PARRIS N. GLENDENING, Governor                            S.B. 308

12-410.

(a)     With the application for a new or renewal license, the applicant either shall
file a surety bond or bond renewal certificate or shall deposit permissible investments
with the Bank Commissioner as provided in this section.

(b)     (1) A surety bond filed under this section shall run to this State for the
benefit of any person who has a cause of action against the applicant for any liability
incurred on a payment instrument or traveler's check issued or sold by the applicant or by
any agent of the applicant.

(2)     The surety bond shall be:

(i) In the amount required by subsection (d) of this section; and

(ii) Issued by a bonding company or insurance company that is
authorized to do business in this State.

(3)     The surety bond shall provide that if a buyer or holder of a payment
instrument or traveler's check obtains a judgment against the licensee and the judgment
remains unsatisfied for more than 30 days after the licensee and surety are served with
notice of the entry of judgment, an action may be brought against the surety for the
amount of the judgment, but not exceeding the amount of the bond.

(4)     The liability of a surety:

(i) Is not affected by the insolvency or bankruptcy of the licensee or
by any misrepresentation; breach of warranty, failure to pay a premium, or other act or
omission of the licensee; and

(ii) Continues, if the licensee dies, dissolves, or liquidates, as to all
transactions of an agent, until the earlier of 60 days after the death, dissolution, or
liquidation or 60 days after the termination of the bond.

(5)     A licensee or surety may cancel a bond by giving the Bank Commissioner
notice of the cancellation by certified mail, return receipt requested, bearing a postmark
from the United States Postal Service. However, the cancellation is not effective until 30
days after the Bank Commissioner receives the notice.

(c)     (1) Permissible investments deposited under this section shall:

(i) Have a market value equal to the amount required by subsection
(d) of this section; and

(ii) Be held by the Bank Commissioner to secure the same obligations
as are required to be secured by a bond under subsection (b) of this section.

(2)     At any time, a licensee may exchange deposited permissible investments
for other permissible investments that meet the requirements of this subsection.

(3)     The Bank Commissioner may sell or transfer deposited permissible
investments and dispose of their proceeds only on the order of a court of competent
jurisdiction.

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