Conditions
and
Limitations
General
Exclusions -
Applicable to All Insuring
|
|
h.
|
loss
resulting from dishonest acts by any member of the Board of Directors or Board of Trustees of the ASSURED who is not an Employee,
acting alone or in collusion with others;
|
Clauses
|
|
|
|
(continued)
|
|
i.
|
loss,
or that part of any loss, resulting solely from any violation by the ASSURED or by any Employee:
|
|
|
|
|
|
|
|
(1) of
any law regulating:
|
|
|
|
|
|
|
|
a. the
issuance, purchase or sale of securities,
|
|
|
|
|
|
|
|
b. securities
transactions on security or commodity exchanges or the over the counter market,
|
|
|
|
|
|
|
|
c. investment
companies,
|
|
|
|
|
|
|
|
d. investment
advisors, or
|
|
|
|
|
|
|
|
(2) of
any rule or regulation made pursuant to any such law; or
|
|
|
|
|
|
|
j.
|
loss
of confidential information, material or data;
|
|
|
|
|
|
|
k.
|
loss
resulting from voice requests or instructions received over the telephone, provided however, this Section 2.k. shall not apply
to INSURING CLAUSE 7. or 9.
|
Specific
Exclusions -
|
3.
|
This
Bond does not directly or indirectly cover:
|
Applicable
To All Insuring
|
|
|
|
Clauses
Except Insuring
Clause 1.
|
|
a.
|
loss
caused by an Employee, provided, however, this Section 3.a. shall not apply to loss covered under INSURING CLAUSE 2.
or 3. which results directly from misplacement, mysterious unexplainable disappearance, or damage or destruction of Property;
|
|
|
|
|
|
|
b.
|
loss
through the surrender of property away from premises of the ASSURED as a result of a
threat:
(1)
to do bodily harm to any natural person, except loss of Property in transit in the custody of any person acting
as messenger of the ASSURED, provided that when such transit was initiated there was no knowledge by the ASSURED of any
such threat, and provided further that this Section 3.b. shall not apply to INSURING CLAUSE 7., or
(2)
to do damage to the premises or Property of the ASSURED;
|
|
|
c.
|
loss
resulting from payments made or withdrawals from any account involving erroneous credits to such account;
|
|
|
|
|
|
|
d.
|
loss
involving Items of Deposit which are not finally paid for any reason provided however, that this Section 3.d. shall
not apply to INSURING CLAUSE 10.;
|
|
|
|
|
|
|
e.
|
loss
of property while in the mail;
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
12 of 19
|
Conditions
and
Limitations
Specific
Exclusions -
Applicable To All Insuring Clauses Except Insuring
Clause 1.
(continued)
|
|
f.
|
loss
resulting from the failure for any reason of a financial or depository institution, its
receiver or other liquidator to pay or deliver funds or other Property to the
ASSURED provided further that this Section 3.f. shall not apply to loss of Property
resulting directly from robbery, burglary, misplacement, mysterious unexplainable
disappearance, damage, destruction or removal from the possession, custody or control
of the ASSURED.
|
|
|
|
|
|
|
g.
|
loss
of Property while in the custody of a Transportation Company, provided
however, that this Section 3.g. shall not apply to INSURING CLAUSE 3.;
|
|
|
|
|
|
|
h.
|
loss
resulting from entries or changes made by a natural person with authorized access to
a Computer System who acts in good faith on instructions, unless such instructions
are given to that person by a software contractor or its partner, officer, or employee
authorized by the ASSURED to design, develop, prepare, supply, service, write or implement
programs for the ASSURED’s Computer System; or
|
|
|
|
|
|
|
i.
|
loss
resulting directly or indirectly from the input of data into a Computer System
terminal, either on the premises of the customer of the ASSURED or under the control
of such a customer, by a customer or other person who had authorized access to the customer’s
authentication mechanism.
|
Specific
Exclusions -
|
4.
|
This
bond does not directly or indirectly cover:
|
Applicable
To All Insuring
|
|
|
Clauses
Except Insuring
Clauses 1., 4., And 5.
|
|
a.
|
loss
resulting from the complete or partial non-payment of or default on any loan whether such loan was procured in good faith
or through trick, artifice, fraud or false pretenses; provided, however, this Section 4.a. shall not apply to INSURING CLAUSE
8.;
|
|
|
|
|
|
|
b.
|
loss
resulting from forgery or any alteration;
|
|
|
|
|
|
|
c.
|
loss
involving a counterfeit provided, however, this Section 4.c. shall not apply to INSURING CLAUSE 5. or 6.
|
Limit
Of Liability/Non-
Reduction And Non-
Accumulation
Of Liability
|
5.
|
At
all times prior to termination of this Bond, this Bond shall continue in force for the limit stated in the applicable sections
of ITEM 2. of the DECLARATIONS, notwithstanding any previous loss for which the COMPANY may have paid or be liable to pay
under this Bond provided, however, that the liability of the COMPANY under this Bond with respect to all loss resulting from:
|
|
|
|
|
|
a.
|
any
one act of burglary, robbery or hold-up, or attempt thereat, in which no Employee
is concerned or implicated, or
|
|
|
|
|
|
|
b.
|
any
one unintentional or negligent act on the part of any one person resulting in damage
to or destruction or misplacement of Property, or
|
|
|
|
|
|
|
c.
|
all
acts, other than those specified in a. above, of any one person, or
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
13 of 19
|
Conditions
and
Limitations
Limit
Of Liability/Non-
Reduction
And Non-
Accumulation
Of Liability
(continued)
|
|
d.
|
any
one casualty or event other than those specified in a., b., or c. above, shall
be deemed to be one loss and shall be limited to the applicable LIMIT OF LIABILITY stated in ITEM 2. of the DECLARATIONS of
this Bond irrespective of the total amount of such loss or losses and shall not be cumulative in amounts from year to year
or from period to period.
|
|
|
|
|
|
All
acts, as specified in c. above, of any one person which
|
|
|
|
|
|
|
i.
|
directly
or indirectly aid in any way wrongful acts of any other person or persons, or
|
|
|
|
|
|
|
ii.
|
permit
the continuation of wrongful acts of any other person or persons
|
|
|
|
|
|
whether
such acts are committed with or without the knowledge of the wrongful acts of the person so aided, and whether such acts are
committed with or without the intent to aid such other person, shall be deemed to be one loss with the wrongful acts of all
persons so aided.
|
Discovery
|
6.
|
This
Bond applies only to loss first discovered by an officer of the ASSURED during the BOND PERIOD. Discovery occurs at the earlier
of an officer of the ASSURED being aware of:
|
|
|
|
|
|
|
a.
|
facts
which may subsequently result in a loss of a type covered by this Bond, or
|
|
|
|
|
|
|
b.
|
an
actual or potential claim in which it is alleged that the ASSURED is liable to a third party,
|
|
|
|
|
|
regardless
of when the act or acts causing or contributing to such loss occurred, even though the amount of loss does not exceed the
applicable DEDUCTIBLE AMOUNT, or the exact amount or details of loss may not then be known.
|
Notice
To Company - Proof - Legal Proceedings Against Company
|
7.
|
a.
|
The
ASSURED shall give the COMPANY notice thereof at the earliest practicable moment, not to exceed sixty (60) days after discovery
of loss, in an amount that is in excess of 50% of the applicable DEDUCTIBLE AMOUNT, as stated in ITEM 2. of the DECLARATIONS.
|
|
|
|
|
|
|
b.
|
The
ASSURED shall furnish to the COMPANY proof of loss, duly sworn to, with full particulars within six (6) months after such
discovery.
|
|
|
|
|
|
|
c.
|
Securities
listed in a proof of loss shall be identified by certificate or bond numbers, if issued with them.
|
|
|
|
|
|
|
d.
|
Legal
proceedings for the recovery of any loss under this Bond shall not be brought prior to the expiration of sixty (60) days after
the proof of loss is filed with the COMPANY or after the expiration of twenty-four (24) months from the discovery of such
loss.
|
|
|
|
|
|
|
e.
|
This
Bond affords coverage only in favor of the ASSURED. No claim, suit, action or legal proceedings shall be brought
under this Bond by anyone other than the ASSURED.
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
14 of 19
|
Conditions
and
Limitations
|
|
|
|
Notice
To Company -
Proof - Legal Proceedings
Against Company
|
|
f.
|
Proof
of loss involving Voice Initiated Funds Transfer Instruction shall include electronic recordings of such instructions.
|
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
Deductible
Amount
|
8.
|
The
COMPANY shall not be liable under any INSURING CLAUSES of this Bond on account of loss unless the amount of such loss, after
deducting the net amount of all reimbursement and/or recovery obtained or made by the ASSURED, other than from any Bond or
policy of insurance issued by an insurance company and covering such loss, or by the COMPANY on account thereof prior to payment
by the COMPANY of such loss, shall exceed the DEDUCTIBLE AMOUNT set forth in ITEM 3. of the DECLARATIONS, and then for such
excess only, but in no event for more than the applicable LIMITS OF LIABILITY stated in ITEM 2. of the DECLARATIONS.
|
|
|
|
|
|
There
shall be no deductible applicable to any loss under INSURING CLAUSE 1. sustained by any
Investment Company.
|
Valuation
|
9.
|
BOOKS
OF ACCOUNT OR OTHER RECORDS
|
|
|
|
|
|
|
The
value of any loss of Property consisting of books of account or other records used by the ASSURED in the conduct of
its business shall be the amount paid by the ASSURED for blank books, blank pages, or other materials which replace the lost
books of account or other records, plus the cost of labor paid by the ASSURED for the actual transcription or copying of data
to reproduce such books of account or other records.
|
|
|
|
|
|
The
value of any loss of Property other than books of account or other records used by the ASSURED in the conduct of its
business, for which a claim is made shall be determined by the average market value of such Property on the business
day immediately preceding discovery of such loss provided, however, that the value of any Property replaced by the
ASSURED with the consent of the COMPANY and prior to the settlement of any claim for such Property shall be the actual
market value at the time of replacement.
|
|
|
|
|
|
In
the case of a loss of interim certificates, warrants, rights or other securities, the production of which is necessary to
the exercise of subscription, conversion, redemption or deposit privileges, the value of them shall be the market value of
such privileges immediately preceding their expiration if said loss is not discovered until after their expiration. If no
market price is quoted for such Property or for such privileges, the value shall be fixed by agreement between the
parties.
|
|
|
|
|
OTHER
PROPERTY
|
|
|
|
|
|
The
value of any loss of Property, other than as stated above, shall be the actual cash value or the cost of repairing
or replacing such Property with Property of like quality and value, whichever is less.
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
15 of 19
|
Conditions
and
Limitations
(continued)
Securities
Settlement
|
10.
|
In
the event of a loss of securities covered under this Bond, the COMPANY may, at its sole
discretion, purchase replacement securities, tender the value of the securities in money,
or issue its indemnity to effect replacement securities.
|
|
The
indemnity required from the ASSURED under the terms of this Section against all loss, cost or expense arising from the replacement
of securities by the COMPANY’S indemnity shall be:
|
|
a.
|
for
securities having a value less than or equal to the applicable DEDUCTIBLE AMOUNT - one
hundred (100%) percent;
|
|
b.
|
for
securities having a value in excess of the DEDUCTIBLE AMOUNT but within the applicable
LIMIT OF LIABILITY - the percentage that the DEDUCTIBLE AMOUNT bears to the value of
the securities;
|
|
c.
|
for
securities having a value greater than the applicable LIMIT OF LIABILITY - the percentage
that the DEDUCTIBLE AMOUNT and portion in excess of the applicable LIMIT OF LIABILITY
bears to the value of the securities.
|
|
The
value referred to in Section 10.a., b., and c. is the value in accordance with Section 9, Valuation, regardless of the
value of such securities at the time the loss under the COMPANY’S indemnity is sustained.
|
The
COMPANY is not required to issue its indemnity for any portion of a loss of securities which is not covered by this Bond; however,
the COMPANY may do so as a courtesy to the ASSURED and at its sole discretion.
The
ASSURED shall pay the proportion of the Company’s premium charge for the Company’s indemnity as set forth in Section
10.a., b., and c. No portion of the LIMIT OF LIABILITY shall be used as payment of premium for any indemnity purchased by the
ASSURED to obtain replacement securities.
Subrogation
- Assignment – Recovery
|
11.
|
In
the event of a payment under this Bond, the COMPANY shall be subrogated to all of the
ASSURED’S rights of recovery against any person or entity to the extent of such
payment. On request, the ASSURED shall deliver to the COMPANY an assignment of the ASSURED’S
rights, title and interest and causes of action against any person or entity to the extent
of such payment.
|
Recoveries,
whether effected by the COMPANY or by the ASSURED, shall be applied net of the expense of such recovery in the following order:
|
a.
|
first,
to the satisfaction of the ASSURED’S loss which would otherwise have been paid
but for the fact that it is in excess of the applicable LIMIT OF LIABILITY,
|
|
b.
|
second,
to the COMPANY in satisfaction of amounts paid in settlement of the ASSURED’S claim,
|
|
c.
|
third,
to the ASSURED in satisfaction of the applicable DEDUCTIBLE AMOUNT, and
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
16 of 19
|
Conditions
and
Limitations
Subrogation
- Assignment –
Recovery
|
d.
|
fourth,
to the ASSURED in satisfaction of any loss suffered by the ASSURED which was not covered
under this Bond.
|
(continued)
Recovery
from reinsurance or indemnity of the COMPANY shall not be deemed a recovery under this section.
Cooperation
Of Assured
|
12.
|
At
the COMPANY’S request and at reasonable times and places designated by the COMPANY,
the ASSURED shall:
|
|
a.
|
submit
to examination by the COMPANY and subscribe to the same under oath,
|
|
b.
|
produce
for the COMPANY’S examination all pertinent records, and
|
|
c.
|
cooperate
with the COMPANY in all matters pertaining to the loss.
|
The
ASSURED shall execute all papers and render assistance to secure to the COMPANY the rights and causes of action provided for under
this Bond. The ASSURED shall do nothing after loss to prejudice such rights or causes of action.
Termination
|
13.
|
If
the Bond is for a sole ASSURED, it shall not be terminated unless written notice shall
have been given by the acting party to the affected party and to the Securities and Exchange
Commission, Washington, D.C., not less than sixty (60) days prior to the effective date
of such termination.
|
If
the Bond is for a joint ASSURED, it shall not be terminated unless written notice shall have been given by the acting party to
the affected party, and by the COMPANY to all ASSURED Investment Companies and to the Securities and Exchange Commission,
Washington, D.C., not less than sixty (60) days prior to the effective date of such termination.
This
Bond will terminate as to any one ASSURED, other than an Investment Company:
|
a.
|
immediately
on the taking over of such ASSURED by a receiver or other liquidator or by State or Federal
officials, or
|
|
b.
|
immediately
on the filing of a petition under any State or Federal statute relative to bankruptcy
or reorganization of the ASSURED, or assignment for the benefit of creditors of the ASSURED,
or
|
|
c.
|
immediately
upon such ASSURED ceasing to exist, whether through merger into another entity, disposition
of all of its assets or otherwise.
|
|
The
COMPANY shall refund the unearned premium computed at short rates in accordance with
the standard short rate cancellation tables if terminated by the ASSURED or pro rata
if terminated for any other reason.
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
17 of 19
|
Conditions
and
Limitations
Termination
(continued)
|
If
any partner, director, trustee, or officer or supervisory employee of an ASSURED not acting in collusion with an Employee
learns of any dishonest act committed by such Employee at any time, whether in the employment of the ASSURED or
otherwise, whether or not such act is of the type covered under this Bond, and whether against the ASSURED or any other person
or entity, the ASSURED:
|
|
a.
|
shall
immediately remove such Employee from a position that would enable such Employee
to cause the ASSURED to suffer a loss covered by this Bond; and
|
|
b.
|
within
forty-eight (48) hours of learning that an Employee has committed any dishonest
act, shall notify the COMPANY, of such action and provide full particulars of such dishonest
act.
|
The
COMPANY may terminate coverage as respects any Employee sixty (60) days after written notice is received by each ASSURED
Investment Company and the Securities and Exchange Commission, Washington, D.C. of its desire to terminate this Bond as
to such Employee.
Other
Insurance
|
14.
|
Coverage
under this Bond shall apply only as excess over any valid and collectible insurance,
indemnity or suretyship obtained by or on behalf of:
|
|
a.
|
the
ASSURED,
|
|
|
|
|
b.
|
a
Transportation Company, or
|
|
c.
|
another
entity on whose premises the loss occurred or which employed the person causing the loss
or engaged the messenger conveying the Property involved.
|
Conformity
|
15.
|
If
any limitation within this Bond is prohibited by any law controlling this Bond’s
construction, such limitation shall be deemed to be amended so as to equal the minimum
period of limitation provided by such law.
|
Change
or Modification
|
16.
|
This
Bond or any instrument amending or affecting this Bond may not be changed or modified
orally. No change in or modification of this Bond shall be effective except when made
by written endorsement to this Bond signed by an authorized representative of the COMPANY.
|
|
|
|
|
|
If
this Bond is for a sole ASSURED, no change or modification which would adversely affect
the rights of the ASSURED shall be effective prior to sixty (60) days after written notice
has been furnished to the Securities and Exchange Commission, Washington, D.C., by the
acting party.
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
18 of 19
|
Conditions
And
Limitations
|
|
|
Change
or Modification
(continued)
|
|
If
this Bond is for a joint ASSURED, no charge or modification which would adversely affect
the rights of the ASSURED shall be effective prior to sixty (60) days after written notice
has been furnished to all insured Investment Companies and to the Securities and
Exchange Commission, Washington, D.C., by the COMPANY.
|
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98)
|
Page
19 of 19
|
|
ENDORSEMENT/RIDER
|
Effective
date of
|
|
|
this
endorsement/rider: May 15, 2021
|
FEDERAL
INSURANCE COMPANY
|
|
|
|
Endorsement/Rider
No.
|
1
|
|
|
|
|
To
be attached to and
form
a part of Bond No.
|
82302721
|
|
Issued
to:
|
FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED
|
DELETING VALUATION-OTHER PROPERTY AND AMENDING CHANGE OR MODIFICATION
ENDORSEMENT
In
consideration of the premium charged, it is agreed that this Bond is amended as follows:
|
1.
|
The
paragraph titled Other Property in Section 9, Valuation, is deleted in its entirety.
|
|
2.
|
The
third paragraph in Section 16, Change or Modification, is deleted in its entirety and
replaced with the following:
|
If
this Bond is for a joint ASSURED, no change or modification which would adversely affect the rights of the ASSURED shall be effective
prior to sixty (60) days after written notice has been furnished to all insured Investment Companies and the Securities
and Exchange Commission, Washington, D.C., by the COMPANY.
The
title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and conditions of coverage.
All
other terms, conditions and limitations of this Bond shall remain unchanged.
|
|
|
Authorized
Representative
|
17-02-2437
(12/2006) rev.
|
Page
1
|
|
|
|
|
ENDORSEMENT/RIDER
|
|
Effective
date of
|
|
this
endorsement/rider: May 15, 2021
|
FEDERAL
INSURANCE COMPANY
|
|
|
|
Endorsement/Rider
No.
|
2
|
|
|
|
|
To
be attached to and
form a part of Policy No.
|
82302721
|
Issued
to:
|
FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED
|
COMPLIANCE
WITH APPLICABLE TRADE SANCTION LAWS
It
is agreed that this insurance does not apply to the extent that trade or economic sanctions or other similar laws or regulations
prohibit the coverage provided by this insurance.
The
title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and conditions of coverage.
All
other terms, conditions and limitations of this Policy shall remain unchanged.
|
|
|
Authorized
Representative
|
14-02-9228
(2/2010)
|
Page
1
|
|
|
|
|
|
FEDERAL
INSURANCE COMPANY
|
|
|
|
Endorsement
No:
|
3
|
|
|
|
|
Bond
Number:
|
82302721
|
NAME
OF ASSURED: FLAHERTY & CRUMRINE TOTAL RETURN FUND INCORPORATED
PREMIUM
ENDORSEMENT
It
is agreed that:
1.
|
The
premium for this Bond for the period May 15, 2021 to May 15, 2022 is:
|
Premium:
One thousand nine hundred sixty seven dollars and 00/100 ($1,967.00)
2.
|
It
is further agreed that this premium is subject to change during this period if amendments
are made to this Bond at the request of the ASSURED.
|
This
Endorsement applies to loss discovered after 12:01 a.m. on May 15, 2021.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date:
May 19, 2021
|
By
|
|
|
|
Authorized
Representative
|
ICAP Bond
Form 17-02-0735 (Rev. 1-97)
|
|
|
|
|
ENDORSEMENT/RIDER
|
Effective
date of
|
|
|
this
endorsement/rider: May 15, 2021
|
FEDERAL
INSURANCE COMPANY
|
|
|
|
Endorsement/Rider
No.
|
4
|
|
|
|
|
To
be attached to and
form a part of Bond No.
|
82302721
|
Issued
to:
|
FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED
|
|
|
AUTOMATIC
INCREASE IN LIMITS ENDORSEMENT
In
consideration of the premium charged, it is agreed that GENERAL AGREEMENTS, Section C. Additional Offices Or Employees-Consolidation,
Merger Or Purchase Or Acquisition Of Assets Or Liabilities-Notice To Company, is amended by adding the following subsection:
Automatic
Increase in Limits for Investment Companies
If
an increase in bonding limits is required pursuant to rule 17g-1 of the Investment Company Act of 1940 (“the Act”),
due to:
|
(i)
|
the
creation of a new Investment Company, other than by consolidation or merger with,
or purchase or acquisition of assets or liabilities of, another institution; or
|
|
(ii)
|
an
increase in asset size of current Investment Companies covered under this Bond,
|
then the minimum required increase in limits shall take place automatically without payment
of additional premium for the remainder of the BOND PERIOD.
The
title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and conditions of coverage.
All
other terms, conditions and limitations of this Bond shall remain unchanged.
|
|
|
Authorized
Representative
|
14-02-14098
(04/2008)
|
Page
1
|
|
|
|
|
ENDORSEMENT/RIDER
|
|
Effective
date of
|
|
this
endorsement/rider: May 15, 2021
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FEDERAL
INSURANCE COMPANY
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Endorsement/Rider
No.
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5
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To
be attached to and
form a part of Policy No.
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82302721
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Issued
to:
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FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED
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PRO
RATA CANCELLATION ENDORSEMENT
In
consideration of the premium charged, it is agreed that, notwithstanding anything to the contrary in the policy or any endorsements
thereto, in the event that this policy is cancelled, any premium refund due to the insured shall be computed on a pro rata basis.
The
cancellation will be effective even if a refund has not been made or offered.
The
title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and conditions of coverage.
All
other terms, conditions and limitations of this Policy shall remain unchanged.
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By
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Authorized
Representative
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14-02-19726
(12/2019)
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Page
1
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268508
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FEDERAL
INSURANCE COMPANY
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Endorsement
No.:
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6
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Bond
Number:
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82302721
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NAME
OF ASSURED: FLAHERTY & CRUMRINE TOTAL RETURN FUND INCORPORATED
EXTENDED
COMPUTER SYSTEMS ENDORSEMENT
It
is agreed that this Bond is amended as follows:
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1.
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By
adding the following INSURING CLAUSE:
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12.
Extended Computer Systems
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A.
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Electronic
Data, Electronic Media, Electronic Instruction
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Loss
resulting directly from:
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(1)
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the
fraudulent modification of Electronic Data, Electronic Media or Electronic
Instruction being stored within or being run within any system covered under this
INSURING CLAUSE,
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(2)
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robbery,
burglary, larceny or theft of Electronic Data, Electronic Media or Electronic
Instructions,
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(3)
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the
acts of a hacker causing damage or destruction of Electronic Data, Electronic Media
or Electronic Instruction owned by the ASSURED or for which the ASSURED is
legally liable, while stored within a Computer System covered under this INSURING
CLAUSE, or
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(4)
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the
damage or destruction of Electronic Data, Electronic Media or Electronic Instruction
owned by the ASSURED or for which the ASSURED is legally liable while stored within
a Computer System covered under INSURING CLAUSE 12, provided such damage or destruction
was caused by a computer program or similar instruction which was written or altered
to intentionally incorporate a hidden instruction designed to damage or destroy Electronic
Data, Electronic Media, or Electronic Instruction in the Computer System
in which the computer program or instruction so written or so altered is used.
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ICAP2
Bond
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Form
17-02-2976 (Ed. 1-02)
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Page
1
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B.
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Electronic
Communication
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Loss
resulting directly from the ASSURED having transferred, paid or delivered any funds or property, established any credit, debited
any account or given any value on the faith of any electronic communications directed to the ASSURED, which were transmitted or
appear to have been transmitted through:
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(1)
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an
Electronic Communication System,
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(2)
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an
automated clearing house or custodian, or
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(3)
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a
Telex, TWX, or similar means of communication,
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directly
into the ASSURED’S Computer System or Communication Terminal, and fraudulently purport to have been sent by a customer,
automated clearing house, custodian, or financial institution, but which communications were either not sent by said customer,
automated clearing house, custodian, or financial institution, or were fraudulently modified during physical transit of Electronic
Media to the ASSURED or during electronic transmission to the ASSURED’S Computer System or Communication Terminal.
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C.
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Electronic
Transmission
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Loss
resulting directly from a customer of the ASSURED, any automated clearing house, custodian, or financial institution having transferred,
paid or delivered any funds or property, established any credit, debited any account or given any value on the faith of any electronic
communications, purporting to have been directed by the ASSURED to such customer, automated clearing house, custodian, or financial
institution initiating, authorizing, or acknowledging, the transfer, payment, delivery or receipt of funds or property, which
communications were transmitted through:
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(1)
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an
Electronic Communication System,
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(2)
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an
automated clearing house or custodian, or
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(3)
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a
Telex, TWX, or similar means of communication,
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directly
into a Computer System or Communication Terminal of said customer, automated clearing house, custodian, or financial
institution, and fraudulently purport to have been directed by the ASSURED, but which communications were either not sent by the
ASSURED, or were fraudulently modified during physical transit of Electronic Media from the ASSURED or during electronic
transmission from the ASSURED’S Computer System or Communication Terminal, and for which loss the ASSURED is held
to be legally liable.
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ICAP2
Bond
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Form
17-02-2976 (Ed. 1-02)
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Page
2
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2.
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By
adding to Section 1., Definitions, the following:
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r.
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Communication
Terminal means a teletype, teleprinter or video display terminal, or similar device
capable of sending or receiving information electronically. Communication Terminal
does not mean a telephone.
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s.
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Electronic
Communication System means electronic communication operations by Fedwire, Clearing
House Interbank Payment System (CHIPS), Society of Worldwide International Financial
Telecommunication (SWIFT), similar automated interbank communication systems, and Internet
access facilities.
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t.
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Electronic
Data means facts or information converted to a form usable in Computer Systems
and which is stored on Electronic Media for use by computer programs.
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u.
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Electronic
Instruction means computer programs converted to a form usable in a Computer System
to act upon Electronic Data.
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v.
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Electronic
Media means the magnetic tape, magnetic disk, optical disk, or any other bulk media
on which data is recorded.
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3.
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By
adding the following Section after Section 4., Specific Exclusions-Applicable to All
INSURING CLAUSES except 1., 4., and 5.:
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Section
4.A. Specific Exclusions-Applicable to INSURING CLAUSE 12
This
Bond does not directly or indirectly cover:
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a.
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loss
resulting directly or indirectly from Forged, altered or fraudulent negotiable
instruments, securities, documents or written instruments used as source documentation
in the preparation of Electronic Data;
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b.
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loss
of negotiable instruments, securities, documents or written instruments except as converted
to Electronic Data and then only in that converted form;
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c.
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loss
resulting from mechanical failure, faulty construction, error in design, latent defect,
wear or tear, gradual deterioration, electrical disturbance, Electronic Media failure
or breakdown or any malfunction or error in programming or error or omission in processing;
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d.
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loss
resulting directly or indirectly from the input of Electronic Data at an authorized
electronic terminal of an Electronic Funds Transfer System or a Customer Communication
System by a person who had authorized access from a customer to that customer’s authentication
mechanism; or
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e.
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liability
assumed by the ASSURED by agreement under any contract, unless such liability would have
attached to the ASSURED even in the absence of such agreement; or
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f.
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loss
resulting directly or indirectly from:
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(1)
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written
instruction unless covered under this INSURING CLAUSE; or
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(2)
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instruction
by voice over the telephone, unless covered under this INSURING CLAUSE.
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ICAP2
Bond
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Form
17-02-2976 (Ed. 1-02)
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Page
3
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4.
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By
adding to Section 9., Valuation, the following:
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Electronic
Data, Electronic Media, Or Electronic Instruction
In
case of loss of, or damage to, Electronic Data, Electronic Media or Electronic Instruction used by the ASSURED in its business,
the COMPANY shall be liable under this Bond only if such items are actually reproduced form other Electronic Data, Electronic Media
or Electronic Instruction of the same kind or quality and then for not more than the cost of the blank media and/or the cost
of labor for the actual transcription or copying of data which shall have been furnished by the ASSURED in order to reproduce such Electronic
Data, Electronic Media or Electronic Instruction subject to the applicable SINGLE LOSS LIMIT OF LIABILITY.
However,
if such Electronic Data can not be reproduced and said Electronic Data represents Securities or financial instruments
having a value, then the loss will be valued as indicated in the SECURITIES and OTHER PROPERTY paragraphs of this Section.
This
Endorsement applies to loss discovered after 12:01 a.m. on May 15, 2021.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date:
May 19, 2021
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By
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Authorized
Representative
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ICAP2
Bond
Form 17-02-2976
(Ed. 1-02)
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Page
4
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FEDERAL
INSURANCE COMPANY
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Endorsement
No.
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7
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Bond
Number:
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82302721
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NAME
OF ASSURED: FLAHERTY & CRUMRINE TOTAL RETURN FUND INCORPORATED
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REVISE
ITEM 2. ENDORSEMENT
It
is agreed that this Bond is amended by deleting ITEM 2. in its entirety on the DECLARATIONS and substituting the following:
ITEM
2. LIMITS OF LIABILITY-DEDUCTIBLE AMOUNTS:
If
“Not Covered” is inserted below opposite any specified INSURING CLAUSE, such INSURING CLAUSE and any other reference
to such INSURING CLAUSE in this Bond shall be deemed to be deleted. There shall be no deductible applicable to any loss under
INSURING CLAUSE 1 sustained by any Investment Company.
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SINGLE LOSS
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DEDUCTIBLE
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INSURING CLAUSE
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LIMIT OF LIABILITY
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AMOUNT
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1.
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Employee
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$
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750,000
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$
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0
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2.
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On Premises
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$
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750,000
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$
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10,000
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3.
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In Transit
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$
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750,000
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$
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10,000
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4.
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Forgery or Alteration
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$
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750,000
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$
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10,000
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5.
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Extended Forgery
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$
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750,000
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$
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10,000
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6.
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Counterfeit Money
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$
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750,000
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$
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10,000
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7.
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Threats to Person
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$
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750,000
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$
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10,000
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8.
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Computer System
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$
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750,000
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$
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10,000
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9.
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Voice Initiated Funds Transfer Instruction
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$
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750,000
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$
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10,000
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10.
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Uncollectible Items of Deposit
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$
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25,000
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$
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10,000
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11.
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Audit Expense
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$
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25,000
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$
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0
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12.
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Extended Computer Systems
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$
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750,000
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$
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10,000
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This
Endorsement applies to loss discovered after 12:01 a.m. on May 15, 2021.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: May 19, 2021
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By
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Authorized
Representative
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ICAP
Bond
|
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Form
17-02-1582 (Ed. 5-98)
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Page
1
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ENDORSEMENT/RIDER
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Effective
date of
|
|
|
this
endorsement/rider: May 15, 2021
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FEDERAL
INSURANCE COMPANY
|
|
|
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Endorsement/Rider
No.
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8
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|
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|
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To
be attached to and
form a part of Bond No.
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82302721
|
|
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Issued
to: FLAHERTY & CRUMRINE TOTAL RETURN FUND INCORPORATED
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FRAUDULENT
TRANSFER INSTRUCTIONS ENDORSEMENT
(For
use with the ICAP bond)
In
consideration of the premium charged, it is agreed that this bond is amended as follows:
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(1)
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The
following Insuring Clause is added:
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FRAUDULENT
TRANSFER INSTRUCTIONS
Loss
resulting directly from the ASSURED having, in good faith, transferred money on deposit in a Customer’s account,
or a Customer’s Certificated Security or Uncertificated Security, in reliance upon a fraudulent instruction
transmitted to the ASSURED via telefacsimile, telephone or electronic mail; provided, however, that:
|
A.
|
the
fraudulent instruction purports, and reasonably appears, to have originated from:
|
|
ii.
|
an
Employee acting on instructions of such Customer, or
|
|
iii.
|
another
financial institution acting on behalf of such Customer with authority to make
such instructions; and
|
|
B.
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the
sender of the fraudulent instruction verified the instruction with the password, PIN, or other security code of such Customer;
and
|
|
C.
|
the
sender was not, in fact, such Customer, was not authorized to act on behalf of such Customer, and was not an Employee;
and
|
|
D.
|
the
instruction was received by an Employee specifically authorized by the ASSURED to receive and act upon such instructions;
and
|
|
E.
|
for
any transfer exceeding the amount set forth in paragraph (8) of this endorsement, the ASSURED verified the instructions via a
call back to a predetermined telephone number set forth in the ASSURED’s written agreement with such Customer or
other verification procedure approved in writing by the COMPANY; and the ASSURED preserved a contemporaneous record of the call
back, if any, and the instruction which verifies use of the authorized password, PIN or other security code of the Customer.
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(2)
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For
the purposes of the coverage afforded by this endorsement, the following terms shall
have the following meanings:
|
Certificated
Security means a share, participation or other interest in property of, or an enterprise of, the issuer or an obligation of
the issuer, which is:
|
(1)
|
represented
by an instrument issued in bearer or registered form, and
|
|
(2)
|
of
a type commonly dealt in on securities exchanges or markets or commonly recognized in
any area in which it is issued or dealt in as a medium for investment, and
|
|
(3)
|
either
one of a class or series or by its terms divisible into a class or series of shares,
participations, interests or obligations.
|
14-02-21330
(10/2014)
Page
1 of 3
Customer
means any individual, corporate partnership, proprietor, trust customer, shareholder or subscriber of an Investment Company
which has a written agreement with the ASSURED authorizing the ASSURED to transfer Money on deposit in an account or
Certificated Security or Uncertificated Security in reliance upon instructions transmitted to the ASSURED via telefacsimile,
telephone or electronic mail to transmit the fraudulent instruction.
Uncertificated
Security means a share, participation or other interest in property of or an enterprise of the issuer or an obligation of
the issuer, which is:
|
(1)
|
not
represented by an instrument and the transfer of which is registered on books maintained
for that purpose by or on behalf of the issuer, and
|
|
(2)
|
of
a type commonly dealt in on securities exchanges or markets, and
|
|
(3)
|
either
one of a class or series or by its terms divisible into a class or series of shares,
participations, interests or obligations.
|
|
(3)
|
It
shall be a condition precedent to coverage under this Insuring Clause that the ASSURED
assert any available claims, offsets or defenses against such Customer, any financial
institution or any other party to the transaction.
|
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(4)
|
Solely
with respect to the Fraudulent Transfer Instruction Insuring Clause, the following Exclusions
are added:
|
|
A.
|
Loss
resulting directly or indirectly from a fraudulent instruction if the sender, or anyone
acting in collusion with the sender, ever had authorized access to such Customer’s
password, PIN or other security code; and
|
|
B.
|
Loss
resulting directly or indirectly from the fraudulent alteration of an instruction to initiate an automated clearing house (ACH)
entry, or group of ACH entries, transmitted as an electronic message, or as an attachment to an electronic message, sent via the
internet, unless:
|
|
i.
|
each
ACH entry was individually verified via the call back procedure without regard to the
amount of the entry; or
|
|
ii.
|
the
instruction was formatted, encoded or encrypted so that any altercation in the ACH entry
or group of ACH entries would be apparent to the ASSURED.
|
|
(5)
|
Solely
with respect to the Fraudulent Transfer Instruction Insuring Clause, Exclusion 2.k. is
deleted and replaced with the following:
|
|
k.
|
loss
resulting from voice requests or instructions received over the telephone, provided however,
this Section 2.k. shall not apply to INSURING CLAUSE 7. or 9. or the Fraudulent Transfer
Instruction Insuring Clause.
|
|
(6)
|
For
the purposes of the Fraudulent Transfer Instruction Insuring Clause, all loss or losses
involving one natural person or entity, or one group of natural persons or entities acting
together, shall be a Single Loss without regard to the number of transfers or the number
of instructions involved.
|
|
(7)
|
For
the purposes of the Fraudulent Transfer Instruction Insuring Clause, the Single Loss
Limit of Liability shall be $ 750,000. The Deductible Amount shall be $ 10,000.
|
|
(8)
|
The
amount of any single transfer for which verification via call back will be required is:
$ 10,000.
|
14-02-21330
(10/2014)
Page
2 of 3
The
title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and conditions of coverage.
All
other terms, conditions and limitations of this Policy shall remain unchanged.
|
|
|
|
|
Authorized Representative
|
14-02-21330
(10/2014)
Page
3 of 3
Important
Notice:
The
SEC Requires Proof of Your Fidelity Insurance Policy
Your
company is now required to file an electronic copy of your fidelity insurance coverage (Chubb’s ICAP Bond policy) to the
Securities and Exchange Commission (SEC), according to rules adopted by the SEC on June 12, 2006.
Chubb
is in the process of providing your agent/broker with an electronic copy of your insurance policy as well as instructions on how
to submit this proof of fidelity insurance coverage to the SEC. You can expect to receive this information from your agent/broker
shortly.
The
electronic copy of your policy is provided by Chubb solely as a convenience and does not affect the terms and conditions of coverage
as set forth in the paper policy you receive by mail. The terms and conditions of the policy mailed to you, which are the same
as those set forth in the electronic copy, constitute the entire agreement between your company and Chubb.
If
you have any questions, please contact your agent or broker.
Form
14-02-12160 (ed. 7/2006)
IMPORTANT
POLICYHOLDER INFORMATION
Inquiries
concerning your policy should be directed to your insurance agent. The name, address and telephone number of your agent, if one
is involved, is shown on the policy and/or in the material accompanying the policy.
If
you require additional information you may contact the California Insurance Department at either the following address or phone
number:
California
Insurance Department
300
South Spring Street
Los
Angeles, CA 90012
1-800-927-HELP
Form
14-02-1495 (Ed. 1/94)
IMPORTANT
NOTICE
The
premium shown on this policy or premium statement may be subject to adjustment in accordance with the provisions of California
law recently adopted by ballot initiative. You will be informed about any adjustment as soon as the requirements of the law and
their effect on your premium can be determined.
Form
99-10-0267 (Ed. 2/98)
IMPORTANT
NOTICE TO POLICYHOLDERS
All
of the members of the Chubb Group of Insurance companies doing business in the United States (hereinafter “Chubb”)
distribute their products through licensed insurance brokers and agents (“producers”). Detailed information regarding
the types of compensation paid by Chubb to producers on US insurance transactions is available under the Producer Compensation
link located at the bottom of the page at www.chubb.com, or by calling 1-866-588-9478. Additional information may be available
from your producer.
Thank
you for choosing Chubb.
10-02-1295
(ed. 6/2007)
The
following resolutions were adopted at the April 21, 2021 Meeting of the Board of Directors (the “Meeting”) of Flaherty
& Crumrine Total Return Fund Incorporated (the “Fund”) at which a majority of Directors who are not “interested
persons” approved the amount and form of the current fidelity bond for the period of May 15, 2021 to May 15, 2022.
RESOLVED:
|
That
the renewal of the fidelity bond coverage for the period from May 15, 2021 to May 15, 2022, which provides coverage in the
aggregate amount of $750,000, is hereby approved by the Board of Directors (including a majority of “non-interested”
Directors); and further
|
|
|
RESOLVED:
|
That it is the finding
of the Directors at this Meeting that the fidelity bond (the “Bond”) issued through Federal Insurance Company
in the amount of $750,000 covering officers and employees of the Fund, in accordance with the requirements of Rule 17g-1 under
the Investment Company Act of 1940, as amended (the “1940 Act”), is fair and reasonable in form and amount, after
having given due consideration to, among other things, the value of the aggregate assets of the Fund to which any person covered
under the Bond may have access, the custody and safekeeping of the assets of the Fund’s portfolio, and the nature of
the securities in the Fund’s portfolio; and further
|
|
|
RESOLVED:
|
That the premium
in the amount of $1,967 paid by the Fund under the Bond is hereby authorized; and further
|
|
|
RESOLVED:
|
That the appropriate
officers of the Fund be, and they hereby are, authorized and directed to prepare, execute, and file such amendments and supplements
to the aforesaid agreement, and to take such other action as may from time to time be necessary or appropriate in order to
conform to the provisions of the 1940 Act and the rules and regulations under that Act; and further
|
|
|
RESOLVED:
|
That the Secretary
or Assistant Secretary of the Fund shall make such filings concerning the Bond with the Securities and Exchange Commission
(“SEC”) and give such notices as required under paragraph (g) of Rule 17g-1 promulgated by the SEC under the 1940
Act.
|
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