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Surety Admin
7. September 2010 14:25
Illinois SB 660 enacts the NAIC model legislation for public adjusters. The new law increases the current bond for such licensees from $5,000 to a minimum amount of $20,000. The new law allows for an irrevocable letter of credit to be furnished, which prior law did not permit. The bond must be in favor of the State and authorize the Director of Insurance to make recovery on behalf of any person sustaining injury from the erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices in his or her official capacity. The new law becomes effective on January 1, 2011.
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Surety Admin
7. September 2010 14:21
Illinois HB 6359 alters the bond required in connection with a certificate of registration to sell tangible property in the State. Current law mandates a surety bond or other security conditioned on the payment of all taxes due to the State, a county or a municipality. The new law allows the Department of Revenue (Department) to have discretion in requiring the bond and will set the parameters for considering whether the bond should be required. The Department must consider whether the registrant has defaulted on the money due or if the certificate of registration has been revoked in the past five years. This bill was in response to a State Auditor’s report that showed that bond requirement had not been enforced. The new law became effective upon enactment. ENACTED: 07/28/2010
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Surety Admin
7. September 2010 14:00
Hawaii SB 2603/HB 2278 replaces the current mortgage loan originator license bond requirements, enacted in 2009, with a recovery fund. The prior law required originators to be covered by a surety bond in an amount based on the dollar amount of the loans originated, and permitted originator to be covered by their employer’s bond. The Commissioner of Financial Institutions was authorized to promulgate rules to implement the bond requirement, but no regulations were promulgated. The new law requires licensees to pay into a fund instead that would be for any person aggrieved by an act, representation, transaction or conduct of a licensed mortgage loan originator resulting from the licensee’s fraud, misrepresentation or deceit. Such persons could recover from the fund with a court order in an amount of not more than $25,000 per transaction for damages sustained. The new law became effective on July 1, 2010.
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Surety Admin
7. September 2010 13:42
Hawaii SB 1062 requires the PEO to post a $250,000 surety bond in connection with a professional employment agreement with a client company in the State. The bond must be a “performance or financial guaranty type bond.” Only a single bond may be posted to fulfill this requirement. The bond must cover all of the PEO’s branch locations. The bond indemnifies a client company who suffered loss as a result the PEO’s nonperformance. Surety companies could cancel the bond with 30 days written notice. The new law adds a six-month tail after the bond was canceled during which the bond is liable for the PEO’s debts incurred while the bond was in effect. Originally, the bill would have required PEOs to maintain a positive working capital of not less than $100,000. If the PEO did not have a positive working capital, it could have posted a bond, in an amount that would make up the deficiency. The bill also originally contained contains provisions concerning employee coverage under insurance policies and bonds in connection with an employer’s participation in a PEO, which were based on model legislation introduced and enacted in other states in the past few sessions. The bill was amended in the Senate prior to passage to require a $1 million bond and to remove the coverage provisions. The bond amount was lowered to $250,000 in conference negotiations between the House and Senate prior to the bill’s final passage. The new law became effective upon enactment.
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