PRIA, Government Policy, Made Personal

Summary

A company must file its articles of incorporation and a sworn statement of assets and debts signed by its president and secretary before it can act as a surety. The Secretary of the Treasury can approve the company to write surety bonds if the company’s charter allows the work, it has at least $250,000 in paid-up capital (cash or equivalent), and it can perform its contracts. Once approved, the company must send a sworn financial statement every January, April, July, and October. The Secretary can pull approval if the company becomes insolvent or breaks the rules, can check its finances anytime, and can ask for extra security if needed. A company that fails to pay a final judgment on a bond and has no appeal or stay within 30 days cannot issue more bonds.

Title 31, §9305

Money and Finance, Source: USLM XML via OLRC

(a)Before becoming a surety under section 9304 of this title, a surety corporation must file with the Secretary of the Treasury—

(1)a copy of the articles of incorporation of the corporation; and

(2)a statement of the assets and liabilities of the corporation signed and sworn to by the president and secretary of the corporation.

(b)The Secretary may authorize in writing a surety corporation to provide surety bonds under section 9304 of this title if the Secretary decides that—

(1)the articles of incorporation of the corporation authorize the corporation to do business described in section 9304(a)(2) of this title;

(2)the corporation has paid-up capital of at least $250,000 in cash or its equivalent; and

(3)the corporation is able to carry out its contracts.

(c)A surety corporation authorized under subsection (b) of this section to provide surety bonds shall file with the Secretary each January, April, July, and October a statement of the assets and liabilities of the corporation signed and sworn to by the president and secretary of the corporation.

(d)The Secretary—

(1)shall revoke the authority of a surety corporation to do new business if the Secretary decides the corporation is insolvent or is in violation of this section or section 9304 or 9306 of this title;

(2)may investigate the solvency of a surety corporation at any time; and

(3)may require additional security from the person required to provide a surety bond if the Secretary decides that a surety corporation no longer is sufficient security.

(e)A surety corporation providing a surety bond under section 9304 of this title may not provide any additional bond under that section if—

(1)the corporation does not pay a final judgment or order against it on the bond; and

(2)no appeal or stay of the judgment or order is pending 30 days after the judgment or order is entered.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 9305(a), (b)6:8. 9305(c), (d)6:9. 9305(e)6:11. In subsection (a), before clause (1), the words “Before becoming a surety under section 9304 of this title, a surety corporation must file” are substituted for “Every company, before transacting any business under sections 6 to 13 of this title, shall deposit” for consistency and as being more precise. In clause (1), the words “charter or” are omitted as being included in “articles of incorporation”. Subsection (b) is substituted for 6:8(2d sentence) for clarity and consistency and because of the restatement. In subsection (c), the words “A surety corporation authorized under subsection (b) of this section to provide surety bonds” are substituted for “Every such company” for clarity. The words “as is required by section 8 of this title” are omitted as unnecessary because of the restatement. In subsection (d)(1), the word “shall” is substituted for “shall have the power, and it shall be his duty, to” to eliminate unnecessary words. The words “under sections 6 to 13 of this title” are omitted as unnecessary because of the restatement. The words “conducting its business” are omitted as surplus. In clause (3), the words “that . . . be given at any time” are omitted as surplus. The words “from the person required to provide a surety bond” are substituted for “by any principal” for clarity. Subsection (e) is substituted for 6:11 to eliminate unnecessary words, for clarity and consistency, and because of the restatement.

§9305 Authority and Revocation of Authority of Surety Corporations

Summary

Title 31, §9305

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata