§ 19-14.8-13 - Bond required.
SECTION 19-14.8-13
§ 19-14.8-13 Bond required. – (a) Except as otherwise provided in § 19-14.8-14, a provider that isrequired to be registered under this chapter shall file a surety bond with thedirector, which must:
(1) Be in effect during the period of registration and fortwo (2) years after the provider ceases providing debt-management services toindividuals in this state; and
(2) Run to this state for the benefit of this state and ofindividuals who reside in this state when they agree to receive debt-managementservices from the provider, as their interests may appear.
(b) Subject to adjustment of the dollar amount pursuant tosubsection 19-14.8-32(f), a surety bond filed pursuant to subsection (a) must:
(1) Be in the amount of fifty thousand dollars ($50,000) orother larger or smaller amount that the director determines is warranted by thefinancial condition and business experience of the provider, the history of theprovider in performing debt-management services, the risk to individuals, andany other factor the director considers appropriate;
(2) Be issued by a bonding, surety, or insurance companyauthorized to do business in this state and rated at least "A" by a nationallyrecognized rating organization; and
(3) Have payment conditioned upon noncompliance of theprovider or its agent with this chapter.
(c) If the principal amount of a surety bond is reduced bypayment of a claim or a judgment, the provider shall immediately notify thedirector and, within thirty (30) days after notice by the director, file a newor additional surety bond in an amount set by the director. The amount of thenew or additional bond must be at least the amount of the bond immediatelybefore payment of the claim or judgment. If for any reason a surety terminatesa bond, the provider shall immediately file a new surety bond in the amount offifty thousand dollars ($50,000) or other amount determined pursuant tosubsection (b).
(d) The director or an individual may obtain satisfaction outof the surety bond procured pursuant to this section if:
(1) The director assesses expenses under subdivision19-14.8-32(b)(1), issues a final order under subdivision 19-14.8-33(a)(2), orrecovers a final judgment under subdivision 19-14.8-33(a)(4) or (5) or (d); or
(2) An individual recovers a final judgment pursuant tosubsection 19-14.8-5(a), (b), or (c)(1), (2), or (4).
(e) If claims against a surety bond exceed or are reasonablyexpected to exceed the amount of the bond, the director, on the initiative ofthe director or on petition of the surety, shall, unless the proceeds areadequate to pay all costs, judgments, and claims, distribute the proceeds inthe following order:
(1) To satisfaction of a final order or judgment undersubsection 19-14.8-33(a)(2), (4), or (5) or (d);
(2) To final judgments recovered by individuals pursuant tosubsection 19-14.8-35(a), (b), or (c)(1), (2) or (4), pro rata;
(3) To claims of individuals established to the satisfactionof the director, pro rata; and
(4) If a final order or judgment is issued under subsection19-14.8-33(a), to the expenses charged pursuant to subdivision 19-14.8-32(b)(1).