§ 740-A — Automobile broker business surety bond

§ 740-a. Automobile broker business surety bond. 1. Automobile broker\nbusinesses shall obtain and continue in effect a surety bond in an\namount of one hundred thousand dollars executed by a surety company\nauthorized to transact business in the state by the department of\nfinancial services of the state or its successor. The bonds shall be\napproved as to form by the secretary of state and shall be conditioned\non the automobile broker business' payment of all valid bank drafts,\nincluding checks, drawn for the purchase of motor vehicles and\nsafekeeping of all customer deposits related to the sale of a motor\nvehicle between the time of receipt of such customer deposit and the\ntransfer of good title to the vehicle to the customer.\n 2. Recovery against a bond may be made by a person, including the\nstate, who obtains a judgment against the automobile broker business for\nan act or omission on which the bond is conditioned if the act or\nomission occurred during the term of the bond. The total liability\nimposed on the surety under this section for all breaches of the bond\ncondition is limited to the face amount of the bond. Such liability may\ninclude, but is not limited to, the amount of the valid bank drafts,\nincluding checks, drawn by the automobile broker business for the\npurchase of motor vehicles. In no event shall the surety on a bond be\nliable for total claims in excess of the bond amount, regardless of the\nnumber or nature of claims made against the bond or the number of years\nthe bond remained in force.\n 3. Any surety issuing a bond pursuant to this subdivision shall be\nrequired to provide sixty days' notice to the secretary of state prior\nto the effective date of cancellation of the bond.\n