(a) Bonds or other securities eligible for the investment of trust funds;

(b) A surety bond;

(c) An irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008; or

(d) A combination of the securities, letters of credit and surety bond.

(2) The surety bond shall be issued by a surety company authorized to transact business in this state and approved by the Director of the Department of Consumer and Business Services. The bond or letter of credit shall provide that the principal and surety or letter of credit issuer shall indemnify the several owners of the funds held in trust against loss due to the failure of the trust company, bank or extranational institution.

(3) Notwithstanding the provisions of ORS 708A.415, the securities, the surety bond, the letter of credit or the securities, the surety bond and the letters of credit together shall be in an amount equal to the portion of the trust funds not insured by the United States Government or any agency or instrumentality of the United States.

(4) If the trust company, bank or extranational institution fails, the owners of the funds held in trust for investment or distribution have a lien on the bonds or other securities set apart, or a right of action on the surety bond and upon the letter of credit, in addition to their claim against the estate of the trust company, bank or extranational institution. [Amended by 1957 c.82 §2; 1973 c.797 §200; 1975 c.544 §29d; 1983 c.296 §5a; 1987 c.216 §5; 1991 c.331 §115; 1997 c.631 §216]