In General. A trust agreement established to meet the requirements of Regulation .14 of this chapter shall comply with this regulation. Parties to Trust Agreement. A trust agreement shall be entered into between a beneficiary, a grantor, and a trustee, which shall be a qualified U.S. financial institution. A trust agreement shall be established for the sole benefit of the beneficiary. The failure of a trust agreement to identify the beneficiary does not affect any actions or rights that the Commissioner may take or possess under the laws of this State. Trust Account. A trust agreement shall create a trust account into which assets shall be deposited. The assets in the trust account shall be held by the trustee at the trustee's office in the United States. Withdrawal of Assets. A trust agreement shall provide that the beneficiary: May withdraw assets from the trust account at any time, without notice to the grantor, if the beneficiary provides written notice to the trustee; and Is not required to present any other statement or document to withdraw assets, but may be required to acknowledge receipt of withdrawn assets. Governing Law; Trust Agreement Not Subject to Other Conditions. A trust agreement shall: Be subject to and governed by the laws of the state in which the trust is domiciled; and Provide that it is not subject to any conditions outside of the trust agreement. Except as provided in Regulation .17 of this chapter, a trust agreement may not contain references to any other agreement or document. Duties of Trustee. A trust agreement shall require the trustee to: Receive assets and hold the assets in a safe place; Determine that the assets are in a form that the beneficiary, or the trustee on direction of the beneficiary, may negotiate whenever necessary, without consent or signature from the grantor or any other person or entity; Provide to the grantor and the beneficiary a statement of all assets in the trust account on its inception and at least as often as the end of each calendar quarter; Notify the grantor and the beneficiary, within 10 days, of any deposits to or withdrawals from the trust account; On written demand of the beneficiary, immediately take the steps necessary to transfer absolutely all right, title, and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and Allow no substitutions or withdrawals of assets from the trust account, except on: Written instructions from the beneficiary; or Call or maturity of any trust asset if the trustee provides written notice to the beneficiary and pays the proceeds from the asset into the trust account. A trust agreement shall prohibit invasion of the trust corpus to pay compensation to, or reimburse the expenses of, the trustee. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the trust agreement or some other binding agreement, duly approved by the Commissioner, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced. The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct, or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where the draw would be required shall be considered to be negligence, willful misconduct, or both. When Grantor Is Declared Insolvent or Placed into Receivership, Rehabilitation, or Liquidation. Notwithstanding any other provision in a trust agreement, if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the insurance regulatory agency with regulatory oversight of the trust or court of competent jurisdiction directing the trustee to transfer to the insurance regulatory agency with regulatory oversight or other designated receiver all of the assets of the trust fund. The assets shall be applied in accordance with the priority statutes and laws of the state in which the trust is domiciled applicable to the assets of insurance companies in liquidation. If the insurance regulatory agency with regulatory oversight determines that the assets of the trust fund or any part of the assets are not necessary to satisfy claims of the U.S. beneficiaries of the trust, the assets or any part of the assets shall be returned to the trustee for distribution in accordance with the trust agreement. Termination of Trust Account. A trust agreement shall provide that at least 30 days, but not more than 45 days, before termination of the trust account, the trustee shall deliver to the beneficiary and the Commissioner written notice of termination. Valuation and Form of Assets. Either the reinsurance contract or the trust agreement shall stipulate that assets deposited in the trust account shall: Be valued according to their current fair market value; and Consist only of: Cash in U.S. dollars; Certificates of deposit issued by a U.S. bank and payable in U.S. dollars; Investments permitted by the Insurance Article, Annotated Code of Maryland; or Any combination of §I(1)(b)(i)—(iii) of this regulation. Investments in or issued by an entity controlling, controlled by, or under common control with the grantor or the beneficiary of the trust may not exceed 5 percent of total investments. A trust agreement may specify the types of investments to be deposited in the trust account. If a trust agreement is entered into in conjunction with a reinsurance contract covering life, annuities, or accident and health, then the reinsurance contract shall contain the provisions required by this section.