, may be retained by a
bank, savings and loan association or trust company duly-licensed in California, and
WHEREAS, the Trustee desires to deposit certain securities constituting the
deposit with qualified depositories located in reciprocal states as those terms are defined
in California Insurance Code Section 1104.9 (herein a “Qualified Depository”); and
WHEREAS, in order for the Trustee to make a deposit of securities in a Qualified
Depository, it must be a bank licensed to do business and located in California and is a
“qualified custodian” as defined in paragraph (1) of subdivision (a) of Section 1104.9 of
the California Insurance Code which maintains deposits of at least Seven Hundred and
Fifty Million Dollars ($750,000,000; and
WHEREAS, the Trustee qualifies as such a bank, savings and loan association or
trust company and is duly- licensed in California,
NOW, THEREFORE, THE PARTIES HEREUNTO AGREE AS FOLLOWS:
ARTICLE I
DEPOSIT AND SECURITY INTEREST
The parties hereby establish a trust account with the Trustee for the sole and
exclusive use and benefit of the Beneficiary upon hereof shall include any successor of
the named Beneficiary. Grantor hereby deposits with Trustee and Trustee hereby
accepts the securities set forth in schedule “A” attached hereto and made a part hereof.
Trustee hereby agrees to hold these securities in the “Deposit”. In accepting said
Deposit, Grantor and Trustee agree to abide by the terms stated herein, the California
1
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
Insurance Code, and Article 9.5, Subchapter 3, Chapter 5, Title 10, of the California
Code of Regulations.
Grantor hereby assigns, pledges and grants to Beneficiary a first and prior
continuing security interest in and on all its rights, title and interest in and on all
securities now or hereafter on deposit in the trust account to secure the payment of all
workers’ compensation insurance transactions in this State. Grantor hereby represents
and warrants that it is the sole beneficial owner of all of the securities in the deposit, free
and clear of any and all liens or encumbrances thereon, except for the lien created by
this Agreement.
ARTICLE II
DUTIES AND POWERS
A.
Trustee agrees to render to the Beneficiary a report, as of December 31st,
and at any time upon the request of the Beneficiary, but in no event to exceed ten (10)
business days from the date of the request, containing an accounting identifying and
listing the deposit. All accounting shall be certified to be true and correct according to
the best information and belief of the Trustee.
B.
Current deposit value for securities shall be lower of par or market, except
that preferred stock and common stock are to be valued at market value. As respects
promissory notes, which are placed on deposit, the Trustee may rely, in good faith, upon
representations of the Grantor as to the deposit value of such notes. All valuations must
be made within thirty (30) days prior to submission of the report. All accounting shall be
certified to be true and correct according to the best information and belief of the
Trustee.
C.
The Trustee shall indemnify the Grantor for any loss, damage or injury
sustained by the Grantor with respect to any securities deposited pursuant to this
Agreement including loss occasioned by employee dishonesty, burglary, robbery, theft or
mysterious disappearance, unless such loss should be caused by nuclear contamination
from a cause other than the industrial use of nuclear energy, expropriation by
governmental authority, war, insurrection or revolution. The Trustee agrees that if there
is a loss of securities in its custody, the Trustee will replace them or the monetary value
thereof, and the monetary value of any loss of rights or privileges resulting from said loss
of securities, within ten (10) business days, unless, pursuant to an agreement with the
Beneficiary extra time is granted, from the date that said securities cannot be accounted
for by the Trustee. Also, immediately upon discovery, the Trustee shall notify the
Beneficiary of the loss and the proposed action to be taken by the Trustee in connection
therewith.
D.
The Trustee agrees to hold said deposits separate from its own assets and
all of the deposits held by it, except where it uses the Federal Reserve Bank book-entry
account, or where it has its own FOSBI system (filing of securities by issuer), or uses a
Qualified Depository. The Trustee may not utilize any intermediary to access the federal
2
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
book-entry system or a qualified depository. In the case of the utilization of federal book-
entry, the Trustee must be a member of the Federal Reserve. In the case of utilization
of a Qualified Depository, the Trustee must go directly to the Qualified Depository. In
using such Qualified Depository, the Trustee herein agrees to and is obligated to
indemnify the Grantor for loss or damage to based upon the actual omissions of its
agent (here the Qualified Depository utilized by the Trustee) so as to protect the
Grantor’s deposit in connection with such transaction. The Trustee agrees that it shall
assume the same responsibility and liability to the Grantor for loss of such securities in
connection with the entrusting to and handling of the securities by the Qualified
Depository, to the same extent that the Trustee would be responsible for its handling of
the securities directly and exclusively. Grantor assigns its rights, if any, to recover from
the Qualified Depository to the Trustee in return for this indemnification and agrees that it
will provide reasonable assistance to the Trustee in order that the Trustee may recover
any loss or liability from the Qualified Depository.
E.
(For use where ownership is evidenced by credit on the books of account
and records in the Federal Reserve Bank.) Said Trustee, in the exercise of its powers as
such Trustee, has caused to be credited in its name on the books and records of the
Federal Reserve Bank the sum of $
________________________,
representing the face
amount of eligible United States Government and Agency securities listed in Schedule
“B” attached hereto and made a part of the Deposit. The Trustee represents to all
parties hereto that such schedule is a true and complete statement of the eligible United
States Government and Agency securities included among the total of such securities
held in a “General” book-entry account maintained in the name of such Trustee on the
books and records of the Federal Reserve Bank as of the close of business on
___________,
20
___.
The Trustee undertakes to clearly indicate in its books and
records the purpose of this deposit.
F.
(For use where ownership is evidenced by credit on the books of account
and records in a Qualified Depository). Said Trustee, in the exercise of its powers as
such Trustee, has caused to be credited in its name on the books and records of
___________________________________________,
a Qualified Depository the sum of
$
_________________________,
representing the face amount of eligible securities listed
in Schedule “C” attached hereto and made a part of the Deposit. The records of the
Qualified Depository shall bear no markings or reference to the Grantor. The Qualified
Depository is located in a reciprocal state as defined in Insurance Code Section 1104.9.
The securities deposited are only those securities registered with the Qualified
Depository. The Trustee represents to all parties hereto that such schedule is a true and
complete statement of the eligible securities included among the total of such securities
held in a “General” book-entry account maintained in the name of such Trustee on the
books and records of the Qualified depository as of the close of business on
___________,
20
___.
The Trustee undertakes to clearly indicate in its books and
records the purpose of this deposit.
G.
Grantor shall submit and Trustee shall accept for deposit such securities,
including preferred and common stock, only in coupon or bearer form, negotiable form,
3
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
in the form of a credit registered to Trustee’s account with a Qualified Depository or
Federal Reserve Bank, registered to the Beneficiary, or in the name of the Trustee, or in
the name of a nominee of such Trustee, or its agent in accordance with the laws of this
State permitting use of nominees. If registered in the Grantors’ name, the securities
must be accompanied by a power of attorney and a board of directors resolution on
forms approved by the Beneficiary, as set forth in the Beneficiary’s Securities
Transaction Instructions, and as required by section 2509.15, Title 10, of the California
Code of Regulations.
H.
Grantor agrees to submit for deposit only such securities as are acceptable
for deposit pursuant to Article 9.5, Subchapter 3, Chapter 5, Title 10 of the California
Code of Regulations.
I.
At any time, Grantor may substitute approved securities of at least equal
value for those held by the Trustee or place additional securities on deposit in
accordance with the requirements set forth herein. Grantor shall certify that the
substituted or additional deposit is in compliance with Sections 943, 944, 951, and
11691 of the California Insurance Code and Article 9.5, Subchapter 3, Chapter 5, Title
10 of the California Code of Regulations. The certification shall be signed by (2)
authorized officers of the Grantor and submitted to the Trustee.
Withdrawal without replacement is permitted only with the Beneficiary’s prior
written approval.
The Trustee shall have no responsibilities with respect to the investment and
reinvestment of the property held by it under this Agreement. All sales, purchases,
exchanges or other transactions respecting securities or other property which may be
made by the Trustee for the account of the Grantor shall be made only pursuant to
instructions of the Grantor or of the Grantor’s designated representative. Absent such
instructions, the Trustee shall have no responsibility for the investment or reinvestment
of such property nor liability for any omission to act in the absence of instructions.
Notwithstanding anything contained herein to the contrary, the Trustee shall, upon
written request of the Beneficiary, pursuant to Article I, Chapter 3, Part 3, Division 2 of
the California Insurance Code immediately assigned and deliver to the Beneficiary any
and all securities held in the Deposit or held under the terms of the Agreement. No other
statement or document need be presented by the Beneficiary to the Trustee in order to
withdraw all securities held in the Deposit. Upon receipt of the Beneficiary’s written
instructions, the Trustee shall immediately take any and all necessary steps to transfer
absolutely and unequivocally to the Beneficiary or to its order all right, title and interest in
the securities being withdrawn.
The Grantor and not the Trustee shall be responsible for all property held under
this Agreement paid and/or delivered to any broker or other person specified by Grantor
in such manner as Grantor may direct. The Trustee is directed to sell all fractional
shares received by it unless notified to the contrary by the Grantor. The Trustee shall
not vote proxies. All proxies shall be forwarded to the Grantor.
4
STATE OF CALIFORNIA – DEPARTMENT OF INSURANCE
WORKERS’ COMPENSATION DEPOSIT TRUST AND SECURITY AGREEMENT
CDI-071 (Rev. 05/2020)
The Trustee shall either reinvest net income or distribute it as Grantor may direct
from time to time. The Trustee shall distribute Principal cash as Grantor may direct from
time to time. Securities may likewise be withdrawn pursuant to such direction subject to
the qualification that the Trustee may retain such funds and securities as it determines to
necessary to complete any pending buy or sell transactions and that such withdrawal
complies with the terms of this Agreement. The Trustee shall prepare a monthly
statement, in the usual form for accounts of this type and shall deliver the same to the
Grantor and to any representative designated by Grantor.
J.
The Grantor shall furnish to the Beneficiary and the Trustee its
determination of its current deposit requirements under Section 11691 of the California
Insurance Code, prior to the effective date of this Agreement, and thereafter on the
same basis as reported to the Beneficiary on Schedule P, as of December 31st of each
year.
K.
Written notice of the sale or substitution of any security or the deposit of
additional security as well as an accounting which reflects a deposit value of security
being placed on deposit shall be prepared by the Grantor and signed, sealed and dated
by two (2) authorized officers of the Trustee within ten (10) business days of the
settlement or deposit date.
L.
Trustee will, at all times and without prior notice, make available its books
and records of such Deposit held under this agreement for audit, examination and
inspection by the Grantor or by the Beneficiary.
M.
Grantor hereby directs and Trustee agrees, upon written request of the
Beneficiary, pursuant to Article 1, Chapter 3, part 3, Division 2 of the California
Insurance Code, to immediately assign and deliver to the Beneficiary upon demand any
and all securities deposited in or held under the terms of this Agreement.
N.
Trustee agrees that it shall not and does not have the power to use,
pledge, invest, encumber or subject said Deposit to any lien or claim by Trustee.
O.
Trustee agrees that it shall immediately notify Beneficiary in the event that
a party not a party to this Agreement, tries to seize or make any other demand with
respect to the Deposit, and such act or claim is made known to the Trustee.
ARTICLE III
COMPENSATION, RESIGNATION AND TERMINATION CLAUSES
A.
Other than under the terms of any instrument deposited pursuant to the
terms of this Agreement, Trustee shall not be under any liability for payment of interest
on a deposit made hereunder.
5
Page of 8