Surety Bond News

North Carolina implemented a new bill affecting state maintained streets and the homeowners association within the state. The new bill is named HB 182 and provides for the installation of traffic calming devices on State maintained roads in subdivisions with a homeowners association and districts where all property owners have instituted a contract for traffic tables or calming devices installed in the neighborhood. HB 182 requires the homeowners association or the district/neighborhood to acquire a performance bond with the Department of Transportation that is adequate to fund the maintenance or elimination of the traffic tables and calming devices, if the homeowners association, or district failed to preserve them. The surety bond must be active for three years from the time of installation of the devices or tables.

On 08/03/2008, a new law referred to as SB 741, was enacted in North Carolina. SB 741 was put in place concerning Unemployment Insurance Fund Contributions. The new regulation requires cash, a surety bond, or an irrevocable letter of credit provided by non-profit organizations that elect to become liable for payments in lieu of contributions into the State’s Unemployment Insurance Fund. Under the existing law, organizations making such an election must do so for at least a period of four calendar years. Any surety bonds acquired have to be from a company licensed in the state and must remain in effect for no less than two years; the bond has to be renewed, subject to the approval of the Employment Security Commission. The surety bonds purpose is to secure the payments the association makes.

In North Carolina, there is a new law enacted named HB 2499. The new law eradicated a bond requirement in connection with a potential water emergency during a drought. HB 2499 called for the diversion of water reserves during the emergency to the affected region in need. The individual controlling the water/sewage systems and the water lines became liable for any damages resulting from the placement of the temporary water lines. That individual had to post a surety bond that was conditioned on payment to any persons enduring any damages.

HB 2463, enacted on 08/17/2008, is a new North Carolina state law. HB 2463 manages mortgage servicers and requires them to follow the same licensing, bond and qualification provisions as mortgage lenders. The existing law requires a surety bond of $150,000. Alternatives to the bond are cash or securities in the same amount; as well as is a financial statement representing a net worth of $250,000. Existing law already authorizes and gives precedence to direct customer claims. HB 2463 became active on January 1, 2009.

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.