Category: Bond Articles

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.

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.

Case Summary Reports have been posted for Members, Subscribers, Claims Advisors and Case Summary Subscribers: 2003-2018 Surety and Fidelity Cases Indexed by State/Topic 2003-2018 Surety Cases Indexed by Topic 2003-2018 Fidelity Cases Indexed by Topic 2003-2018 Bail Cases by State

Members should navigate to the Claims page.
Subscribers should navigate to the Home / Subscriber Home Page.
Claims Advisors should navigate to the Home / Claims Advisors Home Page.
Case Summary Subscribers should navigate to Home / Case Summary Subscriber Home Page.

The Weekly Legislation Report posted has been posted.  SFAA has replaced the monthly overview reports with the weekly legislative update on Surety & Fidelity legislation.  Reports are available for Members on the Weekly Legislative Reports page.

Members may sign up to receive email notifications by subscribing to the “Legislative-Regulatory Alert” group.

SFAA Bill to Address Missouri Case Law on Bonding Public Works Projects Passed out of Committee

Missouri HB 2453 would amend the existing procurement law to clarify that bonds are required when a construction manager agency is used. The bill has passed out of committee in the House.

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

SFAA’s Bill to Address Attorneys’ Fees Awards in Bond Claims Considered but not Enacted

Washington SB 6428/HB 2852 would have placed reasonable limits on the award of attorney fees’ against sureties. The bill provided that the rights granted under current procurement law would have been the exclusive remedy for recovering attorneys’ fee for all disputes, including but not limited to coverage disputes involving a performance or payment bond required under the Little Miller Act. The legislation stalled in the House and died at the end of the session since bills do not carry over to 2019 in Washington.

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

SFAA’s Bill in Indiana to Require Bonding in P3s Goes to Study

Indiana HB 1301 would direct the Legislative Council to form an interim study committee to examine requiring performance and payment bonds for future public private partnership (P3) projects for the three P3 laws that SFAA sought to amend. As introduced, HB 1301 contained the amendments that SFAA drafted to require 100% bonds in all three P3 laws. The bill was amended twice to reduce the bond requirements from 100% to 50% and then down to 25% before it was amended again to send the issue to another study committee. HB 1301 has been sent to the Governor. There also are study provisions on bonding for any kind of P3 project in HB 1374 that the Governor has signed. HB 1374 also revises the existing law for the Indiana Finance Authority.

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

SFAA Promotes the Value of License Bonds as Federal and State Governments Explore Occupational Licensing Reform

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

Meeting Materials for upcoming meetings have been posted for Members:

Upcoming:

• Government Affairs Advisory Committee (March 27, 2018)

Past:

• Diversity & Human Resources Advisory Committee (March 8, 2018)
• Contract Bonds Advisory Committee (January 29, 2018)
• Fidelity Claims Advisory Committee (January 24, 2018)
• Surety Claims Advisory Committee / Corporate Counsel Advisory Committee (January 24, 2018)
• Communications Advisory Committee (January 11, 2018)
• Board of Directors (December 7, 2017)
• Commercial Surety Advisory Committee (December 6, 2017)
• International Advisory Committee (December 6, 2017)
• Actuarial Advisory Committee (November 8, 2017)
• eBusiness Advisory Committee (October 4, 2017)
• Annual Meeting General Session (May 11, 2017)
• Congressional Action Day (May 10, 2017)
• Fidelity Advisory Committee (May 10, 2017)
• Young Professionals Group (May 9, 2017)
• Joint Fidelity Advisory Committee / Fidelity Claims Advisory Committee (November 9, 2016)
• Statistical Advisory Committee (September 21, 2016)

Members may register online for upcoming meetings or get more meeting details  at http://www.surety.org/events/event_list.asp.