§ 5-61-3.1 — § 5-61-3.1. Security.

§ 5-61-3.1. Security.

(a) Each telephonic seller, pursuant to the provisions of this chapter, shall deliver and file with the consumer protection unit of the department before a confirmation of registration shall be issued or re-issued:

(1) A surety bond, written by a company recognized and approved by the commissioner of insurance within the department of business regulation and approved by that department with respect to its form, manner of execution, and sufficiency in due form to the state of Rhode Island; or

(2) An irrevocable letter of credit issued for the benefit of the telephonic seller by a bank whose deposits are insured by an agency of the federal government; or

(3) A certificate of deposit in a financial institution insured by an agency of the federal government that may be withdrawn only on the order of the department, except that the interest may accrue to the telephonic seller.

(b) The amount of bond, letter of credit, or certificate of deposit must be a minimum of thirty thousand dollars ($30,000). The department may, at its discretion, establish a bond of greater amount to ensure the general welfare of the public.

(c) The security set forth in subsection (a) of this section shall be limited to indemnify the purchaser only for actual damages. This security shall neither limit nor impair any right of recovery otherwise available pursuant to law, nor shall the amount of security be relevant in determining the amount of damage or other relief to which any purchaser shall be entitled. The security shall be accessible only after all other legal remedies have been exhausted. In the event the security is exhausted, the telephonic seller shall immediately notify the department, which shall cause any public notice that it deems appropriate to be given immediately.

Legislative History

P.L. 1999, ch. 456, § 2.