§ 53-208.8. Surety bond.
§ 53‑208.8. Suretybond.
(a) Each applicationshall be accompanied by a surety bond acceptable to the Commissioner in theamount of one hundred fifty thousand dollars ($150,000). If the applicantproposes to engage in business under this Article at more than one location,through authorized delegates or otherwise, then the amount of the security bondwill be increased by five thousand dollars ($5,000) per location, up to amaximum of two hundred fifty thousand dollars ($250,000). In the case of anapplicant which engages in business under this Article, but has no locations orauthorized delegates in this State, the amount of the security bond may beincreased at the Commissioner's discretion to a maximum of two hundred fiftythousand dollars ($250,000). The surety bond shall be in a form satisfactory tothe Commissioner and shall run to the State for the benefit of any claimantsagainst the licensee to secure the faithful performance of the obligations ofthe licensee with respect to the receipt, handling, transmission, and paymentof money or monetary value in connection with the sale and issuance of paymentinstruments, stored value, or transmission of money. The aggregate liability ofthe surety in no event shall exceed the principal sum of the bond. Claimantsagainst the licensee may themselves bring suit directly on the security bond,or the Commissioner may bring suit on behalf of claimants, either in one actionor in successive actions.
(b) In lieu of a suretybond, the licensee may deposit with the Commissioner, or with any bank in thisState designated by the licensee and approved by the Commissioner, to anaggregate amount, based upon principal amount or market value, whichever islower, of not less than the amount of the surety bond or portion thereof, thefollowing:
(1) Unencumbered cash.
(2) Unencumberedinterest‑bearing bonds.
(3) Unencumbered notes.
(4) Unencumbereddebentures.
(5) Unencumberedobligations of the United States or any agency or instrumentality thereof, orguaranteed by the United States.
(6) Unencumberedobligations of this State or of any political subdivision of the State, orguaranteed by this State.
The securities or cash shallbe deposited as aforesaid and held to secure the same obligations as would thesurety bond, but the depositor shall be entitled to receive all interest anddividends thereon, shall have the right, with the approval of the Commissioner,to substitute other securities for those deposited, and shall be required to doso on written order of the Commissioner made for good cause shown.
(c) The surety bondshall remain in effect until cancellation, which may occur only after 90 days'written notice to the Commissioner. Cancellation shall not affect any liabilityincurred or accrued during that period.
(d) The surety bondshall remain in place for no longer than five years after the licensee ceasesmoney transmission operations in the State. However, notwithstanding thisprovision, the Commissioner may permit the surety bond to be reduced oreliminated prior to that time to the extent that the amount of the licensee'soutstanding payment instruments, stored value obligations, and moneytransmitted in this State is reduced.
(e) The surety bondproceeds and any cash or other collateral posted as security by a licensee shallbe deemed by operation of law to be held in trust for the benefit of thepurchasers and holders of the licensee's outstanding payment instruments,stored value obligations, and money transmissions in the event of thebankruptcy of the licensee. (2001‑443, s. 2.)