Securities held in book-entry systems may be used for purposes of deposits required by statute or arising from voluntary agreement with the Commissioner; provided that, all such deposits must be placed through an approved custodian located in Pulaski County, Arkansas.

Securities deposited with a clearing corporation or securities broker-dealer or held in the Federal Reserve book-entry system and used to meet the deposit requirements contemplated in this Section shall be under the control of the Commissioner and shall not be withdrawn by the insurer without the approval of the Commissioner. Any insurer holding securities in such manner shall provide to the Commissioner evidence issued by its custodian through which such insurer has deposited such securities in a clearing corporation or securities broker-dealer or through which such securities are held in the Federal Reserve book-entry system in order to establish that the securities are actually recorded in an account in the name of the custodian and that the records of the custodian reflect that such securities are held subject to the order of the Commissioner.

The custodian may make use of an agent in placing assets into the Federal Reserve book-entry system or a clearing institution or securities broker-dealer.