20 CSR 1100-2.030 - Surety Bond Requirement
PURPOSE: This rule establishes the minimum surety bond coverage a credit union must carry for protection of its assets (see section 370.235, RSMo, for statutory provisions).
(1) All credit unions are required to carry a
surety blanket bond with the types and amounts of coverage required to qualify
for and maintain, if required, federal share insurance as stated in National
Credit Union Association (NCUA) Rules and Regulations, Part 713, and in
addition must provide for faithful-performance-of-duty coverage for any officer
or employee.
(2) The board of
directors of each credit union shall, at least annually, carefully review the
bond coverage in force to determine its adequacy in relation to risk exposure
and to minimum regulatory requirements and shall document this review in the
board of directors' minutes.
(3)
All credit unions must use a basic bond form that has been approved by the NCUA
board unless prior written approval has been acquired from the
director.
(4) All credit unions
should maintain increased coverage above the minimum required in section (1),
equal to the greater of either of the following amounts within thirty (30) days
of discovery of the need for such increase:
(A) The amount of daily cash plus anticipated
daily money receipts on any of the credit union's premises; or
(B) The total amount of the credit union's
money in transit in any one (1) shipment.
(C) Increased coverage is not required when
the credit union temporarily increased its cash fund because of unusual events
which cannot reasonably be expected to recur.
(5) Any aggregate limit of liability provided
for in a surety blanket bond policy must be at least twice the single loss of
liability. This requirement does not apply to optional insurance
coverage.
(6) The maximum amount of
deductible may not exceed the limit stated in NCUA Rules and Regulations, Part
713.
(7) For purposes of this
regulation, the term surety bond is synonymous with the term fidelity
bond.
Notes
*Original authority: 370.100, RSMo 1939, amended 1945, 1945, 1949, 1959, 1967, 1972.
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