(d) The trust agreement must be clean and unconditional, in that:

1. (1) the trust agreement must stipulate that the beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;
2. (2) no other statement or document need be presented in order to withdraw assets, except the beneficiary may be required to acknowledge receipt of withdrawn assets;
3. (3) the trust agreement must indicate that it is not subject to any conditions or qualifications outside of the trust agreement;
4. (4) the trust agreement cannot contain references to any other agreements or documents; and
5. (5) no reference shall be made to the fact that these funds may represent reinsurance premiums or that such funds have been deposited for any specific purpose.

(f) The trust agreement must provide for the trustee to:

1. (1) receive assets and hold all assets in a safe place;
2. (2) determine that all assets are in such form that the beneficiary or the trustee, upon direction by the beneficiary may, whenever necessary, negotiate any such assets, without consent or signature from the grantor or any other person or entity;
3. (3) furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;
4. (4) notify the grantor and the beneficiary, within 10 days, of any deposits to or withdrawals from the trust account;
5. (5) upon written demand of the beneficiary, immediately take any and all steps necessary to transfer absolutely and unequivocably all right, title and interest in the assets held in the trust account to the beneficiary and deliver physical custody of such assets to such beneficiary; and
6. (6) allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary. This requirement shall not be deemed to prohibit substitutions permitted by section 126.4(c) of this Part.

(k) Notwithstanding the provisions of paragraphs (d)(3), (4) and (5) of this section or section 126.5(a)(5) of this Part, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities and accident and health, where it is customary practice to provide a trust agreement for a specific purpose, then such trust agreement may provide that the ceding company shall undertake to use and apply any amounts drawn upon the trust account, without diminution because of the insolvency of the ceding company or the reinsurer, for the following purposes:

1. (1) to pay or reimburse such ceding company for the reinsurer's share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding company but not recovered from the reinsurer or for unearned premiums due to the ceding company, if not otherwise paid by the reinsurer in accordance with the terms of such agreement;
2. (2) to make payment to the reinsurer of any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the reinsurer's entire “obligations” under the specific reinsurance agreement; or

3. (3) where the ceding company has received notification of termination of the trust account, and where the reinsurer's entire “obligations” under the specific reinsurance agreement remain unliquidated and undischarged 10 days prior to such termination date, to withdraw amounts equal to such obligations and deposit such amounts in a separate account, in the name of the ceding company, in any United States bank or trust company, apart from its general assets, in trust for such uses and purposes specified in paragraphs (1) and (2) of this subdivision as may remain executory after such withdrawal and for any period after such termination date. “ Obligations” within the meaning of this subdivision shall include: The provisions to be included in the trust agreement pursuant to this subdivision may, in lieu thereof, be included in the underlying reinsurance agreement.

   1. (i) losses and allocated loss expenses paid by the ceding company, but not recovered from the reinsurer;
   2. (ii) reserves for losses reported and outstanding;
   3. (iii) reserves for losses incurred but not reported;
   4. (iv) reserves for allocated loss expenses; and
   5. (v) reserves for unearned premiums.