Surety Bond News

Viatical settlement providers and brokers must abide by a new law in the state of Ohio. The new law, titled HB 404, states that viatical settlement brokers and providers must provide a bond from an insurer licensed in the state in the quantity of $250,000. There are other options besides the surety bond that will meet the requirement such as a deposit of cash, a certificate of deposit, or securities. The bond allows the Superintendent of Insurance to make recovery for any individual in the state who suffered damages resulting from an erroneous act, failure to act or conviction of fraud that were caused by a licensed viatical settlement provider/broker. HB 404 is based on new model legislation from the National Association of Insurance Commissioners.

SB 704 is a new law enacted in West Virginia which regulates viatical settlement providers and brokers. The law requires licensure and proof of financial accountability through a surety bond, cash, or cash equivalents. The bond must be $250,000 and from a surety company licensed in the state. The Commissioner of Insurance has the authority to waive the financial requirement if the applicant shows proof that an instrument has been filed within the applicant’s home state. The bond acquired would have to be in favor of the State; it would also have to sanction the Insurance Commissioner to make recovery for any individual in this state suffering damages that resulted from failure to act, faulty performance, conviction of fraud or conviction of deceitful methods of the viatical settlement provider or agent. The National Association of Insurance Commissioners model legislation is the reason for the up rise of this new law.