Lance Surety Bond Associates, Inc.

Under a new assembly bill the security requirement for service contract providers will be appealed. Currently the law requires the provider to post some form of security in an amount equal to $25,000 or 5% of the gross consideration received by the provider for any unexpired service contracts. A surety bond is accepted in lieu for this requirement.

HB 425: Reclamation Bonds

This house bill will authorize the Department of Environment to require a bond to be posted in connection with a permit for the use of any coal-combustion by-product for reclamation of a mining site. Under the terms of this bond the secure compliance with the applicable state and federal law will be enforced. The bond amount will have a capacity of the maximum limit of $7,500 per acre based on the number of affected acres. Under existing law a bond was required in connection with a mining operation permit. This new bond will be required in addition to the existing law’s reclamation bond requirements.

A program will be established through SB 398 to provide scholarships to special needs students to attend qualified public and non-public schools. Scholarship granting organizations would then be required to demonstrate their financial viability if they have been receiving more than $50,000 in donations during the school year. This can either be shown through the submission of financial information demonstrating such viability or they will be allowed to post a surety bond. The surety bond that would need to be posted must be in equal to the aggregate amount of contributions that the school expecting to receive during the school year. A bond will also be required by SB 433 from scholarship organizations as described above, but the program is for low-income students.

Through this bill contaminated industrial sites will now have the use of site specific remediation standards. Financial assurance will be required by the person conduction the remediation project. This will be required in order to insurance the completion of the cleanup project according to the remedial action plan. A surety bond may be posted as a form of financial assurance.

HB 297: Financial Assurance – Oil and Gas Wells

Under this bill the maximum amount of financial assurance for permit tees operation an oil gas or service well in the state will be increased. Surety bonds can be accepted to meet this requirement, and the law caps the assurance for a blanket bond covering multiple wells at 50K. The new bill would increase this cap to 500K.

AB 3438: License Bond – Exchange Facilitators

Under this bill exchange facilitators will be regulated. These are people who facilitate like kind exchanges or property that is pursuant to federal tax law. This new bill would require facilitators to be licensed and to obtain a fidelity bond that would be in the amount no less than $1 million. Another option would be to post cash or a letter of credit in an equal amount.

AB 3408: Professional Employer Organizations

This Assembly Bill would revise the current law for employee leasing companies, including the financial requirements. Under existing law companies need to maintain a minimum net worth of $100,000. Under the new bill to be passed the $100,000 net worth requirement will be substituted for a surety bond in the amount of $75,000. Now instead of meeting the minimum net worth requirement the bill would require the company to maintain a positive working capital. If the company fails to do that then it could post a bond, irrevocable letter of credit or securities with a minimum market value that is equal to the amount required for achieving a positive working capital, plus $100,000.

HB 6307: Third Party Administrators

This will adopt a modified version of the NAIC model for the third-party administrators of insurance benefits. These people will have to be licensed, and those who are administrating governmental or church self insured plans will have to post a surety bond in the amount of $100,000 or 10% of the aggregate amount of self-funded coverage under governmental plans or church plans handled in Connecticut and all additional states which are authorized to conduct business. This bond will have to respond to claims that originated from the Connecticut Insurance Department and any other state insurance regulatory authority in the states licensed to conduct business.

SB 9: Court Bonds – Confiscated Animals

Under current law the owner of a confiscated animal must post a surety bond for the costs of the care of the animal for 30 days. SB 9 will repeal the law requiring the owner to post a surety bond to prevent its disposition by an impound agency. Animals may be confiscated for the owner’s neglect, abuse, cruelty or because the owner illegal possession of a dangerous dog.

HB 2299: Miscellaneous Bond

This will revise the amount of the proof of financial responsibility that private prisons are required to obtain. This proof of financial responsibility may be in the form of an insurance policy or a surety bond. Under current law the bond or policy must be for $10 million. This bill will change the amount that needs to be posted to no less than $10 million.