Surety Bond News

SB 778 is a new bill that was enacted in the State of Texas regarding identity recovery services. The new bill sets financial stipulations for providers of identity recovery service contracts, requiring a compensation insurance policy and a funded reserve account, including financial security in the form of a surety bond, a cash deposit, securities, a letter of credit or another variety of satisfactory security. The financial security must be in a quantity that is no less than $25,000 or 5% of the gross consideration the provider received from consumers resulting from the sale of all identity recovery service contracts issued and outstanding in the State, less any claims paid whichever quantity is larger. In place of such financial instruments, the provider or its parent company have the option to sustain a net worth or stockholder’s equity of a minimum of $100 million.

A new West Virginia law has affected gaming facilities within the state. The new law is labeled SB 575 and modifies the surety bond requirement for gaming facilities. The present law requires a surety bond in the quantity of $5 million to guarantee the payment of all required payments; also guaranteeing that the licensee will maintain all books and records and manage gaming in cooperation with the law. SB 575 eliminates the condition on the surety bond for compliance in regards to the conduct of gaming procedures and bookkeeping practices. The new law also directs the State Lottery Commission to establish the quantity of the surety bond in the place of a $5 million surety bond. The surety bond must be sufficient to protect against the non payment of money owed to the State. SB 575 now identifies that a surety licensed to write insurance is required for the surety bond. The previous law did not make such specifications.

SB 86 is a new bill that was enacted in Vermont State concerning trustees. The new bill states that a trustee is required to acquire a surety bond to guarantee the performance of their responsibilities only if the probate court requires it, or if the language of the trust required it and the court has not dispensed with the obligation. The previous law required that a trustee attain a surety bond, but stated that a corporate surety was not required if the will demonstrated that no surety bond or surety was essential. SB 86 allows the probate court to establish the amount of the surety bond, its liabilities, and whether sureties are obligatory. The probate court may adjust or cancel a bond at any moment. Additionally, the liability of the trustee or of any sureties included on the surety bond for acts or omissions of the trustee is not discharged or impacted by the trustee’s resignation.

Surplus line brokers within the State of Washington must abide by a new law referred to as HB 1568. The new law modifies the surety bond requirements for surplus line brokers. The previous law called for a $100,000 surety bond. HB 1568 requires a surety bond in the quantity of $2,500, or 5% of the premiums from the placement of coverage with surplus line insurers in the preceding calendar year, whichever is larger. The surety bond amount is capped at $100,000 and it will be calculated by the premium volume. The new legislation became active on July 1st, 2009.

Discount medical health care programs are impacted by a new bill in Texas State. The new bill, which is referred to as HB 4341 requires operators of discount medical health care programs to acquire a $50,000 surety bond. All insurers who attained a certificate of authority under the present law would be excused from the surety bond requirement. HB 4341 directs the Insurance Department to establish the specifics of the surety bond requirement. The new bill became active on April 1st, 2010.