51A-6A-19. Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy.
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/sd/title-51/chapter-51-6/51a-6a-19·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
For purposes of this section, the capital of a trust company is the total of the aggregate par value of its outstanding shares of capital stock or ownership units, its surplus, and its undivided profits. The minimum capital of a trust company is two hundred thousand dollars. The director may require that the trust company have more capital than the amount specified if the director determines that the amount and character of the anticipated business of the trust company and the safety of the customers so require.
This chapter recognizes that capital for a trust company serves a different purpose than does capital for a bank. It is not intended that capital requirements for trust companies be judged by the same standards as banks. Basic protection for fiduciary clients of a trust company shall be provided by the purchase of a fidelity bond and a director's and officer's liability insurance policy. The bond and insurance shall be in an amount of not less than one million dollars each. The trust company shall give notice of cancellation or nonrenewal of the bond or insurance policy to the director within ten days of the receipt of cancellation or nonrenewal.
Except as may be provided elsewhere in this chapter, no trust company may reduce voluntarily its capital stock or ownership units or surplus below the amount required in this section.