Md. Code, Financial Institutions § 1-206
This is the official text of Md. Code, Financial Institutions § 1-206, part of Maryland’s Code, Financial Institutions — regulates banks and lenders.
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§1–206.
Official statutory text
(a) 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) 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.
(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) 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.
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