Surety Bond News

Idaho legislation has changed concerning proprietary schools. The previous law required these schools to acquire a surety bond that could be no less than the total tuition and fees that the school collected from its students during the upcoming registration year. The new law is titled HB 204 and allows the State Board of Education to accept a bond in a lesser amount from newly registered schools for a period of 5 years or less; but only if the bond is accompanied by other financial instruments.

Promoters of combat sport matches will be affected by a new bill in the state of Idaho. The Idaho State Athletic Commission has implemented rules to enact the bill, HB 32 (2009), which allows other types of security to be used in place of the surety bond currently required of boxing promoters, kickboxing, wrestling and mixed martial arts matches. Should these promoters choose to opt out of getting a surety bond, there will now be alternatives in place in order to operate legally.

Proprietary schools will be affected by changes to current law in the state of Idaho. The Idaho Board of Education implemented temporary rules to revise the present regulations for proprietary schools. The changes apply SB 1012 (2009), which removed the surety bond requirement for individual proprietary school agents and in its place required the school to acquire a blanket bond to cover all of the agents. The school’s bond financially protects students in the event of a school’s closure and from fraud during the enrollment process. The previous law based the required bond size on the amount of students attending the school which ranged from $10,000 to $100,000. The new law states that the bond must be equal to the total tuition and fees charged by the school during the last registration year. The new rules also add “extended coverage clauses” to the bond which will be in effect 120 days after a schools closure; “extended coverage” means that claims can still go out on the bond 120 days after the schools closure.

A new law was enacted in the state of Idaho titled SB 1012 concerning proprietary schools. The new law alters the present law regarding proprietary schools by eradicating the surety bond required of its agents and instead asking the school to attain a single surety bond to cover them. The previous law required the school to acquire the agent’s bond, which indemnified student’s sustaining losses as a result of the agent perpetrating fraud or deception in relation to a solicitation for the sale of a course of study or ensuing from infringement of the law. The school’s surety bond indemnifies students for damages resulting from the schools closure. Conversely, like the agents bond, it also must indemnify students for damages resulting from deceit or misrepresentation in a solicitation for enrollment in the course of study. SB 1012 requires the surety bond to be an amount that the State Board of Education establishes by rule. The previous law based the quantity on the amount of students at the school and it varied from $10,000 to $100,000. As for the agent’s surety bond, written notice would be demanded 120 days before termination. SB 1012 became active on July 8th, 2009.

Both mortgage brokers and lenders within the state of Idaho must follow new legislation. Named HB 169, the new law was introduced on 2/18/2009 and abolishes the existing surety bond requirements for mortgage brokers and mortgage lenders. The previous law called for a surety bond in the quantity of $25,000 in addition to $10,000 for each branch. Under HB 169, the State now had a mortgage recovery fund as an alternative to a surety bond. HB 169 became active July 1st, 2009.