Surety Bond News

Surplus line brokers are affected by revised surety law in Rhode Island. The new law is named SB 758/HB 5953 and modifies the surety bond requirements for surplus line brokers so that it pertains only to resident surplus line brokers.

Mortgage loan originators in Rhode Island no longer need to worry about a net worth requirement thanks to a new law that was enacted in August. The new law is named SB 307 and terminates the minimum net worth requirement that was required of mortgage loan originators; now only the surety bond is required.

Discount medical plan organizations operating in the State of Rhode Island must follow a new law titled HB 7606. The new law requires discount medical plan organizations to register and acquire a $100,000 surety bond. HB 7606 allows the Health Insurance Commissioner to utilize the surety bond at their discretion to secure the financial interest of the company’s members which includes reimbursement to consumers if the company’s registration is withdrawn. A state licensed insurance company must write the surety bond. Alternative types of security also would be authorized in place of the bond.

Mortgage loan originators are impacted by a new law enacted in the State of Rhode Island. The new law is named HB 5704/SB 461 and requires mortgage loan originators to obtain a surety bond that is in a quantity equivalent to the dollar amount of loans originated as established by the Director of the Department of Business Regulation. Should the originator be an employee or the exclusive agent of a mortgage broker or lender, then the employer’s surety bond could be used to satisfy the bond provisions for originators. HB 5704/SB 461 requires the Director of the Department of Business Regulation to set the surety bond amount through policies. The new law also includes a net worth requirement for mortgage brokers. For individuals that are already licensed as mortgage loan originators, HB 5704/SB 461 became active on July 31st, 2009; and the new law became active on January 1st, 2010 for new mortgage loan originator licensees.

On 07/05/2008, Rhode Island enacted a new law known as HB 7337. The new law enacts the Uniform Athlete Agent Act and removes the state’s athlete agent laws. Now with the updated law, it eliminates the bonding requirements established within the old law. HB 7337 became law lacking the Governor’s signature.