CHUBB GROUP OF INSURANCE COMPANIES DECLARATIONS
FINANCIAL INSTITUTION
INVESTMENT
COMPANY ASSET PROTECTION
15 Mountain View Road, Warren, New Jersey 07059 BOND
Bond Number:
NAME OF ASSURED (including its SUBSIDIARIES): 82052988
FLAHERTY & CRUMRINE INCORPORATED / PREFERRED
INCOME OPPORTUNITY FUND FEDERAL INSURANCE COMPANY
301 E. COLORADO BLVD., STE 720 Incorporated under the laws of
PASADENA, CA 91101 Indiana
a stock insurance company
herein called the COMPANY
Capital Center, 251 North
Illinois, Suite 1100
Indianapolis, IN 46204-1927
ITEM 1. BOND PERIOD: from 12:01 a.m. on May 15, 2009
to 12:01 a.m. on May 15, 2010
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.
DEDUCTIBLE
INSURING CLAUSE LIMIT OF LIABILITY AMOUNT
--------------- ------------------ ----------
1. Employee $450,000 $25,000
2. On Premises $450,000 $25,000
3. In Transit $450,000 $25,000
Forgery or
4. Alteration $ n/a $ n/a
5. Extended Forgery $ n/a $ n/a
6. Counterfeit Money $ n/a $ n/a
7. Threats to Person $ n/a $ n/a
8. Computer System $ n/a $ n/a
9. Voice Initiated Funds Transfer Instruction $ n/a $ n/a
10. Uncollectible Items of Deposit $ n/a $ n/a
11. Audit Expense $ 25,000 $ 0
ITEM 3. THE LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE
FOLLOWING ENDORSEMENTS EXECUTED SIMULTANEOUSLY HEREWITH:
1) Deleting Valuation & Amending Change/Modifications Endt; 2) Compliance with
Trade Sanction Endt: 3) Premium Endt.
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.
/s/ W. Andrew Macan /s/ John J Degnan
Secretary President
Countersigned by /s/ Robert Hamburger
-------------------- ----------------------------------------
Authorized Representative
ICAP Bond (5-98) - Federal
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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:
(1) written records,
(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.
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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, 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
(3) be COUNTERFEIT, 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.
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INSURING CLAUSES
EXTENDED FORGERY For the purpose of this INSURING CLAUSE, a
(CONTINUED) 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.
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INSURING CLAUSES
(CONTINUED)
VOICE INITIATED FUNDS 9. Loss resulting directly from VOICE INITIATED
TRANSFER INSTRUCTION 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 10. Loss resulting directly from the ASSURED having
DEPOSIT 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.
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GENERAL AGREEMENTS
ADDITIONAL COMPANIES A. If more than one corporation, or INVESTMENT
INCLUDED AS ASSURED COMPANY, or any combination of them is included
as the ASSURED herein:
(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.
(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.
(3) The COMPANY shall not be responsible for the
proper application of any payment made
hereunder to the first named ASSURED.
(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.
(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 B. The ASSURED represents that all information it
ASSURED 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.
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.
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.
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GENERAL AGREEMENTS
(CONTINUED)
ADDITIONAL OFFICES OR C. If the ASSURED, other than an INVESTMENT COMPANY,
EMPLOYEES - while this Bond is in force, merges or
CONSOLIDATION, MERGER consolidates with, or purchases or acquires
OR PURCHASE OR assets or liabilities of another institution, the
ACQUISITION OF ASSETS ASSURED shall not have the coverage afforded
OR LIABILITIES - NOTICE under this Bond for loss which has:
TO COMPANY
(1) occurred or will occur on premises, or
(2) been caused or will be caused by an
employee, or
(3) arisen or will arise out of the assets or
liabilities, of such institution, unless the
ASSURED:
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
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
c. on obtaining such consent, pays to the
COMPANY an additional premium.
CHANGE OF CONTROL - D. When the ASSURED learns of a change in control
NOTICE TO COMPANY (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 E. The COMPANY will indemnify the ASSURED for court
ATTORNEYS' FEES 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
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GENERAL AGREEMENTS
COURT COSTS AND (3) in the absence of 1 or 2 above, an
ATTORNEYS' FEES arbitration panel agrees, after a review of
(CONTINUED) 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.
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.
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.
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.
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.
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.
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CONDITIONS AND
LIMITATIONS
DEFINITIONS 1. As used in this Bond:
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.
e. EMPLOYEE means:
(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
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CONDITIONS AND
LIMITATIONS
DEFINITIONS (8) each natural person, partnership or
(CONTINUED) 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,
(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.
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.
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.
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.
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CONDITIONS AND
LIMITATIONS
DEFINITIONS f. FORGERY means the signing of the name of
(CONTINUED) 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.
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.
h. ITEMS OF DEPOSIT means one or more checks or
drafts drawn upon a financial institution in
the United States of America.
i. LARCENY OR EMBEZZLEMENT means larceny or
embezzlement as defined in Section 37 of the
Investment Company Act of 1940.
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.
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.
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.
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CONDITIONS AND
LIMITATIONS
DEFINITIONS m. SUBSIDIARY means any organization that, at
(CONTINUED) 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.
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.
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.
p. VOICE INITIATED REDEMPTION means any
redemption of shares issued by an INVESTMENT
COMPANY which is requested by voice over the
telephone.
q. VOICE INITIATED FUNDS TRANSFER INSTRUCTION
means any VOICE INITIATED REDEMPTION or
VOICE INITIATED ELECTION.
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 CLAUSES a. loss not reported to the COMPANY in writing
within sixty (60) days after termination of
this Bond as an entirety;
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;
c. loss resulting from the effects of nuclear
fission or fusion or radioactivity;
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;
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;
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.;
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 - h. loss resulting from dishonest acts by any
APPLICABLE TO ALL member of the Board of Directors or Board of
INSURING CLAUSES Trustees of the ASSURED who is not an
(CONTINUED) EMPLOYEE, acting alone or in collusion with
others;
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 a. loss caused by an EMPLOYEE, provided,
INSURING CLAUSE 1. 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 - f. loss resulting from the failure for any
APPLICABLE TO ALL reason of a financial or depository
INSURING CLAUSES EXCEPT institution, its receiver or other
INSURING CLAUSE 1. liquidator to pay or deliver funds or other
(CONTINUED) 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 a. loss resulting from the complete or partial
INSURING CLAUSES 1., non-payment of or default on any loan
4., AND 5. 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- 5. At all times prior to termination of this Bond,
REDUCTION AND NON- this Bond shall continue in force for the limit
ACCUMULATION OF stated in the applicable sections of ITEM 2. of
LIABILITY 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- d. any one casualty or event other than those
REDUCTION AND NON- specified in a., b., or c. above, shall be
ACCUMULATION OF deemed to be one loss and shall be limited
LIABILITY to the applicable LIMIT OF LIABILITY stated
(CONTINUED) 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 - 7. a. The ASSURED shall give the COMPANY notice
PROOF - LEGAL thereof at the earliest practicable moment,
PROCEEDINGS AGAINST not to exceed sixty (60) days after
COMPANY 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 - f. Proof of loss involving VOICE INITIATED
PROOF - LEGAL FUNDS TRANSFER INSTRUCTION shall include
PROCEEDINGS AGAINST electronic recordings of such instructions.
COMPANY
(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 - 11. In the event of a payment under this Bond, the
ASSIGNMENT - RECOVERY 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 - d. fourth, to the ASSURED in satisfaction of
ASSIGNMENT - RECOVERY any loss suffered by the ASSURED which was
(CONTINUED) not covered under this Bond.
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 If any partner, director, trustee, or officer or
(CONTINUED) 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 If this Bond is for a joint ASSURED, no charge or
(CONTINUED) 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, 2009 EXECUTIVE RISK SPECIALTY INSURANCE
Endorsement/Rider No. 1
To be attached to and
form a part of Bond No. 82052988
Issued to: FLAHERTY & CRUMRINE INCORPORATED / PREFERRED INCOME OPPORTUNITY FUND
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.
/s/ Robert Hamburger
----------------------------------------
Authorized Representative
17-02-2437 (12/2006) rev.
Page 1
Effective date of
this endorsement: May 15, 2009 EXECUTIVE RISK SPECIALTY INSURANCE
Endorsement No.: 2
To be attached to and form a part of Bond
Number: 82052988
Issued to: FLAHERTY & CRUMRINE INCORPORATED / PREFERRED INCOME OPPORTUNITY FUND
COMPLIANCE WITH APPLICABLE TRADE SANCTION LAWS RIDER
It is agreed that this insurance does not apply to the extent that trade or
economic sanctions or other laws or regulations prohibit the coverage provided
by this insurance.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: May 7, 2009
/s/ Robert Hamburger
----------------------------------------
Authorized Representative
Form 14-02-9228 (Ed. 4/2004)
EXECUTIVE RISK
SPECIALTY INSURANCE
Endorsement No: 3
Bond Number: 82052988
NAME OF ASSURED: FLAHERTY & CRUMRINE INCORPORATED / PREFERRED INCOME OPPORTUNITY
FUND
PREMIUM ENDORSEMENT
It is agreed that:
1. The premium for this Bond for the period May 15, 2009 to May 15, 2010
is:
Premium: Two Thousand Two Hundred Dollars ($2,200.00)
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, 2009.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: May 7, 2009
/s/ Robert Hamburger
----------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-0735 (Rev. 1-97)
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)
POLICYHOLDER
DISCLOSURE NOTICE OF
TERRORISM INSURANCE COVERAGE
(FOR POLICIES WITH NO TERRORISM EXCLUSION OR SUBLIMIT)
You are hereby notified that, under the Terrorism Risk Insurance Act (the
"Act"), effective December 26, 2007, this policy makes available to you
insurance for losses arising out of certain acts of terrorism. Terrorism is
defined as any act certified by the Secretary of the Treasury, in concurrence
with the Secretary of State and the Attorney General of the United States, to be
an act of terrorism; to be a violent act or an act that is dangerous to human
life, property or infrastructure; to have resulted in damage within the United
States, or outside the United States in the case of an air carrier or vessel or
the premises of a United States Mission; and to have been committed by an
individual or individuals as part of an effort to coerce the civilian population
of the United States or to influence the policy or affect the conduct of the
United States Government by coercion.
You should know that the insurance provided by your policy for losses caused by
acts of terrorism is partially reimbursed by the United States under the formula
set forth in the Act. Under this formula, the United States pays 85% of covered
terrorism losses that exceed the statutorily established deductible to be paid
by the insurance company providing the coverage.
However, if aggregate insured losses attributable to terrorist acts certified
under the Act exceed $100 billion in a Program Year (January 1 through December
31), the Treasury shall not make any payment for any portion of the amount of
such losses that exceeds $100 billion.
10-02-1281 (Ed. 1/2003)
If aggregate insured losses attributable to terrorist acts certified under the
Act exceed $100 billion in a Program Year (January 1 through December 31) and we
have met our insurer deductible under the Act, we shall not be liable for the
payment of any portion of the amount of such losses that exceeds $100 billion,
and in such case insured losses up to that amount are subject to pro rata
allocation in accordance with procedures established by the Secretary of the
Treasury.
The portion of your policy's annual premium that is attributable to insurance
for such acts of terrorism is: $ -0-.
If you have any questions about this notice, please contact your agent or
broker.
10-02-1281 (Ed. 1/2003)
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 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, 2009 MEETING OF THE
BOARD OF DIRECTORS OF FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND
INCORPORATED AT WHICH A MAJORITY OF DIRECTORS WHO ARE NOT "INTERESTED PERSONS"
APPROVED THE AMOUNT AND FORM OF THE CURRENT BOND FOR THE PERIOD FROM MAY 15,
2009 TO MAY 15, 2010:
RESOLVED: That the renewal of the fidelity bond coverage for the period from
May 15, 2009 to May 15, 2010, which provides coverage in the
aggregate amount of $450,000, is hereby approved; and further
RESOLVED: That it is the finding of the Directors at this Meeting that the
fidelity bond (the "Bond") issued through Chubb Group of Insurance
Companies in the amount of $450,000 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
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 $2,200 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.