Single Source Blog - Surety News - Page 31

New York City process servers are required by the city to obtain a license and surety bond. There are no statewide licensing laws for process servers, but those doing business in New York City must follow rules set by the City Council.

How to get a New York City process servers’ license

A process server is someone who delivers legal documents on behalf of a lawyer�anyone serving more than five documents in a year must obtain a license. Businesses must also be licensed if they plan to assign, distribute, or deliver process to another for actual service. Process servers and agencies are licensed by the city Department of Consumer Affairs (DCA). Process servers do not need to be individually licensed if they are a licensed attorney in New York or if they are an employee of city, state, or federal agency acting within the scope of their position.

Those applying for an individual NYC process server license have the option to apply online on the DCA’s website or in person with the Basic Individual License Application. Other documents and information the DCA needs with the application include:

• Applicant’s photo ID
• Completed process server individual background information form
• Current passport-size color photo of applicant
• $10,000 surety bond (found on pages 4-5)
• Completed roster of process serving agencies (whether or not the applicant will be serving for an agency)
• Process server exam and $75 exam fee
• Electronic Device Certification
• Recordkeeping Certification
• Child Support Certification
• Granting Authority to Act Affirmation if the license is filed by someone who is not the applicant
• $75 fingerprints and processing fee

These licenses are good for two years and expire on February 28 in even years (2018, 2020, etc.). Process server applicants pay license fees based on the date of their application submission:

• Submitted between March 31 and August 1 of an even year�$340 fee
• Submitted between September 1 in an even year and February 28 of an odd year�$255 fee
• Submitted between March 1 and August 31 of an odd year�$170 fee
• Submitted between September 1 in an odd year and February 28 of an even year�$85 or $425 fee (Those renewing within six months of license expiration can choose to pay a prorated fee for the rest of the license term plus the rest of the next licensing term.)

The process server exam is 30 questions, and applicants must answer at least 21 questions correctly. If the applicant fails the exam more than twice, they must reapply for licensure and pay the $75 fee again. The DAC has compiled a list of FAQs about the exam for NYC process servers with information about registration, preparation, and other important details. Their page for process server licensing contains more details about applying online or in person.

Agencies applying for a New York City process server license can also apply online or in person with a Basic License Application. They are required to provide much of the same information as individual applicants, and need to make sure they have obtained any business certificates applicable to their business’s structure. They must also submit a Process Serving Agency Compliance Plan Affirmation. Visit the DCA’s process server agency licensing page for more detailed information.

Why do NYC process servers need a surety bond?

The $10,000 New York City process server surety bond is required as a promise from servers to their clients that they will follow all regulations as written in the NYC Administrative Code. If there is an instance in which a client suffers financial damage as a result of the process server’s unlawful actions, the bond gives the client a way to seek compensation.

Process server agencies need a $100,000 surety bond to guarantee their compliance with the same regulations. They assign or distribute process to individual servers, meaning they work with many process servers, hence the higher bond coverage amount. Their surety bond provides the same means for recourse as the individual process server bond.

Individual New York City process servers can also file a Process Server Individual Trust form with two proof of bond denials if they’re unable to obtain a surety bond. If they serve process only as an agency employee, individuals can file an Employee Bond Exemption form. Agencies must always obtain the $100,000 surety bond.

Ready to become a licensed New York City process server? Single Source Insurance can help you or your agency get bonded today!

Since 2009, the state of New York has adopted and re-adopted emergency regulations for the governance of mortgage loan servicers. The re-adopted rules require New York mortgage loan servicers to get a surety bond before becoming licensed.

Licensing for NY Mortgage Loan Servicers

The�Department of Financial Services (DFS) first adopted emergency regulations for New York mortgage loan servicers in 2009. The regulations—adopted on July 23, 2017—can be viewed in their entirety on the DFS website.

As in many other states, New York mortgage loan servicers’�applications are submitted through the Nationwide Multistate Licensing System (NMLS). Mortgage loan servicers must pay the following nonrefundable fees:

• $3,000 investigation fee
• $102.25 fingerprint processing fee per control person
• $500 fee per additional branch office
• $15 credit report fee per control person
• $100 NMLS processing fee

Upon initial application, New York mortgage loan servicers can apply for only two branch locations. Once received, complete applications are published in the DFS’s Weekly Bulletin, and those who submitted incomplete applications are notified in writing. Applicants must submit the missing information within 30 days, or their application is considered withdrawn. If a would-be servicer’s application is withdrawn, the applicant must submit a new application.

Mortgage loan servicers must provide a written statement promising to maintain a minimum adjusted new worth of $250 million plus one-quarter of one percent of the outstanding principal balance of aggregate mortgages serviced. The letter must be signed by a designated officer. Applicants are required to have errors & omissions insurance coverage of at least $300,000, and post a fidelity bond of at least $300,000 (in addition to the $250,000 surety bond).

The NMLS’s New York mortgage loan servicer application checklist contains a full list of information required for licensure—read it thoroughly before sending in your application. Don’t purchase the $250,000 surety bond until your application is approved.

What does this bond do?

New York mortgage loan servicer applicants are not required to purchase a surety bond until the application is approved. If a servicer were to become insolvent, go bankrupt, liquidate, or lose licensure, the surety bond would provide consumers a means of seeking reimbursement for fees and undisbursed payments. The bond would also pay any costs owed to the DFS after business closure or loss of licensure.

The surety bond must be at least $250,000 but the Superintendent of the DFS can require it to be double that�$500,000�at his or her discretion. A history of consumer complaints against a servicer can result in the surety bond increase. The DFS provides a bond form for applicants’ surety companies to use.

The $300,000 fidelity bond serves as protection against fraud, embezzlement, forgery, and similar employee theft�revisit our post on fidelity bonds vs. surety bonds to brush up on their differences.

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New York City carwash owners will now have to purchase the same amount of surety bond coverage regardless of if their employees are unionized. Judge Alvin Hellerstein, a federal judge in Manhattan, stopped the implementation of the Car Wash Accountability Act earlier this year and has now modified the law, allowing it to go into effect.

Judge Hellerstein struck down the Car Wash Accountability Act, passed in 2015, because of two different surety bond mandates for New York City carwash owners. The Act required a $150,000 surety bond for carwashes whose employees did not belong to a union, while unionized carwashes only needed a $30,000 surety bond. Hellerstein ruled the law unconstitutional because it encouraged membership in a union, “‘thereby impermissibly intrud[ing] on the labor-management bargaining process.'� The law never went into effect and would have been struck down completely, but the city of New York appealed Hellerstein’s decision.

Hellerstein agreed to allow the Car Wash Accountability Act go into effect if the surety bond mandate was changed,to require all New York City carwash owners to obtain a $150,000 bond.�The bond required is a wage bond, meaning it protects carwash employees from wage theft, dangerous working conditions, or other illegal actions by their employer. If the carwash were to close unexpectedly and employees were owed wages, the surety bond provides a way to seek backpay. The bond protects against the longstanding issue of wage theft in New York City carwashes; Retail, Wholesale, and Department Store Union President Stuart Appelbaum referred to it as “endemic.â€�

The Act also contains licensing procedures for New York City carwash owners that have taken effect with Judge Hellerstein’s ruling. Carwash licensee applicants submit information to the New York City Department of Consumer Affairs (DCA). Some of that information includes:

• $550 fee per business location
• Applicant’s name and address
• Corporate structure and ownership
• Proof of workers’ compensation, unemployment, and disability insurance coverage
• Liability insurance coverage

New York carwash licensee applicants must include signed written statements certifying their compliance with several laws:

• �New York City Plumbing Code section 1003
• NYC Administrative Code section 24-334
• Surety bond requirement
• Certification that there are no judgments or warrants against the applicant for the violation of Chapter 2 of Title 20 of the NYC Administrative Code

New York City carwash licenses are valid for two years. The Car Wash Accountability Act details several more laws pertaining to licensure, including the records that must be kept by licensees. Read the law in its entirety and contact the New York City DCA with questions about carwash licenses.

Ready to get a New York surety bond? Single Source Insurance is here to help!

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Wholesale fish buyers and limited fish sellers in Washington will need to increase their surety bond per the passage of HB 1597. The new law takes effect on January 1, 2018—keep reading to see what other changes the bill will bring.

HB 1597 is Washington’s effort to ease the financial burden on the commercial fishing industry because of its “benefit to the state as a whole, but particularly to coastal communities.”�The bill amends and adds several terms to define persons in the commercial fishing industry:

• “Anadromous game fish buyer” and its definition is removed from the Revised Code of Washington (RCW)
• “Fish buyer” and its definition are removed from the RCW
• “Fish broker” is redefined to mean “a person who facilitates the sale or purchase of raw or frozen fish or shellfish on a fee or commission basis, without assuming title to the fish or shellfish”
• “Fish dealer” is a person who engages in activities that would require a fish dealer license per RCW 77.65.280 (as revised in Section 29 of the bill)
• “Limited fish sellerâ€� is a licensed commercial fisherman who sells to someone other than a wholesale fish buyer, triggering the requirement to become a limited fish seller per RCW 77.65.510 (as revised in Section 41 of the bill)
• “Wholesale fish dealer” is replaced with “wholesale fish buyer” and amended to mean a person engaged in fish buying or selling activity that will require a wholesale fish buyers’ license per RCW 77.65.340, as revised in Section 33 of HB 1597

The changes to the circumstances under which wholesale fish buyers’, limited fish sellers’, and fish dealers’ licenses (also called endorsements) are required are detailed in HB 1597. Wholesale fish buyers must be licensed in order to:

• Take first possession of fish or shellfish directly from a commercial fisherman in Washington
• Take first possession of fish or shellfish from interstate or foreign commerce
• To engage in wholesale buying or selling of fish or shellfish harvested by Indian fishermen

Their licensing fees have increased�resident wholesale fish buyers must pay a $245 endorsement fee, up from $95. Nonresident wholesale fish buyers must now pay a $320 fee. The application fee for both remains at $105.

Limited fish sellers are licensed or endorsed to sell commercially harvested fish to customers at retail. It can be issued as an addition to any commercial fishing license. Limited fish sellers must follow food safety standards when selling fish. The fee for a limited fish seller endorsement is set at $70 for residents and $140 for nonresidents. Commercial fishing license holders must be endorsed as a limited fish seller or a wholesale fish buyer in order to sell to anyone other than licensed wholesale fish buyers.

Both wholesale fish buyers and limited fish sellers need a surety bond�previously only buyers (formerly called dealers) needed the bond. Wholesale fish buyers must now post a $2,000 surety bond, up from $1,000. Limited fish sellers are mandated to post a $1,000 surety bond. The Washington Department of Fish & Wildlife can increase the surety bond amount if the buyers or sellers have previously violated rules for the accounting of commercial harvesting. The bond is in place to ensure that buyers and sellers pay all fees required by the state, as well as adhering to state rules for the accounting of commercially harvested fish and shellfish.

Ready to get a Washington surety bond? Get in touch with Single Source Insurance today!

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Public land lessees in Minnesota may need a surety bond following SF 1124‘s passage in May. The bill was passed on May 12 and took effect on May 13, 2017.

The Minnesota Department of Natural Resources (DNR) can issue permits or leases allowing the permitted party to use state-owned land “for any purpose which that in the commissioner’s opinion is not inconsistent with the maintenance and management of the forest lands, on forestry principles for timber production.â€� This means the commissioner of the DNR can allow individuals to use public forests, via lease or permit, for purposes the Commissioner deems in accordance with the DNR’s mission. The length of the lease or permit cannot be longer than 21 years without the approval of the Executive Council.

Those issued a permit or lease to use state land may be required by the commissioner of the DNR to purchase a performance surety bond for removing anything left on the land by public land lessees or permit holders after their lease or permit expires or is canceled or revoked. If the lessee or permit holder does not leave any personal property behind, the state would not have a reason to make a claim on the performance bond.

Current law mandates that while state land is leased, public access to the land will not change. Current law also states that the approval of the Commissioner of the Department of Administration is not required to grant a lease or permit.

In addition to adding a surety bond provision for public land lessees, SF 1124 introduces regulations for the public and private sale of tax-forfeited lands in several Minnesota counties.

Ready to get bonded in Minnesota? Get in touch with Single Source Insurance today!

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Minnesota postsecondary institutions will see changes in the surety bond they are required to obtain. SF 943 is a bill relating to higher education in the state with a provision about postsecondary and private career schools. The bill takes effect on September 1, 2017.

Under previous law, “any registered institution” (meaning postsecondary institutions registered with the state of Minnesota’s Office of Higher Education) must provide a surety bond if the institution fell below minimum financial standards necessary for the school to continue participating in Title IV. Students at Title IV schools are eligible to receive federal student aid, like grants and loans. The surety bond could be no less than $10,000 and no more than $250,000, as mandated by the U.S. Department of Education.

SF 943 adds onto this section of the law, mandating that new schools that have been given conditional approval for degrees so they can apply for accreditation must also obtain a surety bond if the school doesn’t meet minimum financial standards for Title IV participation. SF 943 also gives schools the option of submitting an irrevocable letter of credit to the Commissioner of Management and Budget in lieu of the bond.

SF 943 mandates that if a postsecondary institution closes, the school’s surety bond “must first be used to destroy any private educational data under section 13.32 left at a physical campus in Minnesota after all other governmental agencies have recovered or retrieved records under their record retention policies.” Remaining funds are to be used for tuition reimbursement, giving refund priority in the following order:

1. Cash payments made by or on behalf of a student
2. Private student loans
3. Veteran Administration benefits not already reimbursed by the VA

Additional funds left over after record destruction and tuition reimbursement can be used to recoup administrative costs incurred as a result of the school’s closure.

Postsecondary institutions are required to post a no more than $20,000 surety bond if they do not have a binding agreement with the Office of Higher Education for student record preservation. SF 943 allows schools to provide an irrevocable letter of credit instead, to be used for destruction of academic records if the school closes.

Private career schools are defined as postsecondary institutions offering less programs that are less than an associate degree level and not considered private institutions under the Minnesota Private and Out-of-State Public Postsecondary Education Act. Private career schools are already required to post a surety bond that is between $10,000 and $250,000 to guarantee their contracts with students. The bond amount is calculated based on ten percent of the previous year’s net income (previously, the amount was based on gross income). SF 943 eliminates the $250,000 surety bond cap.

Need a Minnesota surety bond? Single Source Insurance can get you the best rate for your bond—get in touch today.

Pharmacies entering into a contract with Express Scripts now need to post a $500,000 surety bond. Express Scripts is a pharmacy benefits management company providing services like home prescription delivery, claims processing, and other pharmacy services.

Express Scripts is requiring pharmacies to obtain a performance bond, a type of surety bond that guarantees that the principal (the pharmacy) will uphold the terms of their contract.�The surety bond is required of pharmacies for the first two years of their contract, though Express Scripts might sometimes require bond coverage for a longer period of time.�Pharmacies entering into contracts with Express Scripts should ensure that they are familiar with the terms of their contract to avoid having claims made on their bond.

Ready to apply for a surety bond or have more questions about this new bond? Get in touch with Single Source Insurance today.

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So you’ve heard of surety bonds and fidelity bonds, and after reading What is a Surety Bond, Anyway? you’re a surety bond expert. Time to brush up on fidelity bonds.

Recap: Surety Bonds

Before diving into fidelity bonds, here’s a quick refresher on surety bonds:

A surety bond is an agreement between three parties:

• The principal, the person buying the bond
• The obligee, the entity requiring the purchase of the bond
• The surety, the company providing financial backing for the bond

Surety bonds are the principal’s guarantee that they will uphold the terms of their bond. The bond provides customers a way to seek reimbursement if the principal causes them financial damage.

What are fidelity bonds?

Fidelity bonds are more like insurance, because they protect the bondholder from any dishonest or fraudulent actions by certain people, usually the company’s employees. For this reason, fidelity bonds are sometimes called dishonesty bonds.

Usually the person who the bond protects against are those who handle company finances, like an accountant or employees who handle customer transactions. If an employee commits fraud, whether by outright stealing money or merchandise or by embezzling, the fidelity bond offers the bondholder a way to recoup their losses. These bonds are especially useful when employee theft is not covered by the bondholder’s existing insurance policies.�Choosing to purchase a fidelity bond gives your business added protection against employees who intend to do harm to you and your business.

Fidelity bonds can be easily confused with business service or janitorial service bonds—Florida and Alabama are just examples; you can get these bonds in any state. These bonds protect clients from employee theft in professions where employees visit clients’ homes, like housekeeping services or pest control. They function like other surety bonds, as a means of security for customers. It’s important to remember that fidelity bonds are for you and your business’s protection.

Think you might need a fidelity bond or other surety bond? Single Source Insurance can help you get bonded today!