§ 58-89A-50. Surety bond; letter of credit; other deposits. - North Carolina Statutes - USA Laws Searching

Statutes > North Carolina Statutes > Chapter 58 - Insurance. > § 58-89A-50. Surety bond; letter of credit; other deposits.

§ 58-89A-50. Surety bond; letter of credit; other deposits.

§ 58‑89A‑50. Surety bond; letter of credit; other deposits.

(a)        An applicant forlicensure shall file with the Commissioner a surety bond for the benefit of theCommissioner as follows:

(1)        If the applicant wasinitially licensed prior to October 1, 2008, the bond, or other items asprovided for in subsection (f) of this section, shall be in the amount of onehundred thousand dollars ($100,000).

(2)        If the applicant wasnot initially licensed prior to October 1, 2008, the bond, or other items asprovided for in subsection (f) of this section, shall be in an amount equal tofive percent (5%) of the applicant's prior year's total North Carolina wages,benefits, workers compensation premiums, and unemployment compensationcontributions, but not greater than five hundred thousand dollars ($500,000),or such greater amount as the Commissioner may require.

(b)        The surety bondrequired by this section shall be in a form acceptable to the Commissioner,issued by an insurer authorized by the Commissioner to write surety business inthis State, and maintained in force while the license remains in effect or anyobligations or liabilities of the applicant, licensee or PEO previouslylicensed by this State remain outstanding.

(c)        The surety bondrequired by this section may be exchanged or replaced with another surety bondif (i) the surety bond applies to obligations and liabilities that arose duringthe period of the original surety bond, (ii) the surety bond meets therequirements of this section, and (iii) 90 days' advance written notice isprovided to the Commissioner.

(d)        A licensee shallnot require a client company to contribute in any manner to the payment of thesurety bond required by this section.

(e)        Notice ofcancellation or nonrenewal of the surety bond required by this section shall beprovided to the Commissioner in writing at least 45 days before cancellation ornonrenewal.

(e1)      A surety bond may becancelled by the issuer of the bond with respect to future obligations orliabilities upon proper notice pursuant to this section and without regard toapproval or acceptance of the Commissioner.

(f)         In lieu of thesurety bond required by this section, an applicant may submit to theCommissioner an irrevocable letter of credit in a form acceptable to theCommissioner issued by a financial institution, the deposits of which areinsured by the Federal Deposit Insurance Corporation, or may maintain ondeposit with the Commissioner an amount equal to the amount required undersubsection (a) of this section in cash or in value of securities of the kindspecified in G.S. 58‑5‑20.

(g)        This section doesnot apply to persons who are licensed pursuant to the alternative licensingprocedures set forth in G.S. 58‑89A‑76 or to persons who are deminimis registrants pursuant to G.S. 58‑89A‑75.

(h)        The license of anylicensee that fails to provide and maintain a surety bond, letter of credit,cash, or securities pursuant to this section shall be automatically andimmediately suspended, and the licensee shall tender its license to theCommissioner within three days of failure to satisfy this requirement.  (2004‑162, s. 1; 2005‑124,s. 1; 2008‑124, ss. 7.1, 7.2; 2009‑552, s. 1.)