What’s New with the Power of Attorney Issue?

Power of Attorney Issue Goes to FAR Council

NASBP recently learned that Angela Styles, former Administrator of the Office of Federal Procurement Policy (OFPP) referred the power of attorney issue to the Federal Acquisition Regulatory (FAR) Council in a memorandum dated September 12, 2003. The issue concerns the implementation of the All Seasons decision handed down by the General Accounting Office in December, 2002, and the required conditions of the powers of attorneys that are submitted with surety bonds on federal contracts. The American Insurance Association, Associated General Contractors, NASBP, and The Surety Association of America, are continuing their collaborative effort to bring this issue to the attention of the various Federal agencies represented on the FAR Council and urge a timely decision relative to this issue.

To view Ms. Styles’ memorandum, please Click Here.  Please note that the “strawman language” Ms. Styles submitted is for discussion purposes only and may not reflect the final language proposed by the FAR Council.  Direct questions or requests for additional information to Connie Lynch, Director, Government Relations, at 202/686-3700, ext. 1313, or at clynch@nasbp.org. 

Doing Business in the Wake of All Seasons:  NASBP Urges Its Members to Be “Super Cautious” When Submitting Bid Documents to Federal Agencies

The message is an update of a memo sent to key contacts of NASBP member agencies on March 10, 2003.   Except for some recent events concerning the referral of the issue to the Federal Acquisition Regulatory (FAR) Council by the former Administrator of the Office of Federal Procurement Policy (see related article) the contents of that memo are still relevant today. NASBP members are urged to refer to it as questions arise in their agencies concerning powers of attorney (POA) accompanying bid bonds on federal projects (CLICK HERE to see memo to members dated March 10, 2003).

This document provides answers to some of the questions asked of NASBP since the March memo was disseminated.  This list is not all-inclusive of every aspect of the POA issue, but includes only those questions brought to the attention of NASBP, usually after a Federal contracting agency has rejected a bid.

Question:    How is the GAO’s opinion in All Seasons being interpreted by Federal agencies?

Answer:     Not all agencies have taken any particular action in response to this opinion, but some appear to be taking the position that powers of attorney, as well as certificates of the surety’s authority, may need to contain original or “wet” signatures of surety company officials.

Question:   Does the GAO’s opinion in All Seasons apply to just the U.S. Army Corps of Engineers’ (USACE) projects or all Federal projects?

Answer:     Although GAO is not a court, and its opinions are not binding on agencies in the same way that court decisions are, Federal agencies customarily defer to GAO, whether civilian or military.

Question:   I’ve heard that some USACE district offices are less demanding than others. Is this true?

Answer:     It may be that some agencies have not as diligently addressed this  issue, but the fact that one has not as yet done so should not be taken as an indication that it won’t do so on the next bid opening. We’ve had reports that several agencies are carefully scrutinizing surety documents, especially those submitted with bids, and deeming a bid nonresponsive if the power of attorney does not contain a “wet” signature or if a certificate of the surety’s authority containing a “wet signature” is not attached to the power of attorney.

Question:   Will a Federal agency accept powers of attorney that have been duplicated, Xeroxed, or Faxed?

Answer:     It is highly unlikely that a Federal agency will accept such a power of attorney.  This was the issue on which the U.S. District Court ruled against All Seasons, and that decision should be followed by the agencies.

Question:  Will a Federal agency accept powers of attorney that have been mechanically produced and signed?

Answer:     Possibly, but there is not enough clear guidance from the Federal Government to have any degree of certainty.  The GAO opinion placed great emphasis on the government’s ability to be able to tell that the person signing the power of attorney intended to agree to all the contents contained in it.  There will be less risk of bids being disqualified if the powers of attorney bear signatures from a representative of the surety, which are clearly applied after the document is produced.

Question:   My customer just asks for a bid bond and gives me no information about any requirements for powers of attorney, which may be included in the project specifications.  What should I do?

Answer:     Without such information, it would be difficult to make sure that all necessary procedures are being complied with. Since most NASBP members are neither attorneys nor experts in interpreting contracts, they should ask their customers to tell them, as producers, what specific requirements for bonds, powers of attorney or certificates apply to the particular procurement.  If the customer is not competent to figure this out on its own (and it may not be easy), the producer should advise the customer to have its attorney review the documents and give an opinion. Producers should also advise their customers if they know that a particular agency has rejected (or indicated that it may reject) the form of document used by a particular surety. NASBP also suggests that whatever information the customer furnishes the producer about an agency’s requirements be shared with their customers’ sureties.

Question:  My customer just had a bid rejected by a contracting agency because the power of attorney was not submitted correctly.  What recourse is available to my customer?

Answer:      The customer should immediately consult its attorney, as there may (or may not) be anything it can do to reverse the agency decision, but time will be critical in any case.  A protestor (a bidder with standing) may be required to take action in as little as 10 days from the date of the bid opening. 

Connie Lynch, Director, Government Relations, and Susan McGreevy, NASBP’s General Counsel, compiled this information. Questions or requests for additional information should be directed to Connie Lynch at NASBP Headquarters, 202/686–3700,ext, 127, or to clynch@nasbp.org.

 

Reauthorizing the SBA: NASBP Leads
Charge to Remove Bond Waiver Language

The Small Business Act is due for reauthorization this year, including the surety bond guaranty program.  The House version, H.R. 2802, is a complete rewrite of the Small Business Act, line by line, and resurrects a provision waiving bonds for 8(a) contractors under defined, specific circumstances.  This particular waiver sunsetted in 1988, and has been reinserted into the act by the ranking minority member, Rep. Nydia Velazquez (D-NY).

On Friday, September 26^th the Senate version, S. 1375, passed by unanimous consent.  S. 1375 does not contain the waiver language.

Currently the House bill is still being negotiated and has yet to be scheduled for a vote.  NASBP is actively opposing the bond waiver provision and would like to recognize the following NASBP members who’ve taken an active role in contacting members of the House and Senate Small Business Committees from their states:  Mary Brinckerhoff, John Bustard, Jack Curtin, Dennis Flatness, Mike Gilroy, Ed Heine, Lee Hill, Denny Lutz, Bob Shaw and Bud Withrow.

Please feel free to contact your Senators or Representative to express opposition to the bond waiver that currently appears in the House version of the SBA Reauthorization bill.  Senators should be thanked for passing their waiver-free bill, and Representatives should be asked to support removing the waiver provision from H.R. 2802.  For your convenience NASBP has prepared a set of “Talking Points” that can be accessed by Clicking Here.  You can find contact information for your Senators or Representative by visiting the following Websites: http://www.senate.gov and http://www.house.gov. If you contact the Members of Congress who represent you, please call Colin Chiles, Government Relations Coordinator, at 202/686-3700, ext. 1305 or email him at cchiles@nasbp.org.

 

President’s Message

Getting the Most From Your Membership $$$

What a week!  The week of September 8 was extremely busy, yet it gave us all a chance to pause and reflect.  As I sat on Southwest Airlines returning from the final “Super Regional” meeting in Lake Tahoe, my mind wandered over the past week, the various events, the emotional highs and lows, and what I had learned during this first full week of September, 2003.

On Tuesday, the first telephone conference meeting of the ad hoc membership committee was completed with great input from all participating.  One major theme kept surfacing – adding value to NASBP membership.  Yes, the leadership of NASBP is continually seeking new ways to add value to your membership.  That’s the main goal of the ad hoc committee.  Even with the great input from all the participants, we all realized that adding value would be a challenge for years to come.

On Thursday the 11th, “Patriot Day”, we all slowed down and remembered the tragedy that touched us all two years ago.  The horror that struck our nation, the fellow Americans lost, whether we knew anyone or not (One of the flight attendants on the American flight was a customer’s daughter), and the numerous ways our lives have changed, made me reflect on just how important relationships are to each of us.

Completing the week was the extremely successful Regions 1, 2, and 3 meeting at Lake Tahoe.  What a great turnout, terrific program, outstanding venue, and most importantly–a fantastic group of people!  The opportunity to visit with so many friends I’ve known for so long (And let me tell you, there is nothing sweeter than winning $5 off of John Hannum because of my Hogs whippin’ his Horns), and start new friendships (Yes, some started at the blackjack table!), really helped me focus my thoughts on relationships, NASBP, and “adding value.”

Everyone is aware that membership in this organization comes with a price tag.  What do you get for the money?  Lots!  But the #1 benefit you get is the people!  This group consists of some of the finest people I’ll ever have a chance to meet and know.  For me, the ‘added value’ of being a member of NASBP is just that–the relationships I’ve added to my life.

We all know that the business we’re in, suretyship, is a relationship business.  We concentrate mainly on relationships with our customers and our companies, and we bust our chops to keep these relationships solid.  But do we really recognize and appreciate the value of our relationships with our fellow NASBP members, our peers?  Involvement in NASBP can be the vehicle for doing just that–maintaining and renewing these relationships.

So if you’ve been asking yourself what you get for your dues dollars, my first answer is: the people.  Truly, the best way to take advantage of this ‘added value’ is to get involved and stay involved.  Hopefully, you’ll feel as I do, that everything after that is gravy!

Matthew K. “Matt” Cashion, Jr. is Secretary/Treasurer of The Cashion Company, Inc. in Little Rock, AR.  He can be reached at Mattc@cashionco.com.

 

 

NASBP Urges Federal Accounting Standards Board to Reconsider Decision

 NASBP joined the Associated General Contractors of America (AGC) and the Construction Financial Management Association (CFMA) in expressing concern about the applicability of its Statement of Financial Accounting Standards No. 150 (FAS 150), Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity, to non-public companies.

In a letter dated September 24, 2003, NASBP urged the Federal Accounting Standards Board (FASB) to reconsider FAS 150 and exempt non-public companies from its requirements.  To view the letter, please Click Here.

FAS 150 would have a negative effect on the equity of contractors and subcontractors.  The requirement would force private companies to account for “mandatory redeemable shares” and other “buy-sell agreement” instruments as liabilities rather than assets.  It would negatively affect the balance sheet and income statement of non-public construction and construction-related companies and significantly jeopardize their ability to obtain surety bonds.

NASBP is joining other interested associations in a coalition to address FASB’s decision and will continue to monitor the situation and provide updates in subsequent issues of Pipeline.

 

President Bush Signs 5-Month TEA-21 Extension

On the day it was to expire, September 30, 2003, President Bush took action to extend TEA-21, the federal highway and transit program. By signing the bill (H.R. 3087) to permit a short-term extension, Bush ensured that federal highway and transit funding would continue in place until February 29, 2004.

Leaders of the congressional committees with jurisdiction over the federal surface transportation programs are committed to enacting a six-year TEA-21 reauthorization during the next five months.  Similarly, House Speaker Dennis Hastert (R-Ill) also has expressed his commitment to completing the reauthorization of this program during the extension.
From NASBP’s General Counsel

Liability for Overrun Premiums

It is rare to find a construction contract that does not have change orders that alter the price of the contract.  In most states, the price for the surety bond premium is determined by the rates filed with the state’s insurance commission, and most of these rate schedules provide for an adjustment to the premium (upwards or downwards) if the contract price is changed.  Surety companies differ in how and when they make these price adjustments.  There are several legal issues involved here.

How is the adjustment determined? To adjust the price, the surety company first has to know of the change.  If it continues to bond the contractor, the surety company not only has the leverage to require prompt reporting from the contractor, but it also is probably receiving financial information on a current basis.

The problem generally arises when the surety company no longer has a relationship with the contractor.  In that case, the surety frequently can get the information just by sending a “status update” letter to the obligee.  If that doesn’t work, and it is worth the time and money, the surety company can always file a lawsuit against the contractor and get the information from the contractor or from the obligee by subpoena.

What if the contractor doesn’t pay?  The contractor and its indemnitors can be sued for breach of contract.  The lack of payment, however, will probably not affect the validity of the bond in the hands of the obligee.

If the contract was with a government agency, the consequences to the contractor of collecting money for extra bond premiums, but not paying that money to the surety, can be very, very serious.  It could be a violation of the False Claims Act, 31 U.S.C. §3729 for a contractor to accept money under false pretenses, and a violation could lead to suspension or debarment, fines, penalties and possibly criminal prosecution.

What if the surety is no longer in business?  It is, unfortunately, not unheard of for a surety to fail.  There have been instances in which sureties went into receivership or liquidation, and in the process, the ball gets dropped in collecting these overrun premiums.  This does not turn the premium (if collected by the contractor) into “found money.”  As long as the statute of limitations has not expired, the surety or the governmental agency that controls it can come back against the contractor for the premium.

What if it’s too late for the contractor to collect the money? As part of the old British “common law” system, there are several different equitable principles such as “estoppel” and  “laches.” These principles can be used to avoid paying money if the person bringing the claim somehow caused an entity to change its position, so that it is no longer fair to make that entity pay.  For example, if the contractor could not collect the overrun premium from a government customer because it could not get necessary paperwork from the surety, and was forced by a government agency to close out the job, the contractor is probably in good shape to argue that it would be inequitable to make him/her pay a belated bill out of pocket.

This situation is probably rare.  In most cases, the contractor will be liable to the surety company whether the contractor collected the extra premium or not, on the theory that it “knew or should have known” that it had this obligation when it purchased the bond.  The professional bond producer can help avoid such unpleasant situations by making sure that his or her customer understands how overrun premiums work and is prepared to deal with them when the time comes.

What should the contractor do who holds old overrun money? The safest course would be to get it out of the contractor’s hands–either return it to the paying agency, pay it to the surety, or send it to the government agency that is controlling an insolvent surety.  Returning it to a government agency brings with it the risk that, if and when the surety company makes a demand, it will be difficult if not impossible to get the government to re-open a dormant file to issue the check again.  For this reason, it may be better to contact the surety company or insurance commissioner in charge of an insolvent surety to find out what to do.  As a last resort, the contractor can file a legal action known as an “interpleader,” and pay the money into court, to let the obligee and the surety company and insurance commissioner fight over it.

The important point for the contractor to understand is that once it has signed an indemnity agreement promising to pay the filed rates for bonds, it has an obligation to see that the surety company gets all the premium to which it is entitled.  The fact that someone forgot to ask for it doesn’t change that obligation.

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

 

SuretyPAC Thanks Contributors, Encourages Others to Contribute

SuretyPAC would like to express its appreciation to the over 40 members who graciously contributed to its coffers since the beginning of 2003.  The contributions continue to strengthen SuretyPAC’s ability to support “surety-friendly” candidates for congressional seats.  The $11,000+ collected to date will go to support worthy candidates in the upcoming 2004 elections.

Questions have arisen at the regional meetings this year regarding contributions to SuretyPAC.  The following is an attempt to clarify the questions that have been raised:

How do I qualify for a sticker on my name badge at NASBP meetings?
Because 2003 was the beginning of a new two-year election cycle, those who made.  SuretyPAC contributions during the last election cycle (2001-2002) must make a contribution this year to qualify for a badge sticker at upcoming meetings.  Contributions made this year will carry over to 2004.  2005 will serve as the start of the next election cycle.  Those who wish to contribute on an annual basis, rather than on a cycle basis, are always welcome to do so.  Any amount may be contributed, but stickers only are provided to those who contribute $100 or more.

May I contribute if my agency has not authorized?
Yes, you may contribute.  Authorization gives permission to SuretyPAC to directly solicit designated employees of a particular agency.  Anyone may contribute to SuretyPAC the only requirement is that contributions must be in the form of a personal check.

As always, contributors will have the opportunity to recommend and comment on possible candidates for the dispersal of funds.  In addition, several contributors will have the honor of personally delivering a check from SuretyPAC to a chosen candidate from their state or congressional district.  The size and importance of SuretyPAC continues to grow every year and with the continued generosity of NASBP members it will continue to strengthen the industry.

Bill Maroney, SuretyPAC Chair, would like to recognize the following members for their contributions, and, more importantly, the dedication to the surety industry these contributions represent:

 SuretyPAC Contributors 2003-2004 Election Cycle

$1000+ Agencies   Armitage & Co., Inc.
Elmont, NY

K & S Group, Inc.
DBA Keystone Southwest Insurance Agencies
Rockwall, TX

Minick & Company, Inc.
Albuquerque, NM

Gold Club $500+

1. W. Burke, CIC,CLU
   Burke Insurance Group, Inc.
   Las Cruces, NM

Matthew K. Cashion, Jr., CIC
The Cashion Company, Inc.
Little Rock, AR

Richard W. Daiker
K & S Group, Inc.DBA Keystone Southwest Insurance Agencies
Rockwall, TX

Carl Dohn
Dohn & Associates
Palatine, IL

Rod A. Higgins
Higgins & Rutledge Insurance, Inc.
Boise, ID

Richard Minick
Minick & Company, Inc.
Albuquerque, NM

John Rindt
JDW Insurance
El Paso, TX

Silver Club $250-$499

John Adams
T.J. Adams Group, LLC
Lombard, IL

Don K. Ardolino
J.D. Kutter Insurance Associates
St. Louis, MO

Travis E. Brown
Hilb, Rogal & Hamilton Oklahoma
Oklahoma City, OK

Raymond C. Carman
Armitage & Co., Inc. Carman/Armitage
Elmont, NY

Sarah Finn
IMA
Denver, CO

Janice Fiscina
Armitage & Co., Inc.
Elmont, NY

Robert C. Fricke
Frank Siddons Insurance, Inc.
Austin, TX

Edward J. Heine, CIC
Payne Financial Group, Inc.
Missoula, MT

John D. Klein
Klein Agency, Inc.
Shoreview, MN

Martin Lyons
Armitage & Co., Inc.
Elmont, NY

David McKee
Constructors Bonding, Inc.
Tempe, AZ

Steven E. Minard, AFSB, CPCU
Minard-Ames Insurance Group
Phoenix, AZ

James Moore
Scheer’s, Inc.
Coutryside, IL

Sam J. Mullis, Jr.
Mullis Newby Hurst
Dallas, TX

John W. Newby
Mullis Newby Hurst
Dallas, TX

Thomas M. Padilla
Manuel Lujan Insurance, Inc.
Albuquerque, NM

Craig Remick
Acordia
Bloomington, MN

James Scheer
Scheer’s, Inc.
Countryside, IL

Dominick  J. Scotto
Armitage & Co., Inc .
Elmont, NY

Stephen A. Spencer
Insurance Associates, Inc.
Rockville, MD

Bronze Club $100-$249

• James J. Bovenzi, CIC

• Hilb, Rogal and Hamilton of Amarillo

• Amarillo, TX

John N. Bustard
King & Neel, Inc.
Honolulu, HI

David Cassidy
Cassidy’s Associated Insurers, Inc.
Hagatna, Guam

Jason D. Gusso
Holmes, Murphy & Associates, Inc.
Sioux Falls, SD

William F. Hertel
Mastors & Servant, Ltd.
East Greenwich, RI

Kurt Lundblad
Cedarleaf, Cedarleaf & Cedarleaf, Inc.
St. Paul, MN

Lawrence F. McMahon
Driver Alliant Insurance Services, Inc.
San Diego, CA

Aldo Pasquariello
Insurance Associates, Inc.
Rockville, MD

Steve Poleman
Rich &
Cartmill, Inc.
Tulsa, OK

Edworth L. Ray
Ray, Inc.
Tri-Cities, WA

Dennis E. Scully
Mapes Insurance Agency, Inc.
Grand Rapids, MI

Sheryll Shaw
IMA
Denver, CO

Mike Specht
Minard-Ames Insurance Group
Phoenix, AZ

Thomas W. Titsworth, CPCU
Twin T Insurance Agency
Colorado Springs, CO

Darrin Weber
Dodson-Bateman & Company
Dallas, TX

Brian E. Wilcox
HMS Insurance Associates
Brooklandville, MD

 

Surety School News

Wm. J. Angell August Surety School Graduates Level I Class

Students from across the country attended the Level I Surety School in Dallas from August 6-9.  Joseph Gugluizza of E.K. McConkey & Company in York, PA was selected as the “Outstanding Student.”

NASBP appreciates the faculty commitment by David Castillo (Marsh USA, Inc.), Darrin Weber (Dodson-Bateman & Company) and Lynne Cook (Early, Cassidy & Schilling, Inc.) for sharing their expertise with the students.

The next Level I and Level II Surety School will take place at the Houston Renaissance Hotel February 8 – 13, 2004.

View photos of the August 2003 Level I class and the “Outstanding Student”

 

New & Improved Level III Surety School–Space Limited

Register now for the curriculum-enhanced William J. Angell Surety School Level III that will take place in Houston, TX, on November 13-15, 2003.  This advanced level professional development education program is designed for Level II graduates or those with a minimum of 5-10 years of industry-related work.

 

Briefly Noted

POSITIONS

Liberty Bond Services is seeking a Surety Underwriter for its Keene, NH office.

Requirements: Three or more years contract surety and/or commercial surety experience; strong underwriting and marketing skills; excellent interpersonal and communication skills; bachelor’s degree in business related field preferred.

Contact: Apply online at www.libertymutual.com, in the Careers Section.  Enter 5429BR into the keyword search and submit your resume to the position.

Old Republic Surety Company has an opening for a Field Underwriter to work from the Minnesota Twin Cities area.

Responsibilities: Market and underwrite surety and fidelity bonds in the states of Minnesota, North and South Dakota; travel is required 4-5 days/week.

Requirements:  Contract and miscellaneous underwriting experience (3-5 years) Benefits include company car and bonus plans.

Contact:  Janell Manson, H.R. Director at 262/797-2643, e-mail manson@orsurety.com or fax resume to 262/797-8874.  Visit www.orsurety.com for more company information. EOE

XL Reinsurance Americas has an opening for a Surety Underwriter in its Stamford, CT office.

Responsibilities:  Assist on underwriting audits and special acceptances; assist in the underwriting and production of new and renewal treaty and facultative bond business; make prompt and decisive recommendations regarding underwriting issues; maintain complete and well-documented account files; develop treaty underwriting skills; travel required.

Requirements:  Strong primary surety underwriting skills with a willingness to learn the reinsurance business; under ten years of primary experience; excellent technical expertise; excellent communication skills (both oral and written); strong planning and organization skills; excellent teamwork and collaboration skills; demonstrated ability to build relationships, work in a team environment, make sound judgments and decisions, and work independently; accounting and finance background preferred.

Contact:  Christina Gin-Nielsen, Senior Recruiter, XL America; 70 Seaview Avenue; Stamford, CT 06902; Fax: (203) 964-9811; Christina.gin-nielsen@xlgs.com.  EOE

 

New Addition to NASBP Headquarters Staff

On September 22, Patrick J. McGraw joined NASBP as its new database/membership coordinator.  Formerly the membership services manager at the Northern Virginia Technology Council, Patrick brings to the position seven years of association membership growth, retention, and marketing experience, as well as strong database management skills.  Patrick will take the lead on maintaining the integrity of NASBP’s database and membership records, as well as manage the membership recruitment and retention process.  Please join us in welcoming Patrick to NASBP!

 

Surety in Print: SIO Gets the Word Out

 

The Surety Information Office (SIO) has had a productive year reaching out to contractors, owners, design professionals, and the surety industry by having articles published throughout the country. Whether printed in a niche-market magazine, or a national periodical, SIO’s articles communicate the essential messages about contract surety bonds and address timely and important issues. Discover a sampling of published and soon-to-be published articles and features SIO has been working on throughout the year.

»   ABC Construction Executive – The November issue of the Associated Builders and      Contractors’ magazine will feature a Construction Risk Management section focusing on surety bonds. General contractors will be informed about the surety industry, payment bonds, current underwriting standards, and legal issues.

 »  Asphalt Contractor – The magazine’s November Bidding & Estimating issue will feature an article describing the benefits and how-tos of surety bonding. These specialty contractors will benefit from learning the importance of developing a surety relationship before bid day.

»  American Agent & Broker – Surety and insurance professionals had the opportunity to discover more about the current state of the surety industry in the July 2003 issue, which featured the article, “Surety Bonds: The Tradition Continues.” The article is available in the article archive section of www.agentandbroker.com.

»  Construction Specifier – The March 2003 issue featured SIO’s article, “Understanding Surety Bonds.” These specialized design professionals were informed of how surety bonds work, how to specify them, and their value and effectiveness in assuring a capable contractor, paid subcontractors, and project completion.

»  CONSTRUCTOR – The magazine of the Associated General Contractors of America’s April 2003 issue featured the SIO article, “Subcontractor Bonding: Everything You Need to Know About This Important and Time-Honored Risk-Management Strategy.” General contractors learned about the benefits of bonding subs, the prequalification process, and the importance of communicating with their surety. Contact SIO at sio@sio.org to order a free reprint of this article. The entire April 2003 edition of CONSTRUCTOR is available online at www.agc.org in the “AGC Pressroom.”

The October issue is scheduled to feature an article on the wealth of SIO’s free educational materials and resources available to contractors.

»  ENR – The June issue featured a 20-page surety supplement, “Surety Bonds 2003: The Power to Protect, The History to Prove It.” The interests of owners, design professionals, and contractors were addressed in this in-depth article. The piece touched on the recent history of the industry, capacity issues, bond premiums, and claims, among other issues. Visit the “What’s New” section of www.sio.org for a link to the supplement.

Do you have an article that you would like to see published? Contact SIO for assistance in having your story ideas and articles placed in print. If you would like ideas for articles, SIO has an assortment laying in wait. Of course, your suggestions are also welcome. Contact SIO with issues and ideas that you would like to see addressed. Contact SIO by phone at (202) 686-7463, or send an e-mail to sio@sio.org.

 

Court Strikes Down Florida Countersignature Law 

On September 30^th, Judge Robert L. Hinkle of the United States District Court for the Northern District of Florida ruled that Florida’s statutes requiring non-resident insurance agents and brokers to have a Florida resident agent “counter-sign” any insurance policies placed by the non-resident and to pay the resident agent a statutorily mandated fee for that service are unconstitutional.  Judge Hinkle also ruled Florida’s statutes that prohibit non-resident agents and brokers from obtaining licensure as surplus lines brokers are unconstitutional.

Under the statute, resident agents are entitled to 50 percent of the commission or fee income for countersigning a policy produced by a duly licensed non-resident.  The result of the decision and the corresponding judgment entered by the court is that the “countersignature” and non-resident surplus lines licensure prohibition are invalid, and non-resident agents and brokers licensed to act as agents or brokers in the State of Florida do not need to comply with the “countersignature” requirement and may be licensed to engage in surplus lines activities.

 

Florida Surety Association Urged More
Transportation Funding for FL 

Jacob Fulmer of Travelers and Monte Rann and Matt Curran of CNA Surety attended the Mobility 20/20 Fundraiser Luncheon.  Mobility 20/20 was set up to provide support for the October 7th Orange County, FL vote for a ½ cent sales tax increase (please go to their web page for more detailed information www.mobility2020.org).  The Florida Surety Association donated $500 to this worthy cause.  Unfortunately, the voters of Orange County defeated the tax increase 54% vs. 46%.  There were over 140 specific road projects that were targeted for funding with the defeated tax increase.

 

New Scholarship Available in Credit Insurance and Surety

To mark its 75^th anniversary, the International Credit Insurance and Surety Association (ICISA) has established a new scholarship that will take the form of a post-graduate diploma course for those working in credit insurance, surety, and financial services. The International Institute for Practitioners in Credit Insurance and Surety (IPCIS), in collaboration with the University of East London Business School, will administer the course, which is the first of its kind.

The program is intended to provide an individual with the opportunity to gain an internationally recognized qualification in these areas of expertise or to obtain a foundation within these disciplines.  The scholarship pays the total student tuition fee of GBP 6,000 for the two-year diploma course.

If interested in this opportunity, please click here to see the application rules.