Surety Bond Insights: Key Articles for January 2018January 2018

Washington investment advisers need to register and get a surety bond before offering financial services to the public. Find out how to get registered and why a bond is required.

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Washington investment advisers offer portfolio management and financial planning services to the public. The state requires advisers and their representatives to register�keep reading to learn how the process works.

Financial adviser registration

Washington investment advisers and representatives�register with the Securities Division of the state’s Department of Financial Institutions. Adviser applicants submit parts of their registration application online through the Investment Adviser Registration Depository (IARD), and part on paper with the Securities Division. Applicants begin by setting up their IARD account and paying the necessary fees for registering as an adviser and/or a representative. They must also submit forms ADV Part 1, ADV Part 2, and U4 (if a representative is being registered).

Documentation financial adviser applicants need to submit to the Division includes:

• Balance sheet from the past 90 days
• Proof of compliance with minimum net worth requirements, which might include a surety bond
• Proposed client contract
• LLC agreement, if applicable

This is not a full list of required documentation; thoroughly read the list to make sure your registration application is complete. Washington investment advisers applying as sole proprietors must submit proof that they have passed a qualifying exam in the previous two years, proof of registration in another state in the past two years, or proof of holding special designations (for example, a Certified Financial Planner). This documentation is submitted to the Securities Division via email, fax at (360) 704-7029, or mail:

For overnight delivery Department of Financial Institutions
Division of Consumer Services
150 Israel Rd SW
Tumwater, WA 98501

Regular mail

PO Box 41200
Olympia, WA 98504-1200

Adviser and representative registrations need to be renewed annually, and fees and forms have different due dates, so stay on top of your renewal�renewal season begins in November.

Investment adviser surety bond?

Washington investment advisers are required to maintain a minimum net worth. If they have custody of their clients’ funds or securities, they need a $35,000 minimum net worth, and if they do not have custody of any funds, a $10,000 net worth. If the applicant does not meet the minimum net worth amounts, they can supplement with a surety bond. The bond must be the amount of the net worth deficiency rounded to the nearest $5,000. So, if an applicant was $7,000 short, they would need a $10,000 surety bond.

Ready to get bonded as a Washington financial adviser? Get in touch with Single Source Insurance today!�

Owners of venomous reptiles and Class I wildlife in Florida need to apply for a permit and get a surety bond to legally own the animals. Keep reading to find out what legal ownership entails.

What animals require permits for ownership?

Venomous reptiles and Class I wildlife cannot be owned or exhibited if the owner doesn’t have a permit and a surety bond from the Florida Fish and Wildlife Conservation Commission. The native venomous reptile list includes:

• Coral snake
• Eastern diamondback rattlesnake
• Canebrake rattlesnake
• Pygmy rattlesnake
• Cottonmouth
• Copperhead

Owners of conditional reptiles also need this permit, but they can no longer be acquired for personal possession. If you were properly licensed and owned the animal before July 1, 2010, you can own it as long as you continue to be licensed.

Class I wildlife are animals that are dangerous to humans, and the state no longer allows personal acquisition of them. Owners must have had possession of their animals before August 1, 1980, or before August 27, 2009 if the animal is a cougar, panther, or cheetah. Some other Class I animals include baboons, bears, chimpanzees, jaguars, leopards, gorillas, lions, tigers, and orangutans.

If you own any venomous reptiles or Class I wildlife in Florida, there are strict laws about acreage and caging to protect the public from being harmed by the animals. When applying for a permit, owners need to prepare a Captive Wildlife Incident-Disaster Plan (CIPD) detailing how the animals would be captured and secured in the event of an emergency or natural disaster.

Venomous reptile permits cost $100 and require owners to get a $10,000 surety bond. Class I wildlife permits are $150 for less than 25 animals, and $250 for 26 or more, and owners also need a $10,000 bond.

Why is this bond needed?

The venomous reptiles and Class I wildlife surety bonds protect the public from harm by dangerous animals. The bonds are animal owners’ promises to follow all Florida laws about caging, acreage, licensing, and any other ownership rules. Should a member of the public suffer harm from one of the animals, they can file a claim against the surety bond to seek reimbursement.

More questions about captive wildlife permits in Florida? Get in touch with the Division of Law Enforcement, Investigations Section at (850) 488-6253.

Ready to get bonded? Call Single Source Insurance at 1 (855) 689-5106 for a free quote!

On the Single Source Insurance blog, we’ve talked about the factors that determine the cost of your surety bond. Today, we’ll talk about what you can do to make sure you get the best price for your bond.

1. Maintain a good credit score. An underwritten surety bond’s premium will vary depending on your financial history. A good credit score shows that you are a reliable borrower, and the surety company takes on less risk when principals have a strong financial history. If you are considering getting a business license that requires a bond, but your credit score is low, consider strengthening it before applying for the license.
2. Shop around. Get more than quote to find the lowest priced bond. Single Source Insurance can work with you to get the lowest premiums available!
3. Have a realistic idea of the cost of your bond.�If you need a $100,000 surety bond, your premium will be much higher than if you needed a $10,00 bond. If your credit is low, your bond premium will be higher than if you had a high score. You can get a free quote from Single Source Insurance, so you have nothing to lose by applying and finding out what the bond will cost you.
4. Keep your bond claim-free.�As long as you don’t break any of the terms of your bond, there’s no reason for any claims to be made against it. Before purchasing your surety bond, talk to an Single Source Insurance specialist to ensure you understand the terms. Make sure your premium is paid when it’s due and that your bond is current.
5. Have relevant industry experience.�If you’re experienced in your field, there’s always a chance you can get a lower bond premium. Again, talking to your surety company is the best option to figure out your options.

Still have questions about getting a lower bond premium? Single Source Insurance is here to help�give us a call and get a fast, free quote today!

Getting licensed and bonded as a Michigan professional investigator is easier than you think�keep reading for a quick walkthrough of the process.

Professional investigator license and surety bond

The professional investigator license is issued by the Michigan Department of Licensing and Regulatory Affairs (LARA). Investigators have to meet many requirements in order to be eligible for licensure and to legally do business:

• U.S. citizen
• At least 25 years old
• High school diploma or equivalent
• Has never been convicted of a felony or a misdemeanor involving weapons, assault, fraud, controlled substances, or alcohol more than once
• Must have three years’ related experience
• Has not been dishonorably discharged from the U.S. military
• Obtain a $10,000 surety bond
• Five notarized reference statements from persons unrelated to the applicant and who have known the applicant for at least five years
• Copy of certificate of incorporation, if applicable
• Names of all officers, members, or partners, if applicable

First-time applicants should be sure to thoroughly read the application and include all required information. Professional investigator licenses are valid for three years. The initial licensing fee is $750, and renewal is $300. Relicensure if the license is allowed to expire is $750. If an investigator is applying for, renewing or relicensing a branch office license, the fee is $125.

Why do investigators need this bond?

Michigan investigators need the $10,000 surety bond to guarantee their compliance with the Professional Investigator Licensure Act. They promise to be properly licensed and not act outside the scope of their license. If a person suffers damages from a “willful, malicious and wrongful act� by the bondholder, the person can file a claim on the bond to seek reimbursement.

The bond protects the state from liability and the public from financial damages. The principal�the investigator�is the person liable for their unlawful actions. Should a claim be paid from the bond, the investigator must reimburse the surety for the claim amount.

Ready to get the licensing process started? Get in touch with Single Source Insurance today!

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Minnesota grain buyers and grain storage warehouses or elevators need licenses and surety bonds. HF 2717, introduced in the 2017 legislative session, might increase the required bond for grain buyers.

Getting licensed and bonded

Grain buyers and storage elevators apply for licensure through the Minnesota Department of Agriculture. A grain buyer is anyone buying grain for the purpose of reselling it or products made from it. Storage elevators store grain for the public, and they are required to apply for a buyer’s license as well. Each business location needs its own license.

Here’s some of the information grain buyers will need to provide on the application:

• Minnesota tax ID number or social security number
• Legal name and mailing address
• Workers’ compensation information, if applicable
• List of licensed locations
• Inform whether or not grain will be purchased on credit
• Surety bond ranging from $10,000 to $150,000
• License fee ranging from $110-$700

The license fee is calculated based on the buyer’s gross annual grain purchases (GAGP)�a chart is included on the application to help you determine your fee amount. The surety bond amount is also based on GAGP:

• GAGP of $100,000 or less�$10,000 bond
• GAGP $150,000-$750,000�$20,000 bond
• GAGP $750,000-$1,500,000�$30,000 bond
• GAGP�$1,500,000-$3,000,000�$40,000 bond
• GAGP�$3,000,000-$6,000,000�$50,000 bond
• GAGP�$6,000,000-$12,000,000�$70,000 bond
• GAGP $12,000,000-$24,000,000�$125,000 bond
• GAGP exceeding $24,000,000�$150,000 bond

First-time grain buyer licensees and grain storage warehouses need a $50,000 surety bond. The grain storage application asks for much of the same information as the buyer application. But, they also need to inform the Department of the grain storage rates, have additional insurance, and pay a warehouse exam fee based on the facility’s bushel capacity.�The license period runs from July 1-June 30 and it must be renewed annually.

Possible surety bond increase for grain buyers

Some Minnesota grain buyers might see a bond increase if HF 2717 becomes law in the coming year. The bill is being reviewed by the House Agriculture Policy Committee. Since it might be voted on in this year’s legislative session, grain buyer licensees should keep HF 2717 on their radar—bond amounts won’t change for buyers under a GAGP of $3,000,000. These are the proposed bond amounts:

• GAGP�$3,000,000-$6,000,000�$300,000 bond
• GAGP�$6,000,000-$12,000,000�$400,000 bond
• GAGP $12,000,000-$24,000,000�$500,000 bond
• GAGP exceeding $24,000,000�$600,000 bond

Contact the Department about grain buyer and storage warehouse licenses and bonds at (651) 201-6011. If you’re ready to get a surety bond, get in touch with Single Source Insurance today!