§ 1-206. Authorized collateral

   (a) "Fiduciary deposit surety bond" defined. -- In this section, "fiduciary deposit surety bond" means a surety bond that:

   (1) Guarantees the payment of deposited funds awaiting distribution or investment held by a financial institution in a fiduciary capacity; and

   (2) Subject to the terms and conditions of the bond, is irrevocable and absolute.

(b) In general. -- Except as provided in § 6-202 and 6-209 of the State Finance and Procurement Article, if applicable law requires a deposit made by a financial institution to be collateralized, the financial institution may take as collateral for the deposit, in addition to any other permissible collateral, a fiduciary deposit surety bond issued by an insurance company authorized to do business in this State, the claims-paying ability of which is rated in the highest category by at least two nationally recognized statistical rating agencies.

HISTORY: 1994, ch. 588.