(a) Except as provided in subsection (c) of this section, the State shall purchase a bond for each fiduciary in accordance with Title 9, Subtitle 17 of the State Government Article.

(b) (1) Unless a fiduciary is bonded as required by subsection (a) of this section, the fiduciary may not exercise custody or control of any assets of a State system.

(2) A fiduciary may not allow another fiduciary to act in violation of paragraph (1) of this subsection.

(c) (1) The State may satisfy the requirement for a bond under subsection (a) of this section by purchasing an insurance policy.

(2) The State Treasurer, in consultation with the Board of Trustees, shall determine the type and amount of coverage provided by a policy purchased under paragraph (1) of this subsection.