Sec. 31.04.09.04. Existing Agreements

A. Compliance and Certification Required. For an existing custody agreement entered into before the effective date of this chapter, a carrier shall:

(1) Bring the existing custody agreement into compliance with the requirements of Regulation .03 of this chapter by the earlier of:

(a) The renewal date of the custody agreement; or

(b) 12 months after the effective date of this chapter; and

(2) Certify to the Commissioner that the existing custody agreement has been brought into compliance with the requirements of Regulation .03 of this chapter by the earlier of:

(a) 30 days after the renewal date of the custody agreement; or

(b) 12 months after the effective date of this chapter.

B. Form of Certification. The certification required by §A of this regulation shall be:

(1) Signed by an officer of the carrier; and

(2) In the following form:

"I hereby certify that the custody agreement between (name of carrier) and (name of custodian) has been brought into compliance with the requirements of COMAR 31.04.09. I understand that the Maryland Insurance Administration may verify the accuracy of this certification during a future financial examination.

Name

Title

" Date .

C. Failure to Comply.

(1) If the Commissioner determines that an existing custody agreement has not been brought into compliance with the requirements of Regulation .03 of this chapter within 12 months after the effective date of this chapter, the carrier shall cure the noncompliance within:

(a) 60 days after notification by the Commissioner; or

(b) An extended cure period authorized by the Commissioner.

(2) If the custody agreement is not cured within the time allowed by the Commissioner, the Commissioner may:

(a) Take any action authorized by Insurance Article, §4-113, Annotated Code of Maryland; or

(b) Require the carrier to report the securities held by the custodian in accordance with the terms of the noncompliant custody agreement as "Assets-Not Admitted".