HB 2294, enacted 10/09/2008, adds a new requirement for debt management services to abide by. The new law calls for debt management service companies to be licensed, to acquire a $50,000 bond, and to have proof of liability/fidelity insurance. The bond acquired must be from a surety approved by the Department of Banking and must be licensed in the Commonwealth. The bond will run to the Commonwealth for the aid of consumers who suffered damages from the debt management providers/their agent’s defiance of the new law or the regulations implementing it. The function of the fidelity policy is to cover against any theft, fraud or dishonesty of the provider’s employees, directors or principals.
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.