SFAA Addresses Changes to Georgia Bond Requirements for Livestock Sales
SFAA Addresses Changes to Georgia Bond Requirements for Livestock Sales SFAA submitted comments to the Georgia Department of Agriculture (Department) to address proposed regulations that implement a new law that permits livestock dealers and auction operators to obtain a letter of credit, certificate of deposit, or “other written instrument” in lieu of the bond.SFAA promoted the value of bonds in comparison to other forms of security based on the surety?s prequalification of the bond principal and the financial protection offered in the event of a default.The proposed rules also implement a change in the law that deleted the specified bond amounts for a livestock auction operator and for dealers purchasing livestock at an auction.Instead, the amount of the bond or other security will be determined through a memorandum of agreement with the Department, which must be sufficient to secure the performance of the dealer or the operator’s obligations.To ensure that the amount of financial protection is the same, the amount required should be the same regardless of the form of security that is furnished.
SFAA Comments on Arkansas Pharmacy Benefit Managers Regulations
SFAA submitted comments to the Arkansas Insurance Department (Department) to address proposed regulations that would require pharmacy benefit managers (PBM) to post a $1 million license bond.The proposed rules would permit direct actions on the bond.If the bond amount would cause the PBM significant financial hardship, the Insurance Commissioner could reduce the amount required.We explained the surety?s underwriting process and noted that the high bond amount could reduce the bond?s availability.Similarly, we explained that the proposed regulations contain a broad obligation in the bond?s conditions with regard to complying with any statute.We recommended that the scope of the bond?s conditions be limited to compliance with the applicable laws and regulations for PBMs.SFAA offered to work with the Department on these issues to improve the bond?s availability.The proposed rules also provide that a PBM that furnishes a $1 million bond under the PBM regulation need not furnish a $25,000 bond under the TPA regulation.
SFAA Addresses Coverage for Virtual Currency in Money Transmitter License Bond Rules
SFAA submitted comments to the Washington Department of Financial Institutions to address proposed rules for money transmitters that expanded the meaning of money transmission to include the transmission of virtual currency. The bond?s existing condition requires the surety to secure the licensee?s compliance with this law. SFAA explained the risks in underwriting virtual currency transmissions due to the volatile fluctuations in the value of the currency. Virtual currency is subject to minimal regulation, is vulnerable to cyberattacks, and the accounts are not insured by the Federal Deposit Insurance Corporation. Underwriting these risks could increase the surety?s exposure by amounts that are difficult to quantify or identify so that the surety bond?s coverage should not be extended to cover them since it could negatively affect the bond?s availability.
The Special Edition of the 2018 Annual Meeting SFAA Newsletter has been posted. Read about updates from the Board of Directors meeting, Committee meeting updates, the Annual Meeting General Session and Congressional Action Day.
The 2018 May/June Edition of the SFAA Newsletter has been posted. Beginning this year, each Newsletter will be available to the public. In addition to our regular Association news, we will be providing original content for our members and supporters to share. In this issue, we have an in depth article on Occupational Licensing.