Chubb
Group of Insurance Companies |
DECLARATIONS
|
202B
Hall’s Mill Road |
FINANCIAL
INSTITUTION INVESTMENT |
Whitehouse
Station, NJ 08889 |
COMPANY
ASSET PROTECTION BOND |
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|
NAME
OF ASSURED (including its Subsidiaries):
FLAHERTY & CRUMRINE PREFERRED AND
INCOME FUND INCORPORATED
301
EAST COLORADO BLVD., #800 |
Bond
Number: 82302718 |
PASADENA, CA 91101 |
FEDERAL
INSURANCE COMPANY |
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Incorporated
under the laws of Indiana |
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|
a
stock insurance company herein called the COMPANY |
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Capital
Center, 251 North Illinois, Suite 1100 |
|
Indianapolis,
IN 46204-1927 |
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ITEM
1. | BOND
PERIOD: from |
12:01 a.m. on May 15, 2024
to 12:01 a.m. on May 15, 2025 |
| 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
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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| | |
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INSURING
CLAUSE | |
SINGLE
LOSS
LIMIT OF LIABILITY | | |
DEDUCTIBLE
AMOUNT | |
1. |
|
|
Employee |
|
$ |
600,000 |
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|
$ |
0 |
|
2. |
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|
On Premises |
|
$ |
600,000 |
|
|
$ |
10,000 |
|
3. |
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|
In Transit |
|
$ |
600,000 |
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|
$ |
10,000 |
|
4. |
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|
Forgery or Alteration |
|
$ |
600,000 |
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|
$ |
10,000 |
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5. |
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|
Extended Forgery |
|
$ |
600,000 |
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|
$ |
10,000 |
|
6. |
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Counterfeit
Money |
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$ |
600,000 |
|
|
$ |
10,000 |
|
7. |
|
|
Threats to Person |
|
$ |
600,000 |
|
|
$ |
10,000 |
|
8. |
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|
Computer System |
|
$ |
600,000 |
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|
$ |
10,000 |
|
9. |
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Voice
Initiated Funds Transfer Instruction |
|
$ |
600,000 |
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|
$ |
10,000 |
|
10. |
|
|
Uncollectible
Items of Deposit |
|
$ |
25,000 |
|
|
$ |
10,000 |
|
11. |
|
|
Audit Expense |
|
$ |
25,000 |
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|
$ |
0 |
|
ITEM
3. | THE
LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE FOLLOWING ENDORSEMENTS EXECUTED SIMULTANEOUSLY
HEREWITH: |
1-8
ICAP
Bond (5-98) - Federal
Form 17-02-1421 (Ed. 5-98) |
Page
1 of 1 |
IN
WITNESS WHEREOF, THE COMPANY has caused this Bond to be signed by its authorized officers, but it shall not be valid unless
also signed by an authorized representative of the Company.
Form
17-02-1421 (Ed. 5-98) |
Page
2 of 2 |
The
COMPANY, in consideration of payment of the required premium, and in reliance on the APPLICATION and all other statements made
and information furnished to the COMPANY by the ASSURED, and subject to the DECLARATIONS made a part of this Bond and to all other
terms and conditions of this Bond, agrees to pay the ASSURED for:
Insuring
Clauses
Employee | 1. | Loss
resulting directly from Larceny or Embezzlement committed by any Employee,
alone or in collusion with others. |
On
Premises | 2. | Loss
of Property resulting directly from robbery, burglary, false pretenses, common
law or statutory larceny, misplacement, mysterious unexplainable disappearance, damage,
destruction or removal, from the possession, custody or control of the ASSURED, while
such Property is lodged or deposited at premises located anywhere. |
In
Transit | 3. | Loss
of Property resulting directly from common law or statutory larceny, misplacement,
mysterious unexplainable disappearance, damage or destruction, while the Property
is in transit anywhere: |
| a. | in
an armored motor vehicle, including loading and unloading thereof, |
| b. | in
the custody of a natural person acting as a messenger of the ASSURED, or |
| c. | in
the custody of a Transportation Company and being transported in a conveyance
other than an armored motor vehicle provided, however, that covered Property transported
in such manner is limited to the following: |
| (2) | securities
issued in registered form, which are not endorsed or are restrictively endorsed, or |
| (3) | negotiable
instruments not payable to bearer, which are not endorsed or are restrictively endorsed.
|
Coverage
under this INSURING CLAUSE begins immediately on the receipt of such Property by the natural person or Transportation
Company and ends immediately on delivery to the premises of the addressee or to any representative of the addressee located
anywhere.
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
1 of 19 |
Insuring
Clauses
(continued)
Forgery
Or Alteration | 4. | Loss
resulting directly from: |
| a. | Forgery
on, or fraudulent material alteration of, any bills of exchange, checks, drafts,
acceptances, certificates of deposits, promissory notes, due bills, money orders, orders
upon public treasuries, letters of credit, other written promises, orders or directions
to pay sums certain in money, or receipts for the withdrawal of Property, or |
| b. | transferring,
paying or delivering any funds or other Property, or establishing any credit or
giving any value in reliance on any written instructions, advices or applications directed
to the ASSURED authorizing or acknowledging the transfer, payment, delivery or receipt
of funds or other Property, which instructions, advices or applications fraudulently
purport to bear the handwritten signature of any customer of the ASSURED, or shareholder
or subscriber to shares of an Investment Company, or of any financial institution
or Employee but which instructions, advices or applications either bear a Forgery
or have been fraudulently materially altered without the knowledge and consent of
such customer, shareholder, subscriber, financial institution or Employee; |
excluding,
however, under this INSURING CLAUSE any loss covered under INSURING CLAUSE 5. of this Bond, whether or not coverage for INSURING
CLAUSE 5. is provided for in the DECLARATIONS of this Bond.
For
the purpose of this INSURING CLAUSE, a mechanically reproduced facsimile signature is treated the same as a handwritten signature.
Extended
Forgery | 5. | Loss
resulting directly from the ASSURED having, in good faith, and in the ordinary course
of business, for its own account or the account of others in any capacity: |
| a. | acquired,
accepted or received, sold or delivered, or given value, extended credit or assumed liability,
in reliance on any original Securities, documents or other written instruments
which prove to: |
| (1) | bear
a Forgery or a fraudulently material alteration, |
| (2) | have
been lost or stolen, or |
| b. | guaranteed
in writing or witnessed any signatures on any transfer, assignment, bill of sale, power
of attorney, guarantee, endorsement or other obligation upon or in connection with any
Securities, documents or other written instruments. |
Actual
physical possession, and continued actual physical possession if taken as collateral, of such Securities, documents or other written
instruments by an Employee, Custodian, or a Federal or State chartered deposit institution of the ASSURED is a condition precedent
to the ASSURED having relied on such items. Release or return of such collateral is an acknowledgment by the ASSURED that it no longer
relies on such collateral.
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
2 of 19 |
Insuring
Clauses
Extended
Forgery
(continued) | | For
the purpose of this INSURING CLAUSE, a mechanically reproduced facsimile signature is
treated the same as a handwritten signature. |
Counterfeit
Money | 6. | Loss
resulting directly from the receipt by the ASSURED in good faith of any Counterfeit
money. |
Threats
To Person |
7. | Loss
resulting directly from surrender of Property away from an office of the ASSURED
as a result of a threat communicated to the ASSURED to do bodily harm to an Employee
as defined in SECTION 1.e. (1), (2) and (5), a Relative or invitee of such
Employee, or a resident of the household of such Employee, who is, or allegedly
is, being held captive provided, however, that prior to the surrender of such Property: |
| a. | the
Employee who receives the threat has made a reasonable effort to notify an officer
of the ASSURED who is not involved in such threat, and |
| b. | the
ASSURED has made a reasonable effort to notify the Federal Bureau of Investigation and
local law enforcement authorities concerning such threat. |
It
is agreed that for purposes of this INSURING CLAUSE, any Employee of the ASSURED, as set forth in the preceding paragraph,
shall be deemed to be an ASSURED hereunder, but only with respect to the surrender of money, securities and other tangible personal
property in which such Employee has a legal or equitable interest.
Computer
System | 8. | Loss
resulting directly from fraudulent: |
| a. | entries
of data into, or |
| | |
| b. | changes
of data elements or programs within, |
| | |
| a
Computer System, provided the fraudulent entry or change causes: |
| (1) | funds
or other property to be transferred, paid or delivered, |
| (2) | an
account of the ASSURED or of its customer to be added, deleted, debited or credited,
or |
| (3) | an
unauthorized account or a fictitious account to be debited or credited. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
3 of 19 |
Insuring
Clauses
(continued)
Voice
Initiated Funds
Transfer Instruction | 9. | Loss
resulting directly from Voice Initiated Funds Transfer Instruction directed to
the ASSURED authorizing the transfer of dividends or redemption proceeds of Investment
Company shares from a Customer’s account, provided such Voice Initiated
Funds Transfer Instruction was: |
| a. | received
at the ASSURED’S offices by those Employees of the ASSURED specifically
authorized to receive the Voice Initiated Funds Transfer Instruction, |
| b. | made
by a person purporting to be a Customer, and |
| c. | made
by said person for the purpose of causing the ASSURED or Customer to sustain a
loss or making an improper personal financial gain for such person or any other person.
|
| | In
order for coverage to apply under this INSURING CLAUSE, all Voice Initiated Funds
Transfer Instructions must be received and processed in accordance with the Designated
Procedures outlined in the APPLICATION furnished to the COMPANY. |
Uncollectible
Items of
Deposit | 10. | Loss
resulting directly from the ASSURED having credited an account of a customer, shareholder
or subscriber on the faith of any Items of Deposit which prove to be uncollectible,
provided that the crediting of such account causes: |
| a. | redemptions
or withdrawals to be permitted, |
| b. | shares
to be issued, or |
| | |
| c. | dividends
to be paid, |
| | |
| from
an account of an Investment Company. |
In
order for coverage to apply under this INSURING CLAUSE, the ASSURED must hold Items of Deposit for the minimum number of
days stated in the APPLICATION before permitting any redemptions or withdrawals, issuing any shares or paying any dividends with
respect to such Items of Deposit.
Items
of Deposit shall not be deemed uncollectible until the ASSURED’S standard collection procedures have failed.
Audit
Expense | 11. | Expense
incurred by the ASSURED for that part of the cost of audits or examinations required
by any governmental regulatory authority or self-regulatory organization to be conducted
by such authority, organization or their appointee by reason of the discovery of loss
sustained by the ASSURED and covered by this Bond. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
4 of 19 |
General
Agreements
Additional
Companies Included As Assured |
A. |
If
more than one corporation, or Investment Company, or any combination of them is included as the ASSURED herein: |
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(1) |
The
total liability of the COMPANY under this Bond for loss or losses sustained by any one or more or all of them shall not exceed
the limit for which the COMPANY would be liable under this Bond if all such loss were sustained by any one of them. |
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(2) |
Only
the first named ASSURED shall be deemed to be the sole agent of the others for all purposes under this Bond, including but
not limited to the giving or receiving of any notice or proof required to be given and for the purpose of effecting or accepting
any amendments to or termination of this Bond. The COMPANY shall furnish each Investment Company with a
copy of the Bond and with any amendment thereto, together with a copy of each formal filing of claim by any other named ASSURED
and notification of the terms of the settlement of each such claim prior to the execution of such settlement. |
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(3) |
The
COMPANY shall not be responsible for the proper application of any payment made hereunder to the first named ASSURED. |
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(4) |
Knowledge
possessed or discovery made by any partner, director, trustee, officer or supervisory employee of any ASSURED shall constitute
knowledge or discovery by all the ASSUREDS for the purposes of this Bond. |
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(5) |
If
the first named ASSURED ceases for any reason to be covered under this Bond, then the ASSURED next named on the APPLICATION
shall thereafter be considered as the first named ASSURED for the purposes of this Bond. |
Representation
Made By Assured |
B. |
The
ASSURED represents that all information it has furnished in the APPLICATION for this Bond or otherwise is complete,
true and correct. Such APPLICATION and other information constitute part of this Bond. |
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The
ASSURED must promptly notify the COMPANY of any change in any fact or circumstance which materially affects the risk assumed
by the COMPANY under this Bond. |
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Any
intentional misrepresentation, omission, concealment or incorrect statement of a material fact, in the APPLICATION or otherwise,
shall be grounds for recision of this Bond. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
5 of 19 |
General
Agreements
(continued)
Additional
Offices Or
Employees - Consolidation,
Merger Or Purchase Or |
C. |
If
the ASSURED, other than an Investment Company, while this Bond is in force, merges or consolidates with, or purchases
or acquires assets or liabilities of another institution, the ASSURED shall not have the coverage afforded under this Bond
for loss which has:
|
Acquisition
Of Assets Or |
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Liabilities
- Notice To |
(1) |
occurred
or will occur on premises, or |
Company |
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(2) |
been
caused or will be caused by an employee, or |
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(3) |
arisen
or will arise out of the assets or liabilities, |
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of
such institution, unless the ASSURED: |
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a. |
gives
the COMPANY written notice of the proposed consolidation, merger or purchase or acquisition of assets or liabilities prior
to the proposed effective date of such action, and |
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b. |
obtains
the written consent of the COMPANY to extend some or all of the coverage provided by this Bond to such additional exposure,
and |
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c. |
on
obtaining such consent, pays to the COMPANY an additional premium. |
Change
Of Control -
Notice To Company |
D. |
When
the ASSURED learns of a change in control (other than in an Investment Company),
as set forth in Section 2(a) (9) of the Investment Company Act of 1940, the ASSURED shall
within sixty (60) days give written notice to the COMPANY setting forth:
|
| (1) | the
names of the transferors and transferees (or the names of the beneficial owners if the
voting securities are registered in another name), |
| (2) | the
total number of voting securities owned by the transferors and the transferees (or the
beneficial owners), both immediately before and after the transfer, and |
| (3) | the
total number of outstanding voting securities. |
|
Failure
to give the required notice shall result in termination of coverage for any loss involving a transferee, to be effective on
the date of such change in control. |
Court
Costs And Attorneys’ Fees |
E. |
The
COMPANY will indemnify the ASSURED for court costs and reasonable attorneys’ fees incurred and paid by the ASSURED in
defense, whether or not successful, whether or not fully litigated on the merits and whether or not settled, of any claim,
suit or legal proceeding with respect to which the ASSURED would be entitled to recovery under this Bond. However, with respect
to INSURING CLAUSE 1., this Section shall only apply in the event that: |
| (1) |
an
Employee admits to being guilty of Larceny or Embezzlement, |
| (2) |
an
Employee is adjudicated to be guilty of Larceny or Embezzlement, or |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
6 of 19 |
General
Agreements
Court
Costs And
Attorneys’ Fees
(continued) |
(3) |
in
the absence of 1 or 2 above, an arbitration panel agrees, after a review of an agreed statement of facts between the COMPANY
and the ASSURED, that an Employee would be found guilty of Larceny or Embezzlement if such Employee were
prosecuted. |
|
The
ASSURED shall promptly give notice to the COMPANY of any such suit or legal proceeding and at the request of the COMPANY shall
furnish copies of all pleadings and pertinent papers to the COMPANY. The COMPANY may, at its sole option, elect to conduct
the defense of all or part of such legal proceeding. The defense by the COMPANY shall be in the name of the ASSURED through
attorneys selected by the COMPANY. The ASSURED shall provide all reasonable information and assistance as required
by the COMPANY for such defense. |
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If
the COMPANY declines to defend the ASSURED, no settlement without the prior written consent of the COMPANY nor judgment against
the ASSURED shall determine the existence, extent or amount of coverage under this Bond. |
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If
the amount demanded in any such suit or legal proceeding is within the DEDUCTIBLE AMOUNT, if any, the COMPANY shall have no
liability for court costs and attorney’s fees incurred in defending all or part of such suit or legal proceeding. |
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If
the amount demanded in any such suit or legal proceeding is in excess of the LIMIT OF LIABILITY stated in ITEM 2. of the DECLARATIONS
for the applicable INSURING CLAUSE, the COMPANY’S liability for court costs and attorney’s fees incurred in defending
all or part of such suit or legal proceedings is limited to the proportion of such court costs and attorney’s fees incurred
that the LIMIT OF LIABILITY stated in ITEM 2. of the DECLARATIONS for the applicable INSURING CLAUSE bears to the total of
the amount demanded in such suit or legal proceeding. |
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If
the amount demanded is any such suit or legal proceeding is in excess of the DEDUCTIBLE AMOUNT, if any, but within the LIMIT
OF LIABILITY stated in ITEM 2. of the DECLARATIONS for the applicable INSURING CLAUSE, the COMPANY’S liability for court
costs and attorney’s fees incurred in defending all or part of such suit or legal proceedings shall be limited to the
proportion of such court costs or attorney’s fees that the amount demanded that would be payable under this Bond after
application of the DEDUCTIBLE AMOUNT, bears to the total amount demanded. |
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Amounts
paid by the COMPANY for court costs and attorneys’ fees shall be in addition to the LIMIT OF LIABILITY stated in ITEM
2. of the DECLARATIONS. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
7 of 19 |
Conditions
and
Limitations
Definitions |
1. | As
used in this Bond: |
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| a. | Computer
System means a computer and all input, output, processing, storage, off-line media
libraries, and communication facilities which are connected to the computer and which
are under the control and supervision of the operating system(s) or application(s) software
used by the ASSURED. |
| b. | Counterfeit
means an imitation of an actual valid original which is intended to deceive and be
taken as the original. |
| c. | Custodian
means the institution designated by an Investment Company to maintain possession
and control of its assets. |
| d. | Customer
means an individual, corporate, partnership, trust customer, shareholder or subscriber
of an Investment Company which has a written agreement with the ASSURED for Voice
Initiated Funds Transfer Instruction. |
| (1) | an
officer of the ASSURED, |
| (2) | a
natural person while in the regular service of the ASSURED at any of the ASSURED’S
premises and compensated directly by the ASSURED through its payroll system and subject
to the United States Internal Revenue Service Form W-2 or equivalent income reporting
plans of other countries, and whom the ASSURED has the right to control and direct both
as to the result to be accomplished and details and means by which such result is accomplished
in the performance of such service, |
| (3) | a
guest student pursuing studies or performing duties in any of the ASSURED’S premises, |
| (4) | an
attorney retained by the ASSURED and an employee of such attorney while either is performing
legal services for the ASSURED, |
| (5) | a
natural person provided by an employment contractor to perform employee duties for the
ASSURED under the ASSURED’S supervision at any of the ASSURED’S premises, |
| (6) | an
employee of an institution merged or consolidated with the ASSURED prior to the effective
date of this Bond, |
| (7) | a
director or trustee of the ASSURED, but only while performing acts within the scope of
the customary and usual duties of any officer or other employee of the ASSURED or while
acting as a member of any committee duly elected or appointed to examine or audit or
have custody of or access to Property of the ASSURED, or |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
8 of 19 |
Conditions
and
Limitations
Definitions
(continued) |
(8) |
each
natural person, partnership or corporation authorized by written agreement with the ASSURED
to perform services as electronic data processor of checks or other accounting records
related to such checks but only while such person, partnership or corporation is actually
performing such services and not:
a. creating,
preparing, modifying or maintaining the ASSURED’S computer software or programs, or
b. acting
as transfer agent or in any other agency capacity in issuing checks, drafts or securities for the ASSURED,
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(9) |
any
partner, officer or employee of an investment advisor, an underwriter (distributor), a transfer agent or shareholder accounting
recordkeeper, or an administrator, for an Investment Company while performing acts coming within the scope of the customary
and usual duties of an officer or employee of an Investment Company or acting as a member of any committee duly elected
or appointed to examine, audit or have custody of or access to Property of an Investment Company. |
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The
term Employee shall not include any partner, officer or employee of a transfer
agent, shareholder accounting recordkeeper or administrator:
a.
which is not an “affiliated person” (as defined in Section 2(a) of the Investment Company Act of 1940) of
an Investment Company or of the investment advisor or underwriter (distributor) of such Investment Company,
or
b. which is a “bank” (as defined in Section 2(a) of the Investment Company Act of 1940).
This
Bond does not afford coverage in favor of the employers of persons as set forth in e. (4), (5) and (8) above, and upon
payment to the ASSURED by the COMPANY resulting directly from Larceny or Embezzlement committed by any of the partners,
officers or employees of such employers, whether acting alone or in collusion with others, an assignment of such of the
ASSURED’S rights and causes of action as it may have against such employers by reason of such acts so committed
shall, to the extent of such payment, be given by the ASSURED to the COMPANY, and the ASSURED shall execute all papers
necessary to secure to the COMPANY the rights provided for herein.
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Each
employer of persons as set forth in e.(4), (5) and (8) above and the partners, officers and other employees of such employers
shall collectively be deemed to be one person for all the purposes of this Bond; excepting, however, the fifth paragraph of
Section 13. |
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Independent
contractors not specified in e.(4), (5) or (8) above, intermediaries, agents, brokers or other representatives of the same
general character shall not be considered Employees. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
9 of 19 |
Conditions
and
Limitations
Definitions
(continued) |
f. |
Forgery
means the signing of the name of another natural person with the intent to deceive but does not mean a signature which
consists in whole or in part of one’s own name, with or without authority, in any capacity for any purpose. |
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g. |
Investment
Company means any investment company registered under the Investment Company Act of 1940 and listed under the NAME OF
ASSURED on the DECLARATIONS. |
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h. |
Items
of Deposit means one or more checks or drafts drawn upon a financial institution in the United States of America. |
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i. |
Larceny
or Embezzlement means larceny or embezzlement as defined in Section 37 of the Investment Company Act of 1940. |
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j. |
Property
means money, revenue and other stamps; securities; including any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of deposit, certificate of interest or participation in any profit-sharing agreement, collateral
trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting trust certificate,
certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any interest or
instruments commonly known as a security under the Investment Company Act of 1940, any other certificate of interest or participation
in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of
the foregoing; bills of exchange; acceptances; checks; withdrawal orders; money orders; travelers’ letters of credit;
bills of lading; abstracts of title; insurance policies, deeds, mortgages on real estate and/or upon chattels and interests
therein; assignments of such policies, deeds or mortgages; other valuable papers, including books of accounts and other records
used by the ASSURED in the conduct of its business (but excluding all electronic data processing records); and, all other
instruments similar to or in the nature of the foregoing in which the ASSURED acquired an interest at the time of the ASSURED’S
consolidation or merger with, or purchase of the principal assets of, a predecessor or which are held by the ASSURED for any
purpose or in any capacity and whether so held gratuitously or not and whether or not the ASSURED is liable therefor. |
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k. |
Relative
means the spouse of an Employee or partner of the ASSURED and any unmarried child supported wholly by, or living
in the home of, such Employee or partner and being related to them by blood, marriage or legal guardianship. |
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l. |
Securities,
documents or other written instruments means original (including original counterparts) negotiable or non-negotiable instruments,
or assignments thereof, which in and of themselves represent an equitable interest, ownership, or debt and which are in the
ordinary course of business transferable by delivery of such instruments with any necessary endorsements or assignments. |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
10 of 19 |
Conditions
and
Limitations
Definitions
(continued) |
|
m. |
Subsidiary
means any organization that, at the inception date of this Bond, is named in the APPLICATION or is created during the
BOND PERIOD and of which more than fifty percent (50%) of the outstanding securities or voting rights representing the present
right to vote for election of directors is owned or controlled by the ASSURED either directly or through one or more of its
subsidiaries. |
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n. |
Transportation
Company means any organization which provides its own or its leased vehicles for transportation or which provides freight
forwarding or air express services. |
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o. |
Voice
Initiated Election means any election concerning dividend options available to Investment Company shareholders
or subscribers which is requested by voice over the telephone. |
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p. |
Voice
Initiated Redemption means any redemption of shares issued by an Investment Company which is requested by voice
over the telephone. |
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q. |
Voice
Initiated Funds Transfer Instruction means any Voice Initiated Redemption or Voice Initiated Election. |
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For
the purposes of these definitions, the singular includes the plural and the plural includes the singular, unless otherwise
indicated. |
General
Exclusions - |
2. |
This
bond does not directly or indirectly cover: |
Applicable
to All Insuring |
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Clauses |
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a. |
loss
not reported to the COMPANY in writing within sixty (60) days after termination of this Bond as an entirety; |
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b. |
loss
due to riot or civil commotion outside the United States of America and Canada, or any loss due to military, naval or usurped
power, war or insurrection. This Section 2.b., however, shall not apply to loss which occurs in transit in the
circumstances recited in INSURING CLAUSE 3., provided that when such transit was initiated there was no knowledge on the part
of any person acting for the ASSURED of such riot, civil commotion, military, naval or usurped power, war or insurrection; |
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c. |
loss
resulting from the effects of nuclear fission or fusion or radioactivity; |
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d. |
loss
of potential income including, but not limited to, interest and dividends not realized by the ASSURED or by any
customer of the ASSURED; |
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e. |
damages
of any type for which the ASSURED is legally liable, except compensatory damages, but not multiples thereof, arising from
a loss covered under this Bond; |
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f. |
costs,
fees and expenses incurred by the ASSURED in establishing the existence of or amount of loss under this Bond, except to the
extent covered under INSURING CLAUSE 11.; |
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g. |
loss
resulting from indirect or consequential loss of any nature; |
ICAP
Bond (5-98)
Form 17-02-1421 (Ed. 5-98) |
Page
11 of 19 |
Conditions
and
Limitations
General
Exclusions -
Applicable to All Insuring |
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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
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(continued) |
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i. |
loss, or
that part of any loss, resulting solely from any violation by the ASSURED or by any Employee: |
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(1) of
any law regulating: |
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a. the
issuance, purchase or sale of securities, |
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b. securities
transactions on security or commodity exchanges or the over the counter market, |
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c. investment
companies, |
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d. investment
advisors, or |
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(2) of
any rule or regulation made pursuant to any such law; or |
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j. |
loss
of confidential information, material or data; |
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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 |
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Clauses
Except Insuring
Clause 1. |
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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; |
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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;
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c. |
loss
resulting from payments made or withdrawals from any account involving erroneous credits to such account; |
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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.; |
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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. |
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| 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.; |
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| 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 |
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| 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 |
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Clauses
Except Insuring
Clauses 1., 4., And 5. |
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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.; |
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b. |
loss
resulting from forgery or any alteration; |
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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
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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: |
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| a. | any
one act of burglary, robbery or hold-up, or attempt thereat, in which no Employee
is concerned or implicated, or |
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one unintentional or negligent act on the part of any one person resulting in damage
to or destruction or misplacement of Property, or |
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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- |
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d. |
any
one casualty or event other than those specified in a., b., or c. above, |
Accumulation
Of Liability
(continued) |
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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. |
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All
acts, as specified in c. above, of any one person which |
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i. |
directly
or indirectly aid in any way wrongful acts of any other person or persons, or |
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ii. |
permit
the continuation of wrongful acts of any other person or persons |
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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: |
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a. |
facts
which may subsequently result in a loss of a type covered by this Bond, or |
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b. |
an
actual or potential claim in which it is alleged that the ASSURED is liable to a third party, |
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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. |
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b. |
The
ASSURED shall furnish to the COMPANY proof of loss, duly sworn to, with full particulars within six (6) months after such
discovery. |
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c. |
Securities
listed in a proof of loss shall be identified by certificate or bond numbers, if issued with them. |
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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. |
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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
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Notice
To Company -
Proof - Legal Proceedings
Against Company |
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f. |
Proof
of loss involving Voice Initiated Funds Transfer Instruction shall include electronic recordings of such instructions.
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(continued) |
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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. |
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There
shall be no deductible applicable to any loss under INSURING CLAUSE 1. sustained by any
Investment Company.
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Valuation |
9. |
BOOKS
OF ACCOUNT OR OTHER RECORDS |
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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. |
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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. |
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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. |
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OTHER
PROPERTY |
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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. |
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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. |
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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. |
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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.
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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, |
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| 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. |
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| | 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 |
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ENDORSEMENT/RIDER |
Effective date of |
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this endorsement/rider: May 15, 2024 |
FEDERAL INSURANCE COMPANY |
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Endorsement/Rider No. |
1 |
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To be attached to and |
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form a part of Bond No. |
82302718 |
Issued
to: | FLAHERTY &
CRUMRINE PREFERRED AND INCOME 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.
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Authorized
Representative |
17-02-2437 (12/2006) rev. |
Page 1 |
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ENDORSEMENT/RIDER |
Effective date of |
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this endorsement/rider: May 15, 2024 |
FEDERAL
INSURANCE COMPANY |
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Endorsement/Rider No. |
2 |
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To be attached to and |
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form a part of Policy No. |
82302718 |
| Issued
to: | FLAHERTY &
CRUMRINE PREFERRED AND INCOME 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.
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Authorized
Representative |
14-02-9228
(2/2010) | Page 1 |
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Federal
Insurance Company |
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Endorsement No: |
3 |
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Bond Number: |
82302718 |
NAME
OF ASSURED: FLAHERTY & CRUMRINE PREFERRED AND INCOME FUND INCORPORATED
PREMIUM ENDORSEMENT
It is agreed that:
| 1. | The
premium for this Bond for the period May 15, 2024 to May 15, 2025 is: |
Premium: One Thousand Seven Hundred Ninety-One and 00/100 ($1,791.00)
| 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, 2024.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date:
May 10, 2024 |
By |
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Authorized
Representative |
ICAP
Bond
Form
17-02-0735 (Rev. 1-97)
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ENDORSEMENT/RIDER |
Effective date of |
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this endorsement/rider: May 15, 2024 |
FEDERAL INSURANCE COMPANY |
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Endorsement/Rider No. |
4 |
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To be attached to and |
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form a part of Bond No. |
82302718 |
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| Issued
to: | FLAHERTY & CRUMRINE PREFERRED AND INCOME 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.
|
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Authorized
Representative |
14-02-14098
(04/2008) | Page 1 |
|
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ENDORSEMENT/RIDER |
Effective date of |
|
|
this endorsement/rider: May 15, 2024 |
FEDERAL
INSURANCE COMPANY |
|
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|
|
Endorsement/Rider No. |
5 |
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To be attached to and |
|
|
form a part of Policy No. |
82302718 |
| Issued
to: | FLAHERTY & CRUMRINE PREFERRED AND INCOME FUND INCORPORATED |
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.
|
|
|
|
|
Authorized
Representative |
14-02-19726
(12/2019) | Page 1 |
|
268508
|
FEDERAL INSURANCE COMPANY |
|
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|
|
Endorsement No.: |
6 |
|
|
|
|
Bond Number: |
82302718 |
NAME OF ASSURED:
FLAHERTY & CRUMRINE PREFERRED AND INCOME FUND INCORPORATED
EXTENDED
COMPUTER SYSTEMS ENDORSEMENT
It
is agreed that this Bond is amended as follows:
| 1. |
By adding the following INSURING CLAUSE: |
12.
Extended Computer Systems
| A. | Electronic
Data, Electronic Media, Electronic Instruction |
Loss
resulting directly from:
| (1) | 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, |
| (2) | robbery,
burglary, larceny or theft of Electronic Data, Electronic Media or Electronic Instructions, |
| (3) | 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 |
| (4) | 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. |
ICAP2
Bond
Form 17-02-2976 (Ed. 1-02) |
Page 1 |
| B. | Electronic
Communication |
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:
| (1) | an
Electronic Communication System, |
| (2) | an
automated clearing house or custodian, or |
| (3) | a
Telex, TWX, or similar means of communication, |
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.
| C. | Electronic
Transmission |
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:
| (1) | an
Electronic Communication System, |
| (2) | an
automated clearing house or custodian, or |
| (3) | a
Telex, TWX, or similar means of communication, |
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.
ICAP2
Bond |
|
Form
17-02-2976 (Ed. 1-02) |
Page
2 |
| 2. | By
adding to Section 1., Definitions, the following: |
| r. | 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. |
| s. | 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. |
| t. | 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. |
| u. | Electronic
Instruction means computer programs converted to a form usable in a Computer System
to act upon Electronic Data. |
| v. | Electronic
Media means the magnetic tape, magnetic disk, optical disk, or any other bulk media
on which data is recorded. |
| 3. | By
adding the following Section after Section 4., Specific Exclusions-Applicable to All INSURING CLAUSES except 1., 4., and 5.: |
Section
4.A. Specific Exclusions-Applicable to INSURING CLAUSE 12
This
Bond does not directly or indirectly cover:
| a. | 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; |
| b. | loss
of negotiable instruments, securities, documents or written instruments except as converted
to Electronic Data and then only in that converted form; |
| c. | 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; |
| d. | 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 |
| e. | 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 |
| f. | loss
resulting directly or indirectly from: |
| (1) | written
instruction unless covered under this INSURING CLAUSE; or |
| (2) | instruction
by voice over the telephone, unless covered under this INSURING CLAUSE. |
|
|
|
|
Form
17-02-2976 (Ed. 1-02) |
Page
3 |
| 4. | By
adding to Section 9., Valuation, the following: |
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, 2024.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date:
May 10, 2024 |
By |
|
|
|
Authorized
Representative |
ICAP2
Bond |
|
Form
17-02-2976 (Ed. 1-02) |
Page
4 |
|
FEDERAL INSURANCE COMPANY |
|
|
|
Endorsement No. |
7 |
|
|
|
Bond Number: |
82302718 |
NAME
OF ASSURED: FLAHERTY & CRUMRINE PREFERRED AND INCOME FUND INCORPORATED
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.
|
| |
SINGLE LOSS | |
DEDUCTIBLE |
INSURING CLAUSE | |
LIMIT OF LIABILITY | |
AMOUNT |
1. |
Employee | |
$ | 600,000 | | |
$ | 0 | |
2. |
On Premises | |
$ | 600,000 | | |
$ | 10,000 | |
3. |
In Transit | |
$ | 600,000 | | |
$ | 10,000 | |
4. |
Forgery or Alteration | |
$ | 600,000 | | |
$ | 10,000 | |
5. |
Extended Forgery | |
$ | 600,000 | | |
$ | 10,000 | |
6. |
Counterfeit Money | |
$ | 600,000 | | |
$ | 10,000 | |
7. |
Threats to Person | |
$ | 600,000 | | |
$ | 10,000 | |
8. |
Computer System | |
$ | 600,000 | | |
$ | 10,000 | |
9. |
Voice Initiated Funds Transfer Instruction | |
$ | 600,000 | | |
$ | 10,000 | |
10. |
Uncollectible Items of Deposit | |
$ | 25,000 | | |
$ | 10,000 | |
11. |
Audit Expense | |
$ | 25,000 | | |
$ | 0 | |
12. |
Extended Computer Systems | |
$ | 600,000 | | |
$ | 10,000 | |
This Endorsement applies to loss discovered after 12:01 a.m. on May 15, 2024.
ALL
OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date:
May 10, 2024 |
By |
|
|
|
Authorized
Representative |
|
|
ENDORSEMENT/RIDER |
Effective date of |
|
|
this endorsement/rider: May 15, 2024 |
FEDERAL
INSURANCE COMPANY |
|
|
|
|
Endorsement/Rider No. |
8 |
|
|
|
|
To be attached to and |
|
|
form a part of Bond No. |
82302718 |
Issued
to: FLAHERTY & CRUMRINE PREFERRED AND INCOME FUND INCORPORATED
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:
| (1) | The
following Insuring Clause is added: |
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. | 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 |
| F. | 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. |
| (2) | 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 |
14-02-21330
(10/2014) | Page 1 of 3 |
|
| (3) | either
one of a class or series or by its terms divisible into a class or series of shares, participations, interests or obligations. |
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. |
(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 $ 600,000.
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)
Chubb
Producer Compensation
Practices
& Policies
Chubb
believes that policyholders should have access to information about Chubb’s practices and policies related to the
payment of compensation to brokers and independent agents. You can obtain that information by accessing our website at http://www.chubbproducercompensation.com
or by calling the following toll-free telephone number:
1-866-512-2862.
ALL-20887a
(09/19) | Page 1 of 1 |
|
The following resolutions were adopted
at the April 17, 2024 Meeting of the Board of Directors (the “Meeting”) of Flaherty & Crumrine Preferred and Income
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, 2024 to May 15, 2025.
| RESOLVED: | That the renewal of the fidelity bond coverage for the period from May 15, 2024 to May 15, 2025, which provides coverage in
the aggregate amount of $600,000, 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 $600,000 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 $1,791 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 empowered
to prepare, execute, and file such amendments and supplements to the aforesaid Bond,
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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