Missouri State has put forth new legislation this summer concerning grain dealers. The new law is named SB 356/HB 458 and it changes the surety bond required of grain dealers. The previous legislation required at least a $20,000 bond and could not surpass $300,000. Due to a the biggest grain dealer fraud scheme in Missouri history, the new law boosts the minimum bond amount to $50,000 and the maximum bond amount to $600,000. SB 356/HB 458 also requires dealers to sustain assets equivalent to 100% of its liabilities. Should a dealer have a negative working capital, the new legislation allows dealers to obtain a bigger bond to compensate for the deficiency.
When choosing a company to do business with, it’s difficult to tell whether or not it’s a credible one; even after doing research and looking in to an organizations history, it’ still possible to get scathed by dishonest individuals. This is what happened to numerous Missouri farmers in the most detrimental grain fraud scheme in the state’s history. (more…)
Jackson County politicians have avoided a big hurdle regarding the Kansas City Truman Sports Complex renovations. The Truman Sports Complex, home of the Kansas City Royals, almost lost hundreds of thousand of dollars due to an unfavorable choice in surety companies while shopping for surety bonds to renovate the stadium. According to Jackson County, they have discovered the lowest expense solution to the dilemma relating to the surety bonds used to revamp the Truman Sports Complex.
The surety company who wrote the original $22 million bond for the job went into bankruptcy, which caused the surety to lose its required AAA rating. The county was then going to be forced to look elsewhere for the surety bond which would end up costing roughly $200,000 in additional premium with a new surety company. But on Monday, the Jackson County Legislature authorized the waiving of the original AAA credit rating requirement that the surety company was to uphold avoiding the extra premium.
“This looks like a wonderful resolution,” said Dennis Waits, the new chairman of the Legislature.
The reasoning for the AAA credit rating requirement was to guarantee the financial strength of the surety company backing the bonds they wrote which protected public money. Obviously the surety company is not in great financial shape considering their bankruptcy so the county just modified the criteria the surety must meet. Normally, removing the AAA rating requirement negates the point of having the bond in the first place because now that the surety’s financial strength is more than questionable there is absolutely no guarantee that they can pay any claims that may arise. Being that much of the work is already complete, the risk that a claim will arise is minimal which makes this a reasonable solution. This resolution works out for the Royals because more time will be spent completing the stadium job as oppose to raising more funds to pay the additional premium of a new bond. The Kansas City Royals will now be playing ball in their new home sooner than later.
This is a perfect example of why it is so important to carefully choose the surety company that is backing your bonds. Most of the time it would be very risky to modify the financial requirements sureties must meet mid job, but in this case the majority of the work is done and there is a small possibility for a claim. Hopefully all goes well with the rest of the Truman Sports Complex project.
HB 1692 is a new law that was enacted in Missouri State relating to real estate appraisal management companies. The new legislation requires real estate appraisal management companies to acquire a $20,000 surety bond. HB 1692 states that additional particulars regarding the surety bond requirement will be established through regulations. The SFAA and AIA cooperated with the bill sponsors of HB 2152/SB 991, which if enacted would have required real estate appraisal management companies to attain a $250,000 surety bond in relation to registration. HB 1692 was the law and surety bond quantity settled on that was enacted.
New legislation was enacted regarding charter school financial officers in the state of Missouri. The new law, which is referred to as SB 291 authorizes the chief financial officer of a charter school to acquire an insurance policy supplying coverage for employee thievery in place of the surety bond required under the present law. The policy quantity can be no less than $500,000. SB 291 became active upon enactment.
The state of Missouri has implemented a new bill concerning mortgage originators. The new bill is named HB 382 and requires mortgage originators to be licensed and to be covered by a surety bond required of mortgage loan brokers. HB 382 asks residential mortgage loan brokers to acquire a surety bond that covers all of the mortgage originators that are the broker’s staff or agents. The quantity of the surety bond must mirror the dollar amount of loans originated. The surety bond amount is also capped at $1 million, with a bare minimum of $50,000. The Director of the Division of Finance will establish the levels of bonding by regulation. The previous law required residential mortgage loan brokers to acquire a license bond of $20,000. The bill provides for direct actions on the surety bond from borrowers. The new bill also canceled the option of a surety bond that was allowed in place of yearly auditing of a mortgage broker’s financial records. A $100,000 surety bond or a letter of credit was required in the place of the audit.