A new law was enacted in the state of Idaho titled SB 1012 concerning proprietary schools. The new law alters the present law regarding proprietary schools by eradicating the surety bond required of its agents and instead asking the school to attain a single surety bond to cover them. The previous law required the school to acquire the agent’s bond, which indemnified student’s sustaining losses as a result of the agent perpetrating fraud or deception in relation to a solicitation for the sale of a course of study or ensuing from infringement of the law. The school’s surety bond indemnifies students for damages resulting from the schools closure. Conversely, like the agents bond, it also must indemnify students for damages resulting from deceit or misrepresentation in a solicitation for enrollment in the course of study. SB 1012 requires the surety bond to be an amount that the State Board of Education establishes by rule. The previous law based the quantity on the amount of students at the school and it varied from $10,000 to $100,000. As for the agent’s surety bond, written notice would be demanded 120 days before termination. SB 1012 became active on July 8th, 2009.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog. He has held a range of different roles within the surety industry, from agent assistant to bond issuer, which gives him a unique insider perspective on surety related topics.