A new bill was introduced relating to wholesale drug distributors within the state of Maryland. The new bill was named HB 1195 and modifies the surety bond requirement for wholesale drug distributors, which under present law must acquire a surety bond or alternative equal security. The previous law required a surety bond in the quantity of at least $100,000 in association with attaining a permit. HB 1195 calculates the amount required by the distributor’s yearly gross receipts instead, so that if such receipts in the prior tax year were $10 million or greater, a $100,000 surety bond is required. A $50,000 surety bond is demanded if receipts are no more than $10 million.
The SFAA cooperated on this bill with the AIA to resist the Maryland Insurance Administration’s preliminary suggestion, which would have revoked the surety bond requirement. The compromise was reached, which will boost the availability of the surety bond for smaller distributors and any distributors subject to bonding requirements in numerous states that is reaching their bonding capacity. HB 1195 became active upon enactment.