Surety Bond News

New surety legislation provides an option for employers in Oklahoma State. The new law is named SB 878 and allows employers to act as self-insurers. Employers that choose to self-insure must obtain a surety bond. The Workers’ Compensation Court would establish the amount of the bond but must be at least equal to the average of yearly claims in the previous three years.

Oklahoma State has enacted a new bill concerning the surety industry. The new bill is named SB 780 and requires the service contract provider to obtain a surety bond or other security. The amount of the bond must be at least 5% of the gross premium received on the sale of the service contract for all contracts supplied and in force within Oklahoma and can also be no less than $25,000. Also required is a funded reserve account in addition to the bond. SB 780 will be effective November 1, 2011.

Oklahoma State has revised requirements currently in place regarding water supply construction permits. The Oklahoma Department of Environmental Quality has adopted modified regulations for public water supply construction which requires suppliers to obtain a performance bond or another form of guarantee to protect against equipment failure. The surety bond must be payable to the permittee in a quantity equivalent to the contract price for installation/equipment including an additional ten percent. The bond must be active for one year after the equipment is operating as oppose to the previous requirements which required the bond to be active for five years.

SB 610 is a new bill implemented in the State of Oklahoma relating to carbon dioxide injection wells. The new bill permits the Oklahoma Corporations Commission and the Department of Environmental Quality to implement regulations as may be appropriate to require surety bonds or “financial sureties” in relation to permits for carbon dioxide injection wells. SB 610 was enacted on June 2nd, 2009.

SB 608 is a new Oklahoma State law relating to “nonparticipating tobacco manufacturers” that was enacted this year. The new law requires “nonparticipating tobacco manufacturers” to acquire a surety bond to be included in the State’s directory of tobacco manufacturers and cigarette varieties. The nonparticipating manufacturers do not partake in the Master Settlement Agreement and as a substitute place funds in escrow account. The manufacturers also may be required to attain a surety bond if they have been predicted to create amplification of risk for disobedience of the law. The surety bond must be $50,000, or the quantity the manufacturer is obliged to deposit due to its prior calendar year’s sales in Oklahoma, whichever is more. SB 608 became active on January 1st, 2010.