Sec. 36a-664. (Formerly Sec. 36-380). Surety bond or insurance policy required. Form of surety bond. Cancellation of bond or insurance policy. Notice. Automatic suspension of license. Notice. Opportun
Sec. 36a-664. (Formerly Sec. 36-380). Surety bond or insurance policy required. Form of surety bond. Cancellation of bond or insurance policy. Notice.
Automatic suspension of license. Notice. Opportunity for hearing. (a)(1) Except as
provided in subdivision (2) of this subsection, no such license, and no renewal thereof,
shall be granted unless the applicant has filed a surety bond with the commissioner
written by a surety authorized to write such bonds in this state, provided any applicant
that files applications for licenses for more than one location shall file a single bond.
For every applicant, the principal amount of the bond shall be the greater of (A) forty
thousand dollars, or (B) twice the amount of the highest total payments received by the
applicant from Connecticut debtors in connection with the applicant's debt adjustment
activity in any month during the preceding twelve months ending July thirty-first of
each year. Each licensee shall submit to the commissioner evidence that the bond complies with the provisions of this subdivision by September first of each year.
(2) If a licensee or applicant for renewal of a license establishes that such licensee
or applicant is unable to comply with the bond required by subdivision (1) of this subsection, it may submit to the commissioner, by July first, a request for an alternative to
such requirement. If the commissioner finds that the financial responsibility, character,
reputation, integrity and general fitness of the applicant so warrant, the commissioner
may permit the applicant or licensee to supplement the maximum surety bond that it
can obtain, provided the principal amount of the surety bond shall be a minimum of
forty thousand dollars, with such other bonds or insurance policies, in such amounts,
for such period and subject to such conditions as the commissioner may approve. Any
such bond or insurance policy shall be written or issued by a surety or insurance company
authorized to write such bonds or sell such insurance in this state.
(3) The form of any surety bond submitted pursuant to this section shall be approved
by the Attorney General. Any surety bond filed under this section shall be conditioned
upon the licensee faithfully performing any and all written agreements with debtors,
truly and faithfully accounting for all funds received by the licensee in the licensee's
capacity as a debt adjuster, and conducting such business consistent with the provisions
of sections 36a-655 to 36a-665, inclusive. Any debtor who may be damaged by failure
to perform any written agreements, or by the wrongful conversion of funds paid to a
licensee, may proceed on any such surety bond against the principal or surety thereon,
or both, to recover damages. The commissioner may proceed on any such surety bond
against the principal or surety thereon, or both, to collect any civil penalty imposed upon
the licensee pursuant to subsection (a) of section 36a-50. The proceeds of any bond or
insurance policy, even if commingled with other assets of the licensee, shall be deemed
by operation of law to be held in trust for the benefit of such claimants against the
licensee in the event of bankruptcy of the licensee and shall be immune from attachment
by creditors and judgment creditors. Any bond or insurance policy required by this
section shall be maintained during the entire period of the license granted to the applicant,
and the aggregate liability under any such bond or insurance policy shall not exceed the
principal amount of the bond or the limit of liability of the insurance policy.
(b) The surety or insurance company shall have the right to cancel any bond or
insurance policy written or issued under subsection (a) of this section at any time by a
written notice to the licensee, stating the date cancellation shall take effect. Such notice
shall be sent by certified mail to the licensee at least thirty days prior to the date of
cancellation. No such bond shall be cancelled unless the surety or insurance company
notifies the commissioner in writing not less than thirty days prior to the effective date
of cancellation. The commissioner shall automatically suspend the license on the date
the cancellation takes effect, unless the bond or insurance policy has been replaced or
renewed. The commissioner shall give the licensee notice of the automatic suspension
pending proceedings for revocation or refusal to renew and an opportunity for a hearing
on such actions in accordance with section 36a-51.
(c) No licensee shall use, attempt to use or make reference to, either directly or
indirectly, any word or phrase which states or implies that the licensee is endorsed,
sponsored, recommended, bonded or insured by the state.
(1967, P.A. 882, S. 17; P.A. 94-122, S. 302, 340; P.A. 02-111, S. 45; P.A. 04-69, S. 25; P.A. 06-35, S. 10.)
History: P.A. 94-122 changed "he" to "the licensee", effective January 1, 1995; Sec. 36-380 transferred to Sec. 36a-664 in 1995; P.A. 02-111 added new Subsec. (a) re surety bond, designated existing provisions as Subsec. (b) and, in said
Subsec., changed "bonded, approved, bonded by the state or approved by the state" to "endorsed, sponsored, recommended
or bonded by the state"; P.A. 04-69 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending
same to add exception for provisions of Subdiv. (2) and reference to "surety" bond, to delete provision re approval of form
by Attorney General, to replace "July thirty-first" with "March thirty-first" and provision re submission of bond or renewal
thereof with provision re submission of evidence that bond complies with subdivision, to delete former requirements for
bond and proceeding thereon and to make technical changes, and by adding Subdiv. (2) re supplemental bond or insurance
policy and Subdiv. (3) re requirements for bond or insurance policy and proceeding thereon, added new Subsec. (b) re
cancellation of bond or insurance policy and automatic suspension of license, redesignated existing Subsec. (b) as Subsec.
(c) and amended same by adding "or insured"; P.A. 06-35 amended Subsec. (a)(1)(B) to substitute July thirty-first for
March thirty-first of each year as date marking end of 12-month period, effective May 8, 2006.