CHUBB GROUP OF INSURANCE COMPANIES DECLARATIONS
FINANCIAL INSTITUTION
15 Mountain View Road, Warren, New Jersey 07059 INVESTMENT COMPANY ASSET
PROTECTION BOND
NAME OF ASSURED (including its SUBSIDIARIES): Bond Number: 82052988
FLAHERTY & CRUMRINE / 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, 2008
to 12:01 a.m. on May 15, 2009
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 $ 600,000 $ 25,000
2. On Premises $ 600,000 $ 25,000
3. In Transit $ 600,000 $ 25,000
4. Forgery or 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/ THOMAS F. MOTAMED
SECRETARY PRESIDENT
/S/ ROBERT HAMBURGER
AUTHORIZED REPRESENTATIVE
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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
ASSURED 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.
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
EMPLOYEES - CONSOLIDATION, COMPANY, while this Bond is in force, merges
MERGER OR PURCHASE OR or consolidates with, or purchases or
ACQUISITION OF ASSETS OR acquires assets or liabilities of another
LIABILITIES - NOTICE TO institution, the ASSURED shall not have the
COMPANY coverage afforded under this Bond for loss
which has:
(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
NOTICE TO COMPANY 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 E. The COMPANY will indemnify the ASSURED for
ATTORNEYS' FEES 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
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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
(CONTINUED) 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,
(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
(CONTINUED) 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.
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,
(CONTINUED) 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.
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
APPLICABLE TO ALL INSURING COVER:
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
APPLICABLE TO ALL INSURING any member of the Board of Directors or
CLAUSES Board of Trustees of the ASSURED who is
(CONTINUED) not an 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
APPLICABLE TO ALL INSURING COVER:
CLAUSES EXCEPT INSURING
CLAUSE 1. a. loss caused by an EMPLOYEE, provided,
however, this Section 3.a. shall not
apply to loss covered under INSURING
CLAUSE 2. or 3. which results directly
from misplacement, mysterious
unexplainable disappearance, or damage
or destruction of PROPERTY;
b. loss through the surrender of property
away from premises of the ASSURED as a
result of a threat:
(1) to do bodily harm to any natural
person, except loss of PROPERTY
in transit in the custody of any
person acting as messenger of the
ASSURED, provided that when such
transit was initiated there was
no knowledge by the ASSURED of
any such threat, and provided
further that this Section 3.b.
shall not apply to INSURING
CLAUSE 7., or
(2) to do damage to the premises or
PROPERTY of the ASSURED;
c. loss resulting from payments made or
withdrawals from any account involving
erroneous credits to such account;
d. loss involving ITEMS OF DEPOSIT which
are not finally paid for any reason
provided however, that this Section
3.d. shall not apply to INSURING CLAUSE
10.;
e. loss of property while in the mail;
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 12 of 19
CONDITIONS AND
LIMITATIONS
SPECIFIC EXCLUSIONS - f. loss resulting from the failure for any
APPLICABLE TO ALL INSURING reason of a financial or depository
CLAUSES EXCEPT INSURING institution, its receiver or other
CLAUSE 1. liquidator to pay or deliver funds or
(CONTINUED) other PROPERTY to the ASSURED provided
further that this Section 3.f. shall
not apply to loss of PROPERTY resulting
directly from robbery, burglary,
misplacement, mysterious unexplainable
disappearance, damage, destruction or
removal from the possession, custody or
control of the ASSURED.
g. loss of PROPERTY while in the custody
of a TRANSPORTATION COMPANY, provided
however, that this Section 3.g. shall
not apply to INSURING CLAUSE 3.;
h. loss resulting from entries or changes
made by a natural person with
authorized access to a COMPUTER SYSTEM
who acts in good faith on instructions,
unless such instructions are given to
that person by a software contractor or
its partner, officer, or employee
authorized by the ASSURED to design,
develop, prepare, supply, service,
write or implement programs for the
ASSURED's COMPUTER SYSTEM; or
i. loss resulting directly or indirectly
from the input of data into a COMPUTER
SYSTEM terminal, either on the premises
of the customer of the ASSURED or under
the control of such a customer, by a
customer or other person who had
authorized access to the customer's
authentication mechanism.
SPECIFIC EXCLUSIONS - 4. THIS BOND DOES NOT DIRECTLY OR INDIRECTLY
APPLICABLE TO ALL INSURING COVER:
CLAUSES EXCEPT INSURING
CLAUSES 1., 4., AND 5. a. loss resulting from the complete or
partial non-payment of or default on
any loan whether such loan was procured
in good faith or through trick,
artifice, fraud or false pretenses;
provided, however, this Section 4.a.
shall not apply to INSURING CLAUSE 8.;
b. loss resulting from forgery or any
alteration;
c. loss involving a counterfeit provided,
however, this Section 4.c. shall not
apply to INSURING CLAUSE 5. or 6.
LIMIT OF LIABILITY/NON- 5. At all times prior to termination of this
REDUCTION AND NON- Bond, this Bond shall continue in force for
ACCUMULATION OF LIABILITY the limit stated in the applicable sections
of ITEM 2. of the DECLARATIONS,
notwithstanding any previous loss for which
the COMPANY may have paid or be liable to pay
under this Bond provided, however, that the
liability of the COMPANY under this Bond with
respect to all loss resulting from:
a. any one act of burglary, robbery or
hold-up, or attempt thereat, in which
no EMPLOYEE is concerned or implicated,
or
b. any one unintentional or negligent act
on the part of any one person resulting
in damage to or destruction or
misplacement of PROPERTY, or
c. all acts, other than those specified in
a. above, of any one person, or
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 13 of 19
CONDITIONS AND
LIMITATIONS
LIMIT OF LIABILITY/NON- d. any one casualty or event other than
REDUCTION AND NON- those specified in a., b., or c. above, shall
ACCUMULATION OF LIABILITY be deemed to be one loss and shall be limited
(CONTINUED) to the applicable LIMIT OF LIABILITY stated
in ITEM 2. of the DECLARATIONS of this Bond
irrespective of the total amount of such loss
or losses and shall not be cumulative in
amounts from year to year or from period to
period.
All acts, as specified in c. above, of any
one person which
i. directly or indirectly aid in any way
wrongful acts of any other person or
persons, or
ii. permit the continuation of wrongful
acts of any other person or persons
whether such acts are committed with or
without the knowledge of the wrongful acts of
the person so aided, and whether such acts
are committed with or without the intent to
aid such other person, shall be deemed to be
one loss with the wrongful acts of all
persons so aided.
DISCOVERY 6. This Bond applies only to loss first
discovered by an officer of the ASSURED
during the BOND PERIOD. Discovery occurs at
the earlier of an officer of the ASSURED
being aware of:
a. facts which may subsequently result in
a loss of a type covered by this Bond,
or
b. an actual or potential claim in which
it is alleged that the ASSURED is
liable to a third party,
regardless of when the act or acts causing or
contributing to such loss occurred, even
though the amount of loss does not exceed the
applicable DEDUCTIBLE AMOUNT, or the exact
amount or details of loss may not then be
known.
NOTICE TO COMPANY - 7. a. The ASSURED shall give the COMPANY
PROOF - LEGAL PROCEEDINGS notice thereof at the earliest
AGAINST COMPANY practicable moment, not to exceed sixty
(60) days after discovery of loss, in
an amount that is in excess of 50% of
the applicable DEDUCTIBLE AMOUNT, as
stated in ITEM 2. of the DECLARATIONS.
b. The ASSURED shall furnish to the
COMPANY proof of loss, duly sworn to,
with full particulars within six (6)
months after such discovery.
c. Securities listed in a proof of loss
shall be identified by certificate or
bond numbers, if issued with them.
d. Legal proceedings for the recovery of
any loss under this Bond shall not be
brought prior to the expiration of
sixty (60) days after the proof of loss
is filed with the COMPANY or after the
expiration of twenty-four (24) months
from the discovery of such loss.
e. This Bond affords coverage only in
favor of the ASSURED. No claim, suit,
action or legal proceedings shall be
brought under this Bond by anyone other
than the ASSURED.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 14 of 19
CONDITIONS AND
LIMITATIONS
NOTICE TO COMPANY - f. Proof of loss involving VOICE INITIATED
PROOF - LEGAL PROCEEDINGS FUNDS TRANSFER INSTRUCTION shall
AGAINST COMPANY include electronic recordings of such
(CONTINUED) instructions.
DEDUCTIBLE AMOUNT 8. The COMPANY shall not be liable under any
INSURING CLAUSES of this Bond on account of
loss unless the amount of such loss, after
deducting the net amount of all reimbursement
and/or recovery obtained or made by the
ASSURED, other than from any Bond or policy
of insurance issued by an insurance company
and covering such loss, or by the COMPANY on
account thereof prior to payment by the
COMPANY of such loss, shall exceed the
DEDUCTIBLE AMOUNT set forth in ITEM 3. of the
DECLARATIONS, and then for such excess only,
but in no event for more than the applicable
LIMITS OF LIABILITY stated in ITEM 2. of the
DECLARATIONS.
There shall be no deductible applicable to
any loss under INSURING CLAUSE 1. sustained
by any INVESTMENT COMPANY.
VALUATION 9. BOOKS OF ACCOUNT OR OTHER RECORDS
The value of any loss of PROPERTY consisting
of books of account or other records used by
the ASSURED in the conduct of its business
shall be the amount paid by the ASSURED for
blank books, blank pages, or other materials
which replace the lost books of account or
other records, plus the cost of labor paid by
the ASSURED for the actual transcription or
copying of data to reproduce such books of
account or other records.
The value of any loss of PROPERTY other than
books of account or other records used by the
ASSURED in the conduct of its business, for
which a claim is made shall be determined by
the average market value of such PROPERTY on
the business day immediately preceding
discovery of such loss provided, however,
that the value of any PROPERTY replaced by
the ASSURED with the consent of the COMPANY
and prior to the settlement of any claim for
such PROPERTY shall be the actual market
value at the time of replacement.
In the case of a loss of interim
certificates, warrants, rights or other
securities, the production of which is
necessary to the exercise of subscription,
conversion, redemption or deposit privileges,
the value of them shall be the market value
of such privileges immediately preceding
their expiration if said loss is not
discovered until after their expiration. If
no market price is quoted for such PROPERTY
or for such privileges, the value shall be
fixed by agreement between the parties.
OTHER PROPERTY
The value of any loss of PROPERTY, other than
as stated above, shall be the actual cash
value or the cost of repairing or replacing
such PROPERTY with PROPERTY of like quality
and value, whichever is less.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 15 of 19
CONDITIONS AND
LIMITATIONS
(CONTINUED)
SECURITIES SETTLEMENT 10. In the event of a loss of securities covered
under this Bond, the COMPANY may, at its sole
discretion, purchase replacement securities,
tender the value of the securities in money,
or issue its indemnity to effect replacement
securities.
The indemnity required from the ASSURED under
the terms of this Section against all loss,
cost or expense arising from the replacement
of securities by the COMPANY'S indemnity
shall be:
a. for securities having a value less than
or equal to the applicable DEDUCTIBLE
AMOUNT - one hundred (100%) percent;
b. for securities having a value in excess
of the DEDUCTIBLE AMOUNT but within the
applicable LIMIT OF LIABILITY - the
percentage that the DEDUCTIBLE AMOUNT
bears to the value of the securities;
c. for securities having a value greater
than the applicable LIMIT OF LIABILITY
- the percentage that the DEDUCTIBLE
AMOUNT and portion in excess of the
applicable LIMIT OF LIABILITY bears to
the value of the securities.
The value referred to in Section 10.a., b.,
and c. is the value in accordance with
Section 9, VALUATION, regardless of the value
of such securities at the time the loss under
the COMPANY'S indemnity is sustained.
The COMPANY is not required to issue its
indemnity for any portion of a loss of
securities which is not covered by this Bond;
however, the COMPANY may do so as a courtesy
to the ASSURED and at its sole discretion.
The ASSURED shall pay the proportion of the
Company's premium charge for the Company's
indemnity as set forth in Section 10.a., b.,
and c. No portion of the LIMIT OF LIABILITY
shall be used as payment of premium for any
indemnity purchased by the ASSURED to obtain
replacement securities.
SUBROGATION - ASSIGNMENT - 11. In the event of a payment under this Bond,
RECOVERY 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 - d. fourth, to the ASSURED in satisfaction
RECOVERY of any loss suffered by the ASSURED
(CONTINUED) which was 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
(CONTINUED) or supervisory employee of an ASSURED not
acting in collusion with an EMPLOYEE learns
of any dishonest act committed by such
EMPLOYEE at any time, whether in the
employment of the ASSURED or otherwise,
whether or not such act is of the type
covered under this Bond, and whether against
the ASSURED or any other person or entity,
the ASSURED:
a. shall immediately remove such EMPLOYEE
from a position that would enable such
EMPLOYEE to cause the ASSURED to suffer
a loss covered by this Bond; and
b. within forty-eight (48) hours of
learning that an EMPLOYEE has committed
any dishonest act, shall notify the
COMPANY, of such action and provide
full particulars of such dishonest act.
The COMPANY may terminate coverage as
respects any EMPLOYEE sixty (60) days after
written notice is received by each ASSURED
INVESTMENT COMPANY and the Securities and
Exchange Commission, Washington, D.C. of its
desire to terminate this Bond as to such
EMPLOYEE.
OTHER INSURANCE 14. Coverage under this Bond shall apply only as
excess over any valid and collectible
insurance, indemnity or suretyship obtained
by or on behalf of:
a. the ASSURED,
b. a TRANSPORTATION COMPANY, or
c. another entity on whose premises the
loss occurred or which employed the
person causing the loss or engaged the
messenger conveying the PROPERTY
involved.
CONFORMITY 15. If any limitation within this Bond is
prohibited by any law controlling this Bond's
construction, such limitation shall be deemed
to be amended so as to equal the minimum
period of limitation provided by such law.
CHANGE OR MODIFICATION 16. This Bond or any instrument amending or
affecting this Bond may not be changed or
modified orally. No change in or modification
of this Bond shall be effective except when
made by written endorsement to this Bond
signed by an authorized representative of the
COMPANY.
If this Bond is for a sole ASSURED, no change
or modification which would adversely affect
the rights of the ASSURED shall be effective
prior to sixty (60) days after written notice
has been furnished to the Securities and
Exchange Commission, Washington, D.C., by the
acting party.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 18 of 19
CONDITIONS AND
LIMITATIONS
CHANGE OR MODIFICATION If this Bond is for a joint ASSURED, no
(CONTINUED) charge or modification which would adversely
affect the rights of the ASSURED shall be
effective prior to sixty (60) days after
written notice has been furnished to all
insured INVESTMENT COMPANIES and to the
Securities and Exchange Commission,
Washington, D.C., by the COMPANY.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 19 of 19
ENDORSEMENT/RIDER
Effective date of
this endorsement/rider: May 15, 2008 FEDERAL INSURANCE COMPANY
Endorsement/Rider No. 1
To be attached to and
form a part of Bond No. 82052988
Issued to: FLAHERTY & CRUMRINE / 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, 2008 FEDERAL INSURANCE COMPANY
Endorsement No.: 2
To be attached to and form a part of Bond
Number: 82052988
Issued to: FLAHERTY & CRUMRINE / 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 22, 2008
/S/ ROBERT HAMBURGER
AUTHORIZED REPRESENTATIVE
Form 14-02-9228 (Ed. 4/2004)
FEDERAL INSURANCE COMPANY
Endorsement No: 3
Bond Number: 82052988
NAME OF ASSURED: FLAHERTY & CRUMRINE / PREFERRED INCOME OPPORTUNITY
FUND
PREMIUM ENDORSEMENT
It is agreed that:
1. The premium for this Bond for the period May 15, 2008 to May 15, 2009 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, 2008.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: May 22, 2008
/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. 5/2007)
THE FOLLOWING RESOLUTIONS WERE ADOPTED AT THE APRIL 18, 2008 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,
2008 TO MAY 15, 2009:
RESOLVED: That the renewal of the fidelity bond coverage for
the period from May 15, 2008 to May 15, 2009, which
provides coverage in the aggregate amount of
$600,000, 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 $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 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 a Special Committee of the Board of Directors,
consisting of Mr. Wulf and Mr. Crumrine be, and
hereby is, established for the purposes of
determining the Fund's fidelity bond insurance
coverage and related premiums for the period from May
15, 2008 to May 15, 2009, such determinations to be
based upon information reviewed by and recommended by
Fund management; 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.
THE FOLLOWING RESOLUTIONS WERE ADOPTED AT THE MAY 14, 2008 MEETING OF THE
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF FLAHERTY & CRUMRINE PREFERRED
INCOME OPPORTUNITY FUND INCORPORATED AT WHICH THE DIRECTORS COMPRISING THE
SPECIAL COMMITTEE APPROVED THE COVERAGE AND RELATED PREMIUM IN CONNECTION WITH
THE CURRENT BOND FOR THE PERIOD FROM MAY 15, 2008 TO MAY 15, 2009:
RESOLVED: That the renewal of the fidelity bond coverage for
the period from May 15, 2008 to May 15, 2009, which
provides coverage in the aggregate amount of
$600,000, 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 $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 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.