Surety Bond News

The United States Department of the Treasury printed modifications to the 2009 edition of Circular 570. The Department of the Treasury canceled the certificates of authority as a satisfactory surety on Federal bonds for various companies including Excelsior Insurance Company, Peerless Indemnity Insurance Company, Consolidated Insurance Company, Indiana Insurance Company, The Netherlands Insurance Company and The Midwestern Indemnity Company. The cancellations were effectual on October 8th, 2009. The surety bonds that have already been issued and in effect from these companies will be able to expire and continuous surety bonds will not be renewed.

In Florida, a new bill was introduced relating to the states Data Center System. The new law which is named SB 1892 adjusts the State’s Data Center System and states that the data center is to enter into service agreements with its clientele. For main data centers that a state agency does not manage, the agreements may ask to provide a surety or a performance bond. SB 1892 was enacted on 06/10/2008.

Introduced on March 6th, 2008, SB 2534 is a new law regarding a health insurance program in the state of Florida. SB 2534 creates the Florida Health Choices, Inc. for a statewide reasonably priced health insurance program. The new law also allows Florida Health Choices, Inc. to ask for performance bonds for its vendor contracts. SB 2534 was enacted and effective on 05/21/2008.

A new law was enacted concerning guaranteed energy savings contracts in the state of Massachusetts. The new law, SB 2768, demands a performance bond for all guaranteed energy savings contracts. The performance bond quantity must be 100% of the contract value from a surety company licensed in the commonwealth and also must be listed on Circular 570 of the U.S. Treasury Department. Such energy savings contracts entail the procurement of energy management services in order to accomplish energy savings at public facilities and establishments.

On 05/26/2008, a new law was introduced referred to as HB 2436. The new North Carolina law permits the North Carolina Department of Health and Human Services to have discretion when requiring Medicaid-enrolled suppliers to provide a performance bond, letter of credit, or an alternative financial instrument in an amount no more than $100,000. Previous law required the bond as a stipulation of receiving Medicaid payments. HB 2436 states that the health department may require a surety bond when the provider has failed to display financial viability, if it is concluded that “significant potential” for deception and fraud existed, or if the department determines that it is best for the Medicaid program.