N.Y. Comp. Codes R. & Regs. tit. 3 § 402.5

Current through Register Vol. 46, No. 50, December 11, 2024

Section 402.5 - Provision for surety bond

(a) Except as provided in section 402.6 of this Part, every licensee shall file with the superintendent a corporate surety bond in the principal amount of $250,000, or such larger or smaller amount as the superintendent may require. If the licensee is notified that a larger bond is required, such larger bond shall be in full force within 30 days. A copy of the larger bond shall be submitted to the superintendent. The corporate surety bond required by the section shall be issued by a bonding company or insurance company authorized to do business in this State. The form of the bond shall be obtained from the Licensed Financial Services Division of the Banking Department.

(b) Such bond shall be in favor of the superintendent. The bond, or deposit agreement entered into pursuant to section 402.7 of this Part, shall contain substantially the following language:

"The proceeds of this [bond/deposit agreement] shall constitute a trust fund in favor of the superintendent to be used exclusively to reimburse payments by debtors that have not been properly distributed to creditors or to reimburse fees determined by the superintendent to be improperly charged or collected and, in the event of the insolvency, liquidation or bankruptcy of such licensee, to pay outstanding banking department examination costs and assessments."

(c) Within 90 days of the effective date of Banking Law, section 580, as amended by chapter 629 of the Laws of 2002, which date is April 7, 2003, each licensee shall comply with the provisions of this section.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 402.5