Indiana Bill to Require Bonding in P3s Goes to Study

Indiana Bill to Require Bonding in P3s Goes to Study 

Indiana HB 1301, as introduced, contained the amendments that SFAA drafted to require the design and construction portion of P3s to be bonded in Indiana. Our bonding amendments were part of the Insurance Department’s bill, and would have required 100% bonds, just as the Indiana Little Miller Act requires for any other project. In the House Insurance Committee, the bill was amended to require 50% payment and performance bonds, and on second reading on the House floor, the bond amount was further reduced to 25% before it later passed the House. It was not possible to reach an agreement to move HB 1301 forward in the Senate. It is likely that the issue of bonding on P3 projects in Indiana will be sent to a summer study committee, which is where the issue was last summer.

Members should visit Government Relations / General Info (Members) for more information.


2017-2018 Bond Obligee Guide updated

This guide is designed to serve obligees who may want to verify the
authenticity of surety bonds that they are being asked to accept. The
most reliable way to authenticate a surety bond is to contact the
issuing surety company directly. However, it is often difficult to
ascertain the correct address, telephone number or person to contact at
the surety.

Accordingly, this guide contains a list of SFAA surety
company members that have volunteered to be included together with
information as to how they can be contacted for the purposes of
authenticating a bond. Since participation in this program is voluntary,
not every surety company is listed.

Verify Your Bond – Bond Obligee Guide


Illinois Proposed Rules for Insurance Company Bonds Contain Provisions SFAA Sought

Illinois Proposed Rules for Insurance Company Bonds Contain Provisions SFAA Sought 

The proposed rules that the Illinois Department of Insurance has issued contain provisions implementing changes SFAA has long sought to make the bonds required for insurance companies to cover their employees and officers more workable. The proposed rules would eliminate the minimum discovery period in the bond and would instead require the coverage to be on a “discovery basis.” The proposed rules also would change the required bond amount so that it would be based on the guidance in the National Association of Insurance Commissioners Financial Condition Examiners’ Handbook. Currently, the bond amount is based on the amount of admitted assets of the company (as determined from year to year) filed with the Department in the company’s annual statement.

Members should visit Government Relations / General Info (Members) for more information.


SFAA Newsletter posted – January/February 2018 Edition

The 2018 January/February Edition of the SFAA Newsletter has been posted.  Beginning this year, each Newsletter will be available to the public. In addition to our regular Association news, we will be providing original content for our members and supporters to share. In this issue, we examine Carillion’s Collapse and Why Bonding Matters.

(for non-Members)

(for Members only)


Federal Agency Withdraws Hard Rock Mining Rule

Federal Agency Withdraws Hard Rock Mining Rule 

The U.S. Environmental Protection Agency (EPA) will not adopt final regulations for its proposed financial responsibility requirements for hard rock mining operations for metals and non-metallic fuel minerals that SFAA opposed. Surety bonds would have been accepted to meet the requirement and SFAA noted that the bond requirement could have been duplicative of existing state and federal reclamation bonding requirements. We also opposed provisions that would have permitted direct actions on the bond. Other stakeholders also noted the potential for duplicative financial responsibility requirements and the potential problems with the direct action provisions. The EPA agreed with these concerns and will not move forward with its proposal.


SFAA Submits Recommendations on Oregon Mortgage Servicers License Bond Rules

SFAA Submits Recommendations on Oregon Mortgage Servicers License Bond Rules 

SFAA made recommendations on the claims provisions to the Oregon Department of Consumer and Business Services concerning proposed rules for bonding mortgage loan servicers. The rules would require the bond to remain in place for five years after the mortgage servicer ceases to be licensed in the State. Direct actions also are permitted on the bond and claims must be filed before the bond expires. SFAA recommended that two or three years for the limitations period for claims would be more workable. SFAA also recommended that the limitations period to take action on the bond should begin when the surety cancels the bond or when the servicer ceases to be licensed, whichever occurs earlier. We recommended that the rules be clarified so that the claimant has a period of time after the bond is cancelled or the license period ends to make a claim, and that the claims period is not long that that it increases uncertainty for the surety, which could impact the availability of the bond.

The bond or letter of credit would have to be in an amount ranging from $50,000 to $200,000, based on the mortgage servicer’s total unpaid principal balance of residential mortgage loans in Oregon. SFAA did not comment on the bond amount specifically, but noted that a higher bond amount would require the bond principal to have greater financial resources based on the surety’s underwriting process.

Members should visit Government Relations / General Info (Members) for more information.


SFAA Objects to Proposed Montana Rules Eliminating Aggregate Liability Provision for Public Adjuster

SFAA Objects to Proposed Montana Rules Eliminating Aggregate Liability Provision for Public Adjusters’ Bond 

SFAA advised against a proposed rule from the Montana Commissioner of Securities and Insurance that would delete a provision limiting the surety’s aggregate liability to the bond amount for the bond required from public adjusters. SFAA noted that the proposed rules could affect the bond’s availability by increasing the surety’s financial exposure. The proposed rules state that the intent of the changes is to remove superfluous language without changing the meaning of the rule. Our comments noted that eliminating the limit on the surety’s aggregate liability could result in a material, unintended change as the statute does not limit the surety’s aggregate liability.

Members should visit Government Relations / General Info (Members) for more information.


Draft Meeting Minutes posted

Writing

Draft Minutes from the following
recent meetings have been posted for Members:

Members should navigate to the Board and Committees section of the website for for additional information
about SFAA Board and Advisory Committees.