After almost two weeks as your newly elected President of NASBP, I’ve had a chance to reflect upon our recent meeting on Marco Island, Florida. Past President Matt Cashion and Program Chair, Spence Miller, provided us with an outstanding meeting.

I didn’t realize the parallels between the surety industry and the motorcycle industry, but keynote speaker, Richard Teerlink, demonstrated to us that leadership, a quality product, and customer satisfaction are all critical to success regardless of your industry. I’m not sure that we can create an “emotional lifestyle experience” with our customers as they do at Harley Davidson, but we need to make sure that all stakeholders are treated equitably. I’m also looking for the first volunteers to show off their NASBP tattoo that demonstrates their commitment to our association and industry.

As tradition dictates, my first Pipeline article will be a recap of my comments when I officially accepted the presidency at Marco Island.

How the times have changed for our industry since the golden days of the 1990s! Over the past five years, we’ve incurred over eight billion dollars in claims. We’ve watched our losses spike while contract surety premiums have only inched their way upward. We’ve endured the world-changing impact of terrorism and economic trends that have made risk blatantly real and danger closer than we ever imagined. As a result, individuals and institutions have become more cautious in their decisions: more safety conscious, more risk-averse, more in need of assurance.

These are times when if surety bond producers did not already exist, we would need to be invented. There has, in fact, never been a better time for the services our profession provides.

Challenging times are moments of opportunity to be seized. The competitor within each of you knows that. Conditions today favor the very purpose that surety bond producers serve: We are the link of credibility between our clients and our surety partners.

The strength of that link hinges upon our reputation, on the respect that we have earned, and on the relationships we build and bring into partnerships.

Reputation, respect and relationships require maintenance – some polishing, some repair, sometimes restructuring.

In recent years, there have been numerous attacks against our industry because of the perceived low value of our product and the perception of our claims-handling as non-responsive. Eight billion dollars in claims in the past five years makes a strong argument for the value of our product and our proactive claims process.

If our clients and stakeholders don’t understand the results we have achieved, and if they don’t understand our claims process, whose problem is that? It is not a claims problem. It is not an underwriting problem.  It is not a producer problem. Being undervalued and misunderstood is a problem for our industry as a whole. And it affects all of us.

Frankly, the criticism our industry has received is an invitation to set the record straight. Misunderstanding is an opening for better communication. We have a strong and important message to share, and the invitation to tell it is clear. There is no better time to reinforce the value of our product and prove the effectiveness of our claims handling.

We will soon have a new tool for telling our story and educating the users of our product about the claims process. The Associated General Contractors of America recently approved an educational document that was developed in cooperation with NASBP and SAA. I urge NASBP as a whole, and each of you as individual members, to promote the use of the new materials for managing the expectations of those we serve and for elevating the value of what we provide.

As you renew your professional vows in signing the Code of Professional Standards, don’t just give away your autograph. Think what it means to be a “signature member” of this leading professional group that is respected for practicing the highest standards.

Together, we will turn the challenges we face today into a positive future. But, it will not happen here at the conference on Marco Island. It will not happen at the NASBP or SAA headquarters in Washington, DC. It will happen in places with names as familiar to you as your hometown: Missoula, Montana; Metaire, Louisiana; Rockville, Maryland; Austin, Texas; and in every town and city across the country wherever someone in this room or organization proves the value of his or her services to a client.

Thanks to the vision of past presidents David Skillings and Dennis Flatness, we now have long-needed public relations efforts and communications tools in place for telling our story and making clear the benefits provided by surety bond producers. I urge you to use the NASBP key messages and marketing materials more often in your client communications. They state our case clearly and in terms of direct benefits to our clients.

I urge you to use the SIO materials to help you educate audiences ranging from private owners and developers to bankers and attorneys about contract surety bonds. The SIO tools are impressive and influential and sure to make your next presentation a success.

But ultimately, the impression that is remembered and the reputation that is earned, or tarnished, comes from the individual client’s success or failure in dealing with an individual surety bond producer. This is a one-on-one challenge in which we either earn a place at the client-partners’ table as a valued and trusted advisor, or we are regarded as a replaceable commodity.

One of the best ways to enhance reputation, respect, and relationships is through professional development and continuing education. At this annual conference, you have no doubt noticed people with special NASBP nametags indicating they are instructors in our professional development and continuing education programs. Treat these people with respect. They are dedicated to providing the highest quality educational programs available to our industry. Through them, we gain expertise, learn about innovations, and polish our professionalism. The knowledge you’ll gain from them benefits you, your company, and your clients.

As members of the National Association of Surety Bond Producers, you have incomparable opportunities to rise above your competitors. NASBP provides expert and comprehensive training for surety professionals. Our William J. Angell Surety Schools now offer three levels of study, from novice to new-in-the-field to advanced courses for industry leaders. There is a direct line between learning and earning respect. The smarter we become as an Association and as individuals, the more valued we become to our clients and surety partners.

The consolidation of our industry requires that we provide the leadership development and continuity planning to assure the future success of our members, our association and our industry. Look for future developments this year in the areas of agency continuity planning and leadership development training.

Surround yourself with knowledgeable people and the wisdom usually rubs off. At least that is what I am hoping for during my year as your president. So far, most of what I have learned has come from those who went before me: past presidents of NASBP as recent as Matt Cashion in 2003 and as far back as 1986, when Bob Dee stood before you and spoke of his vision for this group.

I look forward to working with and learning from the incoming executive committee, board members, RVPs and committee chairs. I also look forward to working with the talented staff at our Washington, DC office. I offer special congratulations to Ed Heine on becoming First Vice President, Steve Cory on becoming Second Vice President, and Sarah Finn on being the first woman to become Third Vice President of the National Association of Surety Bond Producers.

Thank you for this honor. Judy and I hope to see each and every one of you at your regional meetings before we see you next April in San Diego. Stay involved. Stay informed. And focus on reputation, respect and relationships. That’s where my focus will be.

Craig E. Hansen is Senior Vice President responsible for the bond department of Holmes Murphy & Associates, Inc., in West Des Moines, IA. He can be reached at chansen@holmesmurphy.com.

PennDOT’s Electronic Contract Administration System
to Replace Paper on July 1, 2004

Business Partner Registrations Now Being Accepted

The Pennsylvania Department of Transportation (PennDOT) has announced that July 1 will mark the end of paper bond submissions and subsequently will require all bonds to be executed and submitted through their Engineering and Construction Management System (ECMS).  The system may be accessed at: http://www.dot2.state.pa.us/ .

Attached is a copy of the business partner agreement, which must be signed and submitted before registration can proceed.  The agreement states that the business partner will use reasonable care to prevent the introduction of viruses to ECMS by the business partner system.  In addition to the agreement, an on-line registration process must also be completed using the website address above before the registration process can be completed. The business partner is responsible for the security of the user names and passwords.  Each business partner, including each writing company, must execute the agreement as a condition of participation.

For more information or for assistance with the registration process, contact PennDOT’s Help Desk at 717-783-7711. 

Note:  For background information on ECMS and PennDOT’s plan to eliminate paper bond submissions, see the article contained in the November, 2003 issue of Pipeline.

The National Association of Surety Bond Producers (NASBP) and The Surety Association of America (SAA) announced a joint effort with DHL Express to offer a unique member benefit using the DHL eCourier Electronic Document Delivery Program.

The DHL eCourier program facilitates the sending and receiving of documents that contain sensitive data – such as personally identifiable information, financial statements, bond requests, indemnity agreements, etc. – securely and privately in a matter of minutes.  In addition, as a sender, you will be able to track their receipt, and the recipient will be able to store the documents contained in the DHL eCourier message safely and conveniently.

The DHL eCourier program is being offered to the members NASBP at a special rate – only $0.25 per transaction.

For more information, please visit DHL at https://ecourier.airborne.com/login-surety.html.

– Download a copy the the eCourier QuickStart Guide

NASBP Offers Expo at Annual Meeting

NASBP launched its 5th Expo in as many years, offering Annual Meeting attendees a one-of-a-kind venue to explore and learn about the latest industry products and services. Attendees had an opportunity to test drive, discuss and purchase products and services, network with their peers and find solutions to their issues. The Expo Hall also featured an Internet Cafe, where attendees were invited to grab a beverage and a snack while checking their email messages.

2004 Annual Meeting Exhibitors

William Maroney, chair of NASBP’s political action committee, is pleased to announce that SuretyPAC recently contributed to the campaigns of 23 candidates running for Congressional seats in the 2004 elections. SuretyPAC is preparing for a second round of distributions to additional candidates before the election in November.

In conjunction with NASBP’s campaign to oppose the waiver of Miller Act bonds for certain 8(a) contractors, found in HR 2802 at Section 208(a)(3) (see related story), SuretyPAC primarily targeted House Members who serve on the Small Business Committee and those who have personal relationships with NASBP members.

Since the start of the two-year election cycle on January 1, 2003, SuretyPAC has raised $20,876.  After the first distribution of $13,000 to candidates, the cash-on-hand amounts to $25,526.

Maroney urges NASBP members and others who have not yet contributed to SuretyPAC to seriously consider doing so.  Additional contributions received during the remainder of the election cycle will enable SuretyPAC to contribute to even more worthy candidates in the second distribution.  According to Maroney, “SuretyPAC is a great deal because contributors may designate the candidates they want to receive SuretyPAC funds. Many of us contribute to candidates’ elections anyway, and the SuretyPAC contributions give even more bang to our bucks.”

If you have any questions regarding SuretyPAC or are interested in making a contribution before the 2004 general election, please contact Colin Chiles, Government Relations Coordinator at (202) 686-3700 x1305 or cchiles@nasbp.org.

The following are the candidates running for Congress to whom SuretyPAC has contributed thus far in the 2004 election cycle:

Incumbent Senators

Sen. Kit Bond (R-MO)
Sen. Michael Crapo (R-ID)

Incumbent Members of the House of Representatives

Rep. Todd Akin (R-MO)
Rep. Bob Beauprez (R-CO)
Rep. Roy Blunt (R-MO)
Rep. Ed Case (D-HI)
Rep Steve Chabot (R-OH)
Rep. Diana DeGette (D-CO)
Rep. Ralph Hall (R-TX)
Rep. Melissa Hart (R-PA)
Rep. Steny Hoyer (D-MD)
Rep. Carolyn Maloney (D-NY)
Rep. Robert Matsui (D-CA)
Rep. Gary Miller (R-CA)
Rep. Anne Northup (R-KY)
Rep. Mike Oxley (R-OH)
Rep. Steve Pearce (R-NM)
Rep. Chip Pickering (R-MS)
Rep. Earl Pomeroy (D-ND)
Rep. Tom Reynolds (R-NY)
Rep. Mike Ross (D-AR)
Rep. Jerry Weller (R-IL)
Rep. Heather Wilson (R-NM)

Five local surety associations received the 2003 Gold Award for Excellence in Surety Bond Promotion for conducting at least 10 promotional activities. Honorees include:

This year’s Tiger Trust inductees include:

James A. Schaller (Aon Risk Services – Irvine, CA) who persuaded a Las Vegas casino project owner who was considering gambling with a default insurance product to require surety bonds instead.

This newly-revised publication includes:

• Construction business failure rates;
• SAA’s top five contractor-failure factors;
• Data on failed contractors by age of business;
• Events that lead to contractor failure;
• Warning signs of a contractor in trouble; and
• Qualities of a solid contractor.

For free copies of this publication, contact SIO at (202) 686-7463; sio@sio.org; or order online at www.sio.org/fstore.html.

Senate-House Differences Make It Difficult for Some Small Contractors to Bid on Federal Contracts

As previously reported in Pipeline, the Small Business Administration (SBA) and its programs were due to expire in September 2003. Because of the vast differences between the Senate and House versions of legislation to reauthorize the Small Business Act, consensus has not been achieved in passing final legislation.

To keep the SBA and its programs alive, Congress has passed a series of continuing resolutions to temporarily extend the SBA’s operations. The last continuing resolution (CR), HR 4478, passed the House but is held up in the Senate. The Senate will only approve the CR if the House agrees to increase access to the SBA and its programs by women-owned small businesses.

When Congress approved the language establishing SBA’s Part B or Preferred Surety Bond Program in November 1988, the program was established as a pilot program and carried its own sunset date, September 30, 2003, by which it was to expire unless expressly approved by Congress. Because the Part A program was created as a permanent program in 1971, its operations are not affected by the hold up of the CR.

The Part A program also differs from Part B in that it requires the SBA to approve each bond guarantee individually based on information submitted by the surety bond producer and the surety company. SBA’s guarantee percentage is 90% if the contract is $100,000 or less or if it is awarded to a socially and economically disadvantaged or HUBZone firm. Otherwise, SBA’s guarantee is 80%. The Part B program provides a 70% guarantee to participating sureties that are selected ahead of time and given the authority to issue, monitor, and service bonds without SBA’s prior approval. Because the SBA must approve each bond guarantee individually, the Part A program involves more paperwork, more thorough documentation, more personnel involvement, and more time than the Part B program requires of the SBA.

Without passage of the extension via the continuing resolution, the Part B program is, in essence, shut down. This means that surety companies may not issue any bid or final bonds under the Part B program. For the time being, surety companies and producers who have contractors applying under the Part B program must reapply under the Part A program and meet its requirements for additional paperwork. Additionally, the four area SBA offices in Philadelphia, Atlanta, Denver, and Seattle must approve all Part A bond guarantees, and they don’t have necessary personnel resources to accommodate this unexpected increase in Part A applications.

The end result of this standoff is that it may prevent many small contractors, who ordinarily get federal contracts, from bidding on subsequent contracts because of the time it takes to be approved through the Part A program. SBA area office personnel as well as surety producers and companies will be challenged to respond quickly enough to meet these small contractors’ needs.

It should be noted that this hold-up in approving another continuing resolution is not related to NASBP’s position on the House version, HR 2802, of the reauthorization legislation.

NASBP continues to oppose a provision in HR 2802 that waives all or a part of Miller Act bonds for certain 8(a) contractors under certain conditions and urge Pipeline readers to oppose this provision, as well. The following resources are available to help your effort to communicate with House Members: 3/29/04 Matt Cashion Letter to the Full House,Detailed Talking Points, 75% Bond Language

Political analyst, commentator, and journalist, Fred Barnes will travel to all three NASBP Regional Meetings this year. With over 20 years of reporting on Washington politics, his analyses and predictions are among the most on-target of anyone covering Washington. As executive editor of The Weekly Standard and co-host of FOX News’ The Beltway Boys, Barnes epitomizes the hard-hitting journalist, cutting through the spin and uncovering the truth. He also moderates issues in the News for Voice of America, and looks behind the trends and impulses of the media on his weekly radio show What’s the Story? As a regular panelist on The McLaughlin Group, Barnes was witty and insightful, making him the champion of a weekly political battlefield — and a forerunner of television news. With the presidential election fast approaching, Barnes is sure to bring an insiders view on the “New Political Era in Washington.”

Mark Your Calendars NOW for NASBP’s 2004 Regional Meetings!

REGIONS 8, 9, 10, 11
Hyatt Regency Newport
Newport, RI
(401) 851-1234
July 22 – 25, 2004

• Registration
• Schedule of Events
• Golf Tournament
• Meeting Information

REGIONS 1, 2, 3*
Hyatt Regency Lake Las Vegas Resort
Henderson, NV
(702) 567-1234
September 30 – October 3, 2004

REGIONS 4, 5, 6, 7*
Royal Sonesta Hotel New Orleans
New Orleans, LA
(504) 586-0300
October 14-17, 2004

*Registration and Meeting Information coming soon.

This week I received a copy of ENR’s Surety Supplement, ENR June 7, 2004 (along with 20 other copies for family and friends), and I was pleased to see a major emphasis placed on the surety claims process including “How to Navigate a Claim – Advice to Owners.” This along with the recent article in Constructor magazine, May 2004, “An Overview of the Contract Surety Bond Claims Process,” provides us with valuable material to disseminate to contractors, subcontractors, owners, and other stakeholders in the surety product.

I recently participated in the Fidelity and Surety Law Committee’s 2004 Back to Basics Program on Contract Surety Claims Handling co-sponsored by AGC and NASBP. This was the second of three seminars taking place around the country, which provided us another opportunity to present a basic overview of important issues in contract surety claims handling to claim representatives and attorneys specializing in surety claims.

I have received numerous e-mails from members and affiliates across the country congratulating me on becoming NASBP’s president. I would like to share one response from a very well respected surety claims executive, “I enjoyed your recent article in the Pipeline. Hopefully, this new AGC document will help with the perceptions, but it is still up to us in claims on a daily basis to do our best to fairly and responsibly handle the situations that arise and explain to the various parties involved why we are doing what we are doing in a particular case.” While I agree, I believe that a major reason for the dissatisfaction in the claims process is a lack of understanding of our product and the process of claims handling. Both the ENR Supplement and the AGC Claims document clearly outline the claims process and provides reasonable expectations for all parties in contract disputes.

NASBP believes that a surety’s approach to claims handling and its practices during a claim situation are as important to the surety process as its underwriting practices. NASBP also believes that professional surety bond producers play an essential role in educating contractors and other interested stakeholders about the claims process by maintaining open, reliable, and constant communication with them to help avoid a claims situation. Every party involved has a shared interest in a fair and timely resolution of claims.

I encourage everyone to read and use the information contained in the new AGC document. It is available on SIO’s website, www.sio.org, by clicking on the following link: http://www.sio.org/new.html.

Craig E. Hansen is Senior Vice President responsible for the bond department of Holmes Murphy & Associates, Inc., in West Des Moines, IA. He can be reached at chansen@holmesmurphy.com.  

There is no handbook that a surety producer can open up to find out what his or her responsibilities are to the surety company or its contractor customer during the process of getting bonds issued for construction projects. Often times, the assumptions of the surety and the contractor about what the producer is expected to do are determined by the conversations between and among the parties before, during, and after the bidding process. A recent Texas case illustrates the dangers of what can happen when there is a breakdown in these communications.

In Cumberland Casualty & Surety Co. v. Nkwazi, L.L.C., 2003 W.L. 21354608 (Tex. App. 2003), the court faced a situation in which an owner sued the performance bond surety alleging that the contractor had defaulted. The bond was written on an AIA bond form that anticipated the use of an AIA form contract between the owner and contractor. This is important because, according to the bond, the conditions for the surety’s liability were tied to the owner adhering to all of the conditions of the AIA contract form.

Without the surety’s knowledge, the owner and contractor failed to enter into a formal contract. (This was in spite of the fact that the proposal itself stated that the parties anticipated signing an AIA form contract.) Instead the two parties treated the contractor’s bid proposal as the contract for the work. As you might expect, the proposal did not contain many of the terms found in the AIA contract form.

In the lawsuit the surety denied liability on the bond on grounds that the owner failed to comply with the terms of the AIA contract form. The court found the surety liable on the bond.

This case is important to producers because the surety’s representative at trial testified that it understood that its bond producer had secured copies of the executed AIA contract in advance of the issuance of the bonds for the project. This testimony implicated the producer and raised the question of whether the producer was responsible for getting a copy of the executed contract before the surety issued bonds for the project. The answer to this question was not addressed by the court (because the producer was not a party to the lawsuit) but, presumably, would depend on whether:

·         the producer affirmatively represented to the surety that it had obtained a copy of the contract; or

·         the producer had a standing agreement with the surety to obtain executed contracts before requesting that bonds be issued.

It is not apparent from reading the court’s decision whether the surety subsequently blamed the producer for the loss incurred on the bond at issue in this case.  What is clear from this decision, however, is the risk a producer runs when there are not clear procedures in place between the producer and surety for assembling the backup documentation necessary for the issuance of bonds. Without clearly outlined procedures and responsibilities, the producer runs the risk of being blamed when things go wrong.

NASBP’s General Counsel is Susan McGreevy of Husch & Eppenberger LC, Kansas City, MO. 

To assist NASBP members in understanding default insurance and educating their customers about the current product, NASBP recently updated its PowerPoint Presentations for general contractors and subcontractors. They are available as an educational tool for members and affiliates to use with individual general contractors and subcontractor customers or as a presentation to construction industry associations. Craig Hansen, Don Ardolino, Larry McMahon, and Susan McGreevey assisted in the updating of these presentations to reflect current changes in the product and policy.

To view a copy of these PowerPoint presentations, go to the Members and Affiliates Only Section of NASBP’s Web site; click on the Government Relations page and the link to the Alternative Products Technical Assistance Materials. A link to the PowerPoint Presentations is provided. For assistance with your Member and Affiliates Only userID and password, please contact Colin Chiles, Government Relations Coordinator, at cchiles@nasbp.org or 202/464-1175.

Questions about default insurance and these educational products should be directed to Connie Lynch, Director, Government Relations, at clynch@nasbp.org or 202/454-1173.

Planning:  Everybody Does It! 
They Just Don’t Realize It!  

Most agency principals and owners “shrug” at the word “Planning.” They do not realize, however, they do plan; they just don’t commit the plan to writing or communicate the plan to their staff, the implementers of the plan. These are two of the most critical steps in the planning process. And when agency principals and owners feel they are not successful, planning activities cease.

Every agency principal or owner thinks about their business, how they can improve it or how to address issues facing their operation such as a hard-market, increasing sales or reducing expenses. The planning done by most agency principals and owners deals primarily with revenues and how they can increase sales. Rightfully so! This is one of the most important aspects of the planning process and drives everything else with the agency. The only problem, owners and principals do not outline in detail how they plan on meeting their sales objectives or communicate their plan to others responsible for sales. In many cases, this means the service representatives who are a great resource for leads.

Sales are not the only aspect of an agency one needs to plan for.  Other areas include: the operations including automation/technology, workflow and procedures, the facility (space); financial management including a review their income statement and balance sheet, accounting procedures and controls such as managing receivables; and perpetuation. Unfortunately, perpetuation is one of the last things an agency owner or principal has a plan. Today, they think they can sell to a bank for 2 or 3 times revenue. However, the likelihood of this happening is very slim, especially at the agency owners or principals price. It is never too late to think about and plan for perpetuation.

To make sure all of the areas are addressed for the plan, one needs a process to follow.  But one process does not fit all. Each agency owner or principal needs to develop a process they are comfortable with. Typically, it takes a few years to refine, but it is well worth the effort and then planning becomes part of the business.

To obtain additional information on the topic of planning, go to the MarshBerry web site – www.marshberry.com and type the word “Plan” in the “Search” field. This provides a listing of items related to planning.

_____________________________

Marsh, Berry & Company, Inc., founded in 1981, is a management consulting firm for the financial services industry and the preeminent provider of consulting services for independent insurance agency owners and brokers. Services include agency valuations, perpetuation planning, compensation strategies, financial management, strategic planning and mergers and acquisitions.

MarshBerry.com, an on-line agency management resource, can help NASBP members improve sales, boost employee performance and measure their value.

For more information, or to subscribe to MarshBerry.com, please login to NASBP’s “Members and Affiliates Only” site.

When you attend future NASBP meetings, you may notice a “Golden Apple” pin on the name badges of those who serve the Association as instructors at NASBP Surety Schools. Our enthusiastic faculty provides a commitment of time and expertise to the schools, and their hard work is greatly appreciated by all.

Feel free to ask faculty members about the upcoming August Level I Surety School or the November Level III Surety School. They will be proud to discuss the Wm. J. Angell Surety School program with you!

TEA-21 Reauthorization:
Conferees Named, Hold First Meeting

Seventy-three members of both the House and Senate have been named to the conference committee that will negotiate the differences between the six-year reauthorization bills passed by each chamber. The Senate version of the bill would authorize $318 billion in federal transportation investment, while the House version would authorize $39 billion less than the Senate version and President Bush has said he will only support final language that’s $62 billion less than the Senate version.

Members of the conference committee held their first meeting on June 9, 2004. The meeting consisted of brief opening statements and agreement on 11  non-controversial provisions.  Among the provisions adopted by conferees were:

·    Continuation of the Disadvantaged Business Enterprise (DBE) Program;

·    Reauthorization of the Puerto Rico Highway Program (funding levels to be  determined later);

·    Allowing crime prevention and security to be considered eligible transit capital expenses;

·    Repealing the Suspended Light Rail Technology Pilot Project;

·    Continuation of current law regarding transit rolling stock acquisition and allowing transit grantees to select capital items based on factors other than price alone;

·    Requiring state safety oversight to begin during the design phase of a transit system, as opposed to the current application which begins once the system is operational; and

·    Establishing competition as the presumptive standard for transit procurement actions.

The next meeting is scheduled for June 23, 2004 and Senate Environment and Public Works Committee Chairman James Inhofe directed staff to work to resolve as many “non-money” issues as possible, so they may be adopted at the next meeting.  To contact your Members of Congress to express support for the $318 billion investment level in the Senate-passed highway bill, call them toll-free by using the American Road and Transportation Builders Association (ARTBA) Action Hotline at 1-888-448-2782.  Pipeline will continue to provide updates as the final language of the TEA-21 Reauthorization is crafted.

Briefly Noted

POSITIONS

Marsh USA Inc. has an opening for a Surety Representative for the Client Support Services/Surety Business to work in the Austin, Texas office.

·         Responsibilities: The Surety Representative will head up day-to-day client placement needs; contact carriers and negotiate placement of bonds as required; seek/gain approvals from carriers on client requests as required; and serve as main carrier contact handling all carrier phone calls and emails.

·         Requirements: Minimum 2 years’ experience in brokering, underwriting or client service; Bachelor’s degree or business diploma preferred; surety training/certification (licenses) preferred; strong business software skills including MS Excel and Word and Lotus Notes; excellent communication skills.

·         Contact:  Stephanie Fine, Corporate Staffing at 201-284-3622 or email resume to Stephanie.Fine@Marsh.com. Visit www.marsh.com for more job and company information.

Marsh USA Inc. has an opening for a Surety Supervisor for Client Support Services/Surety Business to work in the Austin, Texas office.

·         Responsibilities: Manage client relationships; oversee Surety Representatives’ daily client contacts and daily work; interface between broking and processing units; manage quality control initiatives; manage accounts receivable/payable in collaboration with Surety Manager and broking/processing team; assist Surety Representatives with organizational planning; set and review deadlines; support negotiations and approvals as required.

·         Requirements: Minimum 5 years’ surety experience as an agent, broker or underwriter; Bachelor’s degree preferred; surety licenses preferred; strong business software skills including MS Office suite (Excel, Access, Word, PowerPoint), and Lotus Notes; excellent skills in communication, negotiation, and issue resolution.

·         Contact: Stephanie Fine, Corporate Staffing at 201-284-3622 or email resume to Stephanie.Fine@Marsh.com. Visit www.marsh.com for more job and company information.

NASBP Member Elected President of WI Chapter of CFMA

Richard J. DeVries, Bond Manager of NASBP member agency, Insurance Services, Inc. in Appleton, WI, recently became the first associate member of the CFMA Wisconsin Chapter to be elected chapter president.

The Surety Association of New Jersey (NJSA) Announces Class

SANJ is offering a Surety Class to take place August 9, 2004, at the Dolce Hamilton Park Conference Center in Florham Park, NJ.  This class is geared to those who are new to surety and would like to expand their knowledge base or those who would like to learn more about a specific area.  The daylong class will take place from 8AM to 4PM and will feature topics on basic suretyship, non-contract surety, reinsurance, claims, contract surety, financial analysis and agent/company relationships (including ethics).  Presenters are various members of the local surety community, including representatives from Chubb, St. Paul Travelers, Safeco, XL Re and FIA as well as a local producer and CPA firm.  Please refer to the SANJ website at www.njsurety.org for further details or to contact a board member regarding CE credits.

What’s Happened in Your State?
New Bills and Status of Previously Reported Bills

At the present time, 11 states are still in session, with Delaware, Louisiana, and Rhode Island scheduled to adjourn later this month.  Below is a sampling of some of the new legislation that has surfaced and updates to legislation previously reported:

New Bills

FL S 2588
Removes resident agent requirements and provides requirements for licensing of nonresident agents.  Passed Both Houses; awaits Governor’s signature.

LA HCR 290
Requests the Louisiana Advisory Commission on Intergovernmental Relations to study alternative methods of competitive sealed bidding, specifically reverse auctions.  Adopted by House.

MN S 1790
Raises the threshold for competitive bidding and bonds to $50,000 or more for local jurisdictions; permits reverse auctions for purchasing supplies, materials and equipment; and local jurisdictions may require performance and payment bonds to be furnished electronically.  Signed into law by Governor.

NC H 1424 and NC S 1084
Amend anti-directed surety law by making technical changes; do not significantly change the anti-directed surety provisions.  Await committee action.

NY S 3363
Raises threshold from $50,000 to $100,000.  Passed Senate; in Assembly committee.

NY S 7253
Provides additional penalties for failure to pay prevailing wages.  Responsible parties (surety or contractor) would incur penalty of treble damages (3x wages of an affected employee) as well as a civil penalty of 25% of the sum of wages for all affected employees.  Awaits Senate action.

Update of Previously Reported Bills 

Additionally, the following bills were reported in previous editions of Pipeline.  The original Pipeline report may be viewed by clicking on the link at the end of each status report:

AZ H 2105
Eliminates competitive bidding for school districts.  Signed into law by Governor (January’04 Pipeline).

AZ H 2351<br. > <>
Eliminates performance and payments bond for simplified construction procurement program.  Signed into law by Governor (January’04 Pipeline).  UPDATE:  The provision stating that “Any procurement which does not exceed the aggregate amount of less than $35,000” has been changed to $50,000.  Changed the small business program maximum aggregate dollar amount from $25,000 to $50,000, and deleted the performance and payment bond requirements for the “simplified construction procurement program” (a program involving construction not exceeding $100,000).

CO S 143
Raises threshold limit.  Signed into law by Governor (January’04 Pipeline).

FL H 785
Bond waiver for Hillsborough County.  Passed both House and Senate; awaits Governor’s signature (February’04 Pipeline).

FL H 1779
Removes resident agent requirements.  Substituted by FL S 2588 (March’04 Pipeline).

IN H 1266
Permits reverse auctions.  Signed into law by Governor (January’04 Pipeline).

KS S 408
Bond waiver for municipalities.  Passed Senate; died in House – Session adjourned, no carryover (February’04 Pipeline).  UPDATE:  Would have increased the Little Miller Act threshold from $40,000 to $100,000, but Senate Committee deleted waiver language.

KY H 405
Ties threshold to small purchase authority.  Died in House – Session adjourned, no carryover (February’04 Pipeline).

MN H 1717
Raises threshold for local jurisdictions and permits reverse auctions.  Substituted by MN S 1790 (January’04 Pipeline).

MO H 1362
Passed both House and Senate; awaits Governor’s signature (February’04 Pipeline).

MO S 1028
Permits reverse auctions.  Passed Senate; died in House – Session adjourned, no carryover (January’04 Pipeline).

MS H 1581
Clarifies statutory language on performance and payment bond claims.  Signed into law by Governor (March’04 Pipeline).

NM S 479
Reduces maximum construction cost for design-build road and highway projects.  Died in Senate – Session adjourned no carryover (February’04 Pipeline).

NY A 9556 and NY S 6056
Permit the use of owner-controlled or wrap-up surety programs.  (February’04 Pipeline) .

OK H 2604
Raises bond threshold.  Died in House – Session adjourned, no carryover (February’04 Pipeline).

TN H 3185
Design-build for construction of public education facilities.  Died in House – Session adjourned, no carryover (February’04 Pipeline).

UT H 20
Claims notice.  Signed into law by Governor (January’04 Pipeline).

VA H 148
Design-build performance and payment bond requirements.  Signed into law by Governor (January’04 Pipeline).

VA H 460
Requires power-of-attorney attached to bond.  Signed into law by Governor (January’04 Pipeline).

WI A 990
Municipalities may require subdivision bond or other security.  Died in Assembly – Session adjourned no carryover  (March’04 Pipeline).

WV S 694
Government construction projects awarded to lowest qualified bidder.  Vetoed by Governor (March’04 Pipeline).

As bills are filed, Pipeline will report on the introduction of industry-related legislation.  NASBP members and affiliates can access updates on 2004 legislative activity by visiting the “Member and Affiliates Only” section of the NASBP Web site at: http://www.nasbp.org/membersonly_files/memlogin.cfm.  Login and click on “Government Relations” and then “Bill Tracking 2004.”  When asked for your User ID and Password, simply enter the same information used to access the “Member and Affiliates Only” section.  Instructions on how to use the service are provided on the Web page.

Massachusetts Overhauls Public Construction Statutes

Massachusetts’ lawmakers passed the first top-to-bottom overhaul of public construction policy in more than two decades.  MA S 2358 now awaits the signature of Governor Mitt Romney. According to Jack Curtin of NASBP Member Agency, Curtin International Insurance & Bonding Agency, Inc., all provisions of the bill will go into effect 90 days from the Governor’s signing except the Construction Management At Risk (CM At-Risk) portion, which will go into effect six months after signing.

The six-month window for CM At-Risk is intended to give the industry an opportunity to work with the Inspector General on writing regulations to govern how his office will implement its duties as the agency to qualify awarding authorities to use the CM at risk method. Curtin will serve on the advisory group for CM At-Risk as well as the group that will develop procedures to certify subcontractors as eligible to do public work.

Of particular interest to the surety industry, the bill requires that all subcontractor bidders on design-bid-build projects must provide performance and payment bonds on all projects over $10,000,000. Additionally, all the trades that are considered filed subcontractors under the design-bid-build statute are required to provide performance and payment bonds on CM At-Risk projects. That includes 17 trades that comprise anywhere from 40% to 60% of the work.

Recent Change to the T-List

The Finance and Management Services Branch, U.S. Department of the Treasury, recently announced the following change to the Treasury List (T-List) of approved surety companies:  

Deleted from the Listing of Approved Sureties

ICI Mutual Insurance Company, effective 6/15/04.

For more information, go to http://fms.treas.gov/c570/c570.html and http://fms.treas.gov/c570/supplements.html.

Time Is Running Out To Register For Level I Surety School!

Space is limited in the William J. Angell Level I Surety School, which will take place at The Fairmont Hotel in Dallas, TX on August 11-14, 2004. This is the only Level I session to be offered until January 2005.   Register while there is still space available at the hotel and for the class. To guarantee the special room rate, reservations must be made before July 11. 

Register Online
Download Brochure

NASBP Welcomes New Members and Affiliates

NASBP welcomes the following new Members and Affiliates who have joined the Association since the last issue of Pipeline.

NEW MEMBERS

Saul-Metcho LLC
200 Park Avenue; Ste. 108
Falls Church, VA  22046
Key Contact: Christopher Saul

Smith Brothers Insurance, Inc.
68 National Drive
Glastonbury, CT  06033
Key Contact: James B. Nelson
www.smitty.com

NEW AFFILIATES

Arch Insurance Group
3 Parkway
1601 Cherry Street, Suite 1500
Philadelphia, PA  19102
Key Contact: Charles Brian Schmalz
www.archinsurance.com

SureTec Insurance Company
10,000 Memorial Drive, Ste. 330
Houston, TX  77024
Key Contact: John Knox, Jr.
www.suretec.com

SIO Offers Free Copies of ENR Surety Supplement

Disclaimer: This information is provided for educational and informational purposes only and is not intended to serve as legal advice. Readers are cautioned to consult their legal counsel on any specific matters.