§ 5-19-213 — Bond required

(a) Except as otherwise provided in section 5-19-214, a provider that is required to be registered under this part 2 shall file a surety
bond with the administrator, which shall:

(1) Be in effect during the period of registration and for two years after the
provider ceases providing debt-management services to individuals in this state;
and

(2) Run to this state for the benefit of this state and of individuals who reside
in this state when they agree to receive debt-management services from the
provider, as their interests may appear.

(b) A surety bond filed pursuant to subsection (a) of this section shall:

(1) Be in the amount of fifty thousand dollars or other larger or smaller
amount that the administrator determines is warranted by the financial condition
and business experience of the provider, the history of the provider in performing
debt-management services, the risk to individuals, and any other factor the
administrator considers appropriate;

(2) Be issued by a bonding, surety, or insurance company authorized to do
business in this state and rated at least A by a nationally recognized rating
organization; and

(3) Have payment conditioned upon noncompliance of the provider or its
agent with this part 2.

(c) If the principal amount of a surety bond is reduced by payment of a claim
or a judgment, the provider and the surety shall notify the administrator
immediately and, within thirty days after notice by the administrator, the provider
shall file a new or additional surety bond in an amount set by the administrator. The
amount of the new or additional bond shall be at least the amount of the bond
immediately before payment of the claim or judgment. If for any reason a surety
terminates a bond, the surety shall provide written notice of the termination to the
administrator immediately, and the provider shall immediately file a new surety
bond in the amount of fifty thousand dollars or other amount determined pursuant
to subsection (b) of this section.

(d) The administrator or an individual may obtain satisfaction out of the
surety bond procured pursuant to this section if:

(1) The administrator assesses expenses under section 5-19-232 (b)(1), issues
a final order under section 5-19-233 (a)(2), or recovers a final judgment under
section 5-19-233 (a)(4), (a)(5), or (d); or

(2) An individual recovers a final judgment pursuant to section 5-19-235 (a),
(b), (c)(1), (c)(2), or (c)(4).

(e) If claims against a surety bond exceed or are reasonably expected to
exceed the amount of the bond, the administrator, on the initiative of the
administrator or on petition of the surety, shall, unless the proceeds are adequate
to pay all costs, judgments, and claims, distribute the proceeds in the following
order:

(1) To satisfaction of a final order or judgment under section 5-19-233 (a)(2),
(a)(4), (a)(5), or (d);

(2) To final judgments recovered by individuals pursuant to section 5-19-235
(a), (b), (c)(1), (c)(2), or (c)(4), pro rata;

(3) To claims of individuals established to the satisfaction of the
administrator, pro rata; and

(4) If a final order or judgment is issued under section 5-19-233 (a), to the
expenses charged pursuant to section 5-19-232 (b)(1).

Legislative History

Source: L. 2017: Entire article added with relocations, (HB 17-1238), ch. 260, p. 1147, � 4, effective August 9.