Arkansas General Business Corporation Bond Update

ArkansasIn the state of Arkansas, a law concerning “general business corporations” and their ability to write surety bonds in municipalities was altered. Titled HB 2231, the law as presented, would have authorized “general business corporations” to write certain license, permit and notary public surety bonds in municipalities in the State. The said corporations would only have been obliged to register with the Insurance Commissioner and deposit securities in a quantity of $10,000. The general business corporations could not have issued surety bonds over $5,000 before the law was revised. The opposition to this bill was lead by CNA Surety and was victorious in having the bill amended. The new law states that the surety’s responsibility on a notary bond shall be exclusively to the State and the surety bond is only for the State’s benefit. HB 2231 also restricts the surety company’s aggregate liability to the amount of the surety bond. The changes permitting general business corporations to write surety bonds while lacking the license of an insurer and entirely subject to state insurance regulation were taken off of the bill.