Surety Bond News

New legislation was introduced in the state of Illinois concerning care facilities. The new law, which is named SB 1704, requires care facilities to attain a surety bond or alternative security to protect resident funds that a facility’s employees managed against loss, thievery, and insolvency. SB 1704 became active on July 1st, 2010.

HB 2260 is a new bill that was activated in the state of Kansas affecting home inspectors. HB 2260 provides new stipulations for the surety bond required under present law for home inspectors, which must be at least $10,000. The new bill states that the surety bond must be from a State authorized corporate surety, and the surety bond must present its effective date and expiration date. Additionally, the new bill states that the surety bond will be conditioned on the inspector’s truthful work procedures and compliance with the regulations of all contracts into which they enter. As a final point, the law provides that despite of the amount of claims made against the surety bond or the number of years it remains in force, the collective/aggregate liability of the surety will in no event surpass the amount of the surety bond.

Indiana State has added a new law relating to loan brokers and mortgage loan originators within the state. Titled HB 1646, the new law requires loan brokers, mortgage loan originators and principal managers to be licensed. Both originators and principal managers are staff of the loan broker, and HB 1646 requires that the broker’s surety bond must cover the actions of such personnel. The surety bond figure is calculated by the sum amount of residential mortgage loans originated in the prior calendar year. If the sum is $5 million or less, the surety bond amount is $60,000; with amounts greater than $20 million, the surety bond amount is $75,000. As initially introduced, these surety bond amounts were $50,000, $100,000 and $150,000, correspondingly. The new law became active on January 1st, 2010.

A new bill was introduced on April 27th, 2009 concerning Insurance Code in the state of Louisiana. HB 369 amended the Insurance Code to establish separate definitions for surety and fidelity as lines of insurance. The previous law characterized both fidelity and surety as one line of insurance. HB 369 was put in to action on July 6th, 2009.

Kentucky State has implemented a new law concerning mortgage brokers and lenders. The new law which is titled HB 106 modifies the surety bond requirements for mortgage brokers and lenders, and subjects mortgage loan originators to registration and bonding in order to employ the S.A.F.E. Mortgage Licensing Act. The present law requires lenders to acquire a surety bond that is at least $250,000 while requiring brokers to acquire a surety bond of at least $50,000. Additionally, HB 106 requires mortgage lenders, brokers and originators to attain or to be covered by a surety bond. The bond quantities from the existing law were not altered. The new law provides for termination of the surety bond with 30 days notification, which the previous law did not identify, and also cancels the utilization of alternative types of security in place of surety bonds. HB 106 also requires the surety bond to be obtainable for the recovery of restitution. Present legislation already states that the surety bond has to be accessible for expenses, penalties and fees.