Surety Bond News

Appraisal management companies are affected by a new law enacted in the State of Oregon. The new law is titled HB 3624a and requires appraisal management companies to register and acquire a surety bond or letter of credit in the amount of $25,000. The surety bond would be conditioned on the payment of all sums that are to be paid to individuals executing real estate appraisal services for the business and all funds due originating from a judgment against the business for negligent or inappropriate real estate appraisal actions; including activity that causes a breach of its contracts. The surety company can terminate the surety bond with 30 days of written notification.

A new bill was enacted relating to life settlement insurance in the State of Oregon. The new law is titled SB 973 and revised the present law regarding life settlement insurance, which states that the Director of the Department of Consumer and Business Services has the option to implement regulations to require life settlement providers and brokers to attain a surety bond or acquire an errors and omissions insurance policy. SB 973 added a licensing requirement for life settlement investment agents and subjected them to a modified bonding obligation for life settlement providers and brokers. The new law states that such licensees must display financial responsibility through a surety bond, a cash deposit, certificates of deposit, securities, or any mixture of these in a quantity that the Director of the Department of Consumer and Business Services would establish. SB 973 states that the Director may authorize evidence of financial instruments that met the requirements of the proposed legislation had been filed with a minimum of one state where the applicant is licensed as a life settlement provider, broker or investment agent.

The State of Oregon enacted a new law on 5/26/2009 regarding the Uniform Commercial Code. The new law is titled SB 558 and modifies Oregon’s implementation of the Uniform Commercial Code to conform to the Restatement of the Law of Surety by the American Law Institute. In the midst of the several amendments, a surety now is further defined to include any “other secondary obligor” in addition to the present description as a “guarantor.”

The State of Oregon introduced a new law on January 12th, 2009 which is concerning lottery contractors. The new law, which is referred to as SB 81, authorizes alternative security to be acquired in place of the surety bond required of lottery contractors. SB 81 was enacted on 5/29/2009.

In Oregon, a new bill was introduced relating to exchange facilitators. The new law, which is named HB 3484, regulates exchange facilitators; they facilitate like-kind property exchanges under the federal tax code. HB 3484 requires such individuals to be licensed, and must acquire at least one of the following: a fidelity bond or bonds in a quantity that is no less than $1 million from a State licensed insurer; post cash, securities, or an irrevocable letter of credit for the equal quantity. The new law also authorizes facilitators to deposit the funds utilized in an exchange in to an escrow account or an eligible trust. The facilitator also has the option to be listed as a named insured on one or more fidelity bonds that has an aggregate amount that is no less than $1 million.