Ga. Comp. R. & Regs. R. 80-13-1-.14 - Service Contracts

(1) A state-chartered trust company may contract with another financial institution or a third party service provider to provide certain services in a principal-agent relationship, provided both parties comply with the applicable rules and regulations of the Department.

(2) Agency relationships shall comport with safety and soundness principles to protect the financial integrity of the trust company and the accounts of its customers.

(3) A state-chartered trust company entering into a service contract with a third party service provider must maintain the following information on file at the trust company and shall not execute a contract with a third party service provider unless this information has been obtained:

(a) A copy of the contract under which the services are provided;

(b) A schedule of fees to be charged for each type of service to be performed;

(c) Written assurance from the third party service provider that:

1. The records of the trust company for which the services are to be performed will be subject to examination and regulation by the department as if the records were maintained by the trust company on its own premises;

2. The records of the trust company in the service provider's possession shall be available to examiners promptly upon receipt of notice;

3. The department shall have the authority to periodically review the internal routine and controls of the service provider to ascertain that the operations are being conducted in a sound manner in keeping with generally accepted trust company procedures and industry standards;

(d) A listing of all reports and printouts which the third party service provider is offering the trust company and the time required, after receipt of notice of examination, to provide those reports in readable form to the examiners; and

(e) Evidence of financial stability to include a copy of the third party service provider's most recent audit and financial statement, both of which should be aged no more than 18 months. This is a continuous requirement.

(4) A state-chartered trust company contracting with a third party service provider must employ good faith efforts to monitor the financial condition of the service provider and must notify the department immediately when it discovers or suspects that the service provider is insolvent or has suffered significant financial losses that threaten the continuing viability of the third party service provider.

(5) If a state-chartered trust company is required to disclose a service contract to a federal regulator, a duplicate of such disclosure will simultaneously be submitted to the Department.

(6) This rule is not intended to apply to non-fiduciary or non-representative capacity related operational or administrative functions which do not tend to impact the safety and soundness of the trust company or the accessibility to the Department of records.

Notes

Ga. Comp. R. & Regs. R. 80-13-1-.14

O.C.G.A. § 7-1-61.

Original Rule entitled "Service Contracts" adopted. F. July 7, 2023; eff. July 27, 2023.