§ 28-1-29-6 — Surety bond; requirements; amount; renewal; termination; liability; notices

Indiana § 28-1-29-6

• Jurisdiction: Indiana
• Art. 1: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 29: Debt Management Companies

Text

(a) Each application for a license must be
accompanied by proof that the applicant has executed a surety bond in
accordance with this section.
(b) A surety bond issued under this section must:
(1) be in a form prescribed by the director;
(2) be in effect during the term of the license issued under this
chapter;
(3) subject to subsection (c), remain in effect during the two (2)
years after the license of the licensee is surrendered or terminated;
(4) be payable to the department for the benefit of:
(A) the state; and
(B) individuals who reside in Indiana when they agree to
receive debt management services from the licensee;
(5) be in an amount equal to:
(A) fifty thousand dollars ($50,000), in the case of an initial
surety bond issued under this section; or
(B) the amount prescribed under subsection (d), beginning with
the first renewal of a license under this chapter;
(6) be issued by a bonding, surety, or insurance company
authorized to do business in Indiana and rated at least "A-" by at
least one (1) nationally recognized investment rating service; and
(7) have payment conditioned upon the licensee's or any of the
licensee's employees' or agents' noncompliance with or violation
of this chapter or other applicable federal or state laws or
regulations.
(c) The director may adopt rules or guidance documents with
respect to the requirements for a surety bond as necessary to
accomplish the purposes of this chapter. Upon written request from a
licensee, the director may, at the discretion of the director, waive or
shorten the two (2) year period set forth in subsection (b)(3) during
which a surety bond required by this section must remain in effect after
the licensee's license is surrendered or terminated.
(d) Beginning with the first renewal of a license under this chapter,
each year that a licensee continues to offer debt management services
to individuals in Indiana, the licensee shall file a new or an additional
surety bond in an amount that ensures that the licensee's surety bond
under this section is equal to the greater of the following:
(1) fifty thousand dollars ($50,000); or
(2) the average of the highest daily balance of funds held in trust
for Indiana residents for each month during the licensee's most
recently concluded fiscal year, not to exceed one hundred
thousand dollars ($100,000).
(e) If the principal amount of a surety bond required under this
section is reduced by payment of a claim or judgment, the licensee for
whom the bond is issued shall immediately notify the director of the
reduction and, not later than thirty (30) days after notice by the
director, file a new or an additional surety bond in an amount set by the
director. The amount of the new or additional bond set by the director
must be at least the amount of the bond before payment of the claim or
judgment.
(f) If for any reason a surety terminates a bond issued under this
section, the licensee shall immediately notify the department and file
a new surety bond in an amount as prescribed in subsection (b)(5).
(g) Cancellation of a surety bond issued under this section does not
affect any liability incurred or accrued during the period when the
surety bond was in effect.
(h) The director may obtain satisfaction from a surety bond issued
under this section if the director incurs expenses, issues a final order,
or recovers a final judgment under this chapter.
(i) Notices required under this section must be made in writing and
submitted through the NMLSR or any other electronic registration
system that may be approved by the director.
Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10,
SEC.6. As amended by Acts 1981, P.L.256, SEC.3; P.L.42-1993,
SEC.53; P.L.35-2010, SEC.124; P.L.216-2013, SEC.23; P.L.176-2019,
SEC.57; P.L.129-2020, SEC.10.