Surety Bond News

Maryland State has added a new law relating to debt settlement service providers. The new law is named SB 741/HB 1022 and requires debt settlement service providers to obtain a surety bond if they have a client deposit funds in an account for the payment of debt settlement fees. The surety bond required must be $50,000 and must be issued by a state authorized surety company. The new law will be effective October 1, 2011.

A new bond requirement has been added to Maryland state legislation. The new law, which is named SB 741/HB 1022, requires debt settlement service providers within the state to acquire a $50,000 surety bond in order to register with the state. The surety bond must be written by a state authorized surety company and debt settlement service providers must have one in order to operate legally.

Maryland State enacted a new law concerning mortgage loan originators. The new law is named SB 269 and requires mortgage loan originators to be covered by a surety bond in a quantity that is calculated by the dollar amount of the loans originated. Should the loan originator be a member of staff or an exclusive agent of a mortgage lender subject to Maryland’s existing surety bond requirements, coverage under the employer’s bond would satisfy the law’s stipulations. SB 269 requires the surety bond to provide coverage for all originators. The present law requires mortgage lenders to attain a surety bond in an amount calculated by the loan volume, which varies from $50,000 to $150,000. Lenders must attain a surety bond for each individual license and can acquire a blanket surety bond to cover all licenses, which is capped at $750,000.

SB 269 also produces a separate licensing requirement for associated insurance producer-mortgage loan originators where they are obliged to acquire the license bond required of mortgage lenders if licensed as one, or be covered by a surety bond of a mortgage lender. The surety bond in this instance will protect all affiliated insurance producer-mortgage loan originators and be a quantity of $1 million or “another amount” determined by regulations.

A new bill was enacted in Maryland concerning title insurance producers. The new bill is named SB 86 and boosts the quantity of the license bond required for title insurance producers from $100,000 to $150,000. The present law allows a letter of credit in place of the surety bond. The law was the initiative of the Maryland Insurance Administration and was thought to increase customer protection. As originally introduced, the surety bond quantity would have been amplified to $250,000. The SFAA cooperated with the AIA and its local advisors on concerns that the increase came with the potential to decrease the accessibility of the surety bond for some producers. The AIA was triumphant in having the increase reduced to $150,000. SB 86 also directs the Commission to study the title insurance business in Maryland, as well as the adequacy of the bonding requirements for individual producers. The new bill became active on October 1st, 2009.

Introduced on February 13th, 2009 was a new law concerning utility installers within Maryland. HB 1221 is the title of the new law and requires a surety bond or other security in association with a right-of-way permit for the installation and implementation of utilities in Washington County. The surety bond guarantees the refurbishment of county property at the location on which the work was executed. HB 1221 was enacted on 05/07/2009.