Mich. Admin. Code R. 451.1225 - Notice of termination of bond
Current through Vol. 22-05, April 1, 2022
Rule 5. If a surety company gives 30 days' notice of termination of a bond, the firm, if continuing in the debt management business, shall furnish a satisfactory new bond before the expiration of the 30 days. Failure to maintain a bond is cause for issuance of a summary suspension order.
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Rule 5. (1) Bond coverage in the penal amount of $5,000.00 for each office shall be filed with an original or a renewal application. An extension of an existing bond shall not be acceptable.
(2) If a surety company gives 30 days' notice of termination of a bond, the firm, if continuing in the debt management business, shall furnish a satisfactory new bond before the expiration of the 30 days. Failure to maintain a bond shall be cause for issuance of a summary suspension order.
(3) In lieu of bond, the bureau may approve for a firm which maintains net worth of at least $10,000.00 for each licensed or exempted office the following:
(a) A deposit of cash in a certificate of deposit or savings account, which may be withdrawn only upon order of the bureau.
(b) A deposit in escrow at a Michigan-based bank or savings and loan association of securities which have sufficient trading volume to assure immediate liquidity, which securities may only be removed from escrow upon order of the bureau and over which the bureau is given a stock power. The bureau shall assess a discount
of 25% of the market value of the securities in determining the appropriate amount of deposit.
(c) The amount of deposit of cash or securities in lieu of bond and the duration of the deposit shall be determined by, but not be limited to, the following:
(i) The financial condition of the applicant.
(ii) The liabilities of the applicant.
(iii) The number of debtors assisted by the applicant.
(iv) The current asset position of the applicant.
(v) The existence of appropriate fidelity bond.
(vi) The number of employees of the firm.
History: 1979 AC.