Collateral Requirements cont’d.Collateral RequirementsCollateral Pledging Requirements – InsuranceCompany Members1. Are required to deliver to the <strong>Bank</strong> or to a <strong>Bank</strong>approvedthird party custodian an amount <strong>of</strong> eligiblecollateral, acceptable to the <strong>Bank</strong>, sufficient to satisfythe collateral maintenance level along with any requiredassignment <strong>of</strong> collateral to the <strong>Bank</strong>.2. May not use, commingle, encumber, or dispose <strong>of</strong>collateral that has been assigned <strong>and</strong> delivered withoutthe express written consent <strong>of</strong> the <strong>Bank</strong>.3. Are required to segregate on site <strong>and</strong> mark as property<strong>of</strong> the <strong>Bank</strong> all ancillary documents that pertain tocollateral that has been delivered to the <strong>Bank</strong>.4. Are required to notify the <strong>Bank</strong> <strong>of</strong> the acceptance <strong>of</strong>proceeds from the repayment <strong>of</strong> notes pledged to the<strong>Bank</strong> as collateral. The <strong>Bank</strong> may require the delivery<strong>of</strong> an amount <strong>of</strong> collateral equal to the proceeds <strong>of</strong> therepayment <strong>of</strong> the notes into a collateral account tosecure the member’s indebtedness to the <strong>Bank</strong>.Additional Collateral RequirementsThe <strong>Bank</strong> reserves the right to take any <strong>and</strong> all actions toprotect its security position, assure compliance with thisguide <strong>and</strong> to safeguard members’ investment in the <strong>Bank</strong>should the <strong>Bank</strong> identify potential risks. Such actions mayinclude, but are not limited to, requiring the delivery <strong>of</strong>additional collateral, whether or not such additional collateralwould be deemed eligible collateral pursuant to this guide,<strong>and</strong> requiring a member to complete further steps in order toperfect the <strong>Bank</strong>’s security interest in the members’ pledgedcollateral. At the request <strong>of</strong> the <strong>Bank</strong>, each member agreesto execute, deliver to the <strong>Bank</strong> <strong>and</strong>/or record, as applicable,such instruments, assignments <strong>and</strong> other documents, <strong>and</strong>to take other actions necessary or desirable, to evidence,preserve <strong>and</strong>/or protect the security interest <strong>of</strong> the <strong>Bank</strong> inthe collateral.Eligible Assets Held in a Real Estate InvestmentTrust (REIT) <strong>and</strong>/or a Passive Investment Company(PIC), <strong>and</strong>/or Security CorporationAssets <strong>of</strong> a member that have been transferred to a REIT<strong>and</strong>/or PIC, or other separately incorporated subsidiarytypically do not constitute eligible collateral for the <strong>Bank</strong>’spurposes. However, in certain cases the <strong>Bank</strong> may allowa member to include such assets in its collateral pledgeprovided that: (i) with respect to a REIT or PIC, the subsidiarypledges assets that constitute eligible collateral onbehalf <strong>of</strong> the member; <strong>and</strong> (ii) with respect to a securitycorporation, the member pledges the stock certificate(s)that prove its ownership <strong>of</strong> the security corporation, <strong>and</strong> theassets in the security corporation are comprised solely <strong>of</strong>eligible collateral as determined by the <strong>Bank</strong>. All assets <strong>of</strong>a security corporation must be held in safekeeping at the<strong>Bank</strong>. (Before pledging these assets as collateral, pleasecontact the Collateral Department).Please direct any questions regarding the <strong>Bank</strong>’s collateralrequirements to the Collateral Department at 617-292-9729or collateral@fhlbboston.com.collateralMain Telephone: 617-292-9600 • Customer Service: 1-800-358-9709 • Money Desk: 1-800-357-3452 • Relationship Managers, MPF, <strong>and</strong> Housing & Community Investment: 1-888-424-3863 43
Appendices<strong>Federal</strong> <strong>Home</strong> <strong>Loan</strong> <strong>Bank</strong> <strong>of</strong> <strong>Boston</strong> | 800 Boylston Street | 9th floor | <strong>Boston</strong>, MA 02199 | www.fhlbboston.com
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