Blog Posts Categorized: General - Page 17

In Mississippi, daily fantasy sports operators became subject to new laws in July 2017. Senate Bill 2541 created the Fantasy Contest Act and was set to expire on July 1, 2017. State lawmakers were expected to pass permanent legislation before that date—which they did on March 13, 2017, when Gov. Bryant signed House Bill 967 into law. Among other things, the law requires a surety bond from DFS operators in the state.

Understanding State-Specific Surety Bond Requirements

SB 2541 appointed a task force to create a legal framework for daily fantasy sports to operate in the state of Mississippi. The industry is regulated by the Mississippi Gaming Commission (MGC). This bill allowed DFS companies to operating legally until regulations were put in place for the industry.

Those permanent regulations were implemented with HB 967’s passage and July 1, 2017 effective date. This bill created procedures for the registration and taxation of daily fantasy sports in Mississippi.�DFS operator applicants�need to register with the MGC and provide information that includes the following:

• Business name and contact information (phone numbers, physical and mailing addresses, etc.)
• Tax ID number
• Business type (partnership, LLC, etc.)
• Names and addresses of all partners, owners, directors, and stockholders
• List of executive employees with their addresses and job titles
• DFS contest operator’s personal information, including among other things, name, date of birth, social security number, home address, and distinguishing marks or tattoos
• Recent photograph of operator applicant
• Surety bond to protect players’ funds

Daily fantasy sports operator applicants must disclose their finances in depth when registering�including listing all assets�bank accounts, business investments, real estate holdings, stocks and bonds�belonging to the operator and their spouse and dependents (if applicable). Applicants must also list all debts owed to them and/or their spouse and dependents, as well as all debts owed by any of those individuals.

Along with a completed application, DFS operators pay a nonrefundable $5,000 fee to the MGC for their three-year license term. Applicants must submit their registration application through the mail addressed to the Mississippi Gaming Commission, Attn: Paul Waldorp. If you’re submitting with USPS, use this address:

P.O. Box 23577 Jackson, MS 39225

Those submitting with FedEx or UPS should use a different address:

620 North St., Suite 200 Jackson, MS 39202

DFS surety bond

Both SB 2541 and HB 967 stipulate that financial assurance is required of daily fantasy sports operators to secure players’ funds. Bond coverage amount will vary depending on the applicant, since it needs to cover the total account balances of all players. For DFS companies with a large number of users, like DraftKings or FanDuel, this can mean a big surety bond.

The bond is in place so that players don’t lose the money in their accounts on the sites. Should the company go under and a player lose the money in their account, the player can file a claim against the surety bond to recover that money. DFS companies are motivated to prevent that from happening, since they have to repay the surety for any claims that are paid out.

Daily fantasy sports operators have the option of maintaining a combination of surety bonds, cash or cash equivalents, an irrevocable letter of credit, and payment processor reserves and receivables as proof of financial security.

Ready to get a surety bond in Mississippi? Get started with Single Source Insurance!��

Louisiana proprietary schools are private businesses offering vocational or occupational courses, and students do not receive academic degrees. These schools need to be licensed and bonded to operate legally.

The state of Louisiana’s Board of Regents regulates proprietary schools and issues their licenses. Anyone who represents the school, also called solicitors, agents, or recruiters, also needs to be licensed by the Board. While proprietary schools can’t issue academic degrees, they can award certificates or diplomas. Proprietary schools accredited by a federally recognized accreditation body can offer Associate in Occupational Studies degrees.

Applicants for a proprietary school license need to submit all the information listed on the Board’s checklist, including:

• Completed application form PSC-1
• Notarized commitment statement, form PSC-2
• Appropriate documentation from the Secretary of State validating business’s legal structure
• Current audited financial sheet prepared by a licensed CPA
• List of equipment available for use in classes
• Copies of enrollment agreements and refund policies approved by the Proprietary Schools Commission
• Copies of all advertising materials and diplomas or certificates
• School catalog
• $10,000 surety bond for Certificate of Registration, form PSC-3
• Blanket surety bond for all solicitors, or individual solicitor bonds
• $2,000 license fee
• $100 fee per solicitor
• Outline and fee schedule for each course of study

This is not a complete list�the Board’s website contains all the information you need to submit, including application and bond forms. Applications must be submitted at least 60 days prior to the next scheduled Board meeting, which they list on their website.

Louisiana proprietary schools need a $10,000 surety bond as protection for their students. Should the school close before students complete their course of study, resulting in losses of tuition and fees, they can file a claim against the surety bond to recover those losses. Similarly, school recruiters need a bond of $1,000—or a blanket bond covering all the school’s solicitors—to protect students should the recruiter misrepresent the school or the credentials it offers consumers. If a proprietary schools opts for a blanket bond, each recruiter needs $1,000 of coverage—five recruiters means a $5,000 bond is required.

See the Board of Regents’ website to get familiar with laws for proprietary schools and solicitors to ensure you don’t engage in any practices that may result in a claim against your surety bond.

Ready to get bonded in Louisiana? Single Source Insurance can help!�

Photo by�Mikael Kristenson on Unsplash

In Alabama, auctioneers are licensed and bonded through the State Board of Auctioneers. Keep reading to find out how to get a license and bond.

Alabama auctioneer licensing

Alabama auctioneers begin by serving as apprentices to an auctioneer who has been licensed for at least two years, and they serve as apprentices for one or two years. They then apply for a resident auctioneer’s license. Applicants can also be licensed in Alabama as non-resident, non-reciprocal auctioneers or as reciprocal auctioneers, meaning they are already licensed in another state.

All applicants submit some of the same information to the Board, including apprentices:

• ASBA Form 1�Statement to the Board
• ASBA Form 2�General Information
• ASBA Form 3�Qualifying Questionnaire
• ASBA Form 4�Affidavit of Endorsement (two)
• Proof of Citizenship
• Request for criminal history records plus $20 fee
• $10,000 surety bond and power of attorney

Applicants who completed a one-year apprenticeship need to include proof of five auctions and an auction school diploma, while those who completed a two-year apprenticeship need proof of ten auctions, in the form of ads or canceled checks.�The license fee for resident and non-resident Alabama auctioneers is $200, and apprentice applicants pay $100. Neither the surety bond nor the license fee need be submitted until after the applicant has passed the license exam, which includes a $100 fee.

In addition to the listed information, apprentice applicants need their sponsoring auctioneer’s affidavits on ASBA Forms 6A and 6B. Resident auctioneer applicants need proof of their apprenticeship and a letter of recommendation from a sponsor. Reciprocal auctioneers pay a license fee based on the state their license is coming from, and they need to submit proof of residence in their home state and complete ASBA Form 7. Reciprocal licensees do not need to take the exam. Non-resident, non-reciprocal applicants reside in states that don’t participate in license reciprocity with Alabama, and they pay an additional processing fee of $50 and complete ASBA Form 7.

The Alabama auctioneer surety bond is licensees’ promise to follow the provisions of the Auctioneer License Act. The bond protects consumers from financial loss as a result of an auctioneer’s illegal practices, and protects the state from liability in the same case. Claims paid out from a surety bond must be reimbursed in full by the bondholder, up to the bond’s full amount.

Alabama auctioneers’ licenses need to be renewed annually and include a $200 renewal fee, or $150 for apprenticeship licenses. The information above is not exhaustive and Alabama auctioneer applicants should consult the Board’s website and FAQs.

Ready to get an auctioneer’s surety bond? Get in touch with Single Source Insurance and get started!�

Looking to open a health club in Tennessee? Health clubs operating in the state need to be registered and bonded�keep reading to find out how it works.

Health clubs, as Tennessee defines them, are clubs offering exercise and athletic equipment per the terms of an agreement between the club and consumer—a gym. Every agreement has to follow the state’s rules for a valid agreement:

• In writing
• Signed by the buyer
• Dated with correct date of signature
• Buyer’s right to cancel statement as worded in Tennessee Code Annotated��47-18-305
• No more than 36 months in length

Some health clubs can be exempt from registration with the Tennessee Department of Commerce and Insurance if they have maintained sufficient registration for at least five years prior to July 1, 2015; those years can be consecutive or not, as long as there were gaps of no more than five years between registrations.

Tennessee health clubs need to get a $25,000 surety bond for each business location they maintain in the state. The surety bond provides consumer protection: should the gym go out of business or charge clients after cancellation or when the gym is unavailable, clients can file a claim against the bond. Violating other provisions of the health club law is classified a Class A misdemeanor in Tennessee, punishable by no more than a year in jail and fines of up to $2,500 per violation.

Surety bonds need to be maintained for two years after a health club closes. Gyms can be exempt from the surety bond requirement if the business has been under the same ownership for at least seven consecutive years. Health clubs can also be exempt if they file an audited financial statement showing a net worth of at least $10,000,000.

See recent amendments to the Tennessee health club law here. Ready to get a surety bond? Get in touch with Single Source Insurance today!�

Oregon collection agencies need to get a license and a surety bond to do business in the state. Keep reading to find out how to get licensed and bonded.

Oregon collection agency license

An ever-increasing number of financial professions are submitting license applications through the Nationwide Multistate Licensing System (NMLS), including Oregon collection agencies. Collection agencies are defined as those that collect third-party debts, collect on debts for their own company, or repossess vehicles in the state. They register with the Oregon Division of Financial Regulation. New agency applicants need to provide the Division with the following information, fees and documents:

• $350 application fee
• $15 credit report fee per control person
• Completed form MU1
• Surety bond in the required amount
• Other trade name or DBA for business (if applicable) along with proof of registration with theSecretary of State
• Registered agent and primary contact employee(s)
• Disclosure questions, form MU2
• Business plan
• State-issued Certificate of Authority/Good Standing
• Formation documents for business entity: corporation, LLC, partnership, etc.

See the NMLS checklist for a complete list of materials the Division needs from collection agency applicants. Registrations expire annually on December 31 and renewals require a $120 fee.

Collection agencies need to register branch locations if they are located outside the state and conduct business in Oregon, unless the agency gets a waiver from the state.

Getting a surety bond

Oregon collection agencies’ surety bond requirement is their promise to abide by the provisions of Oregon Administrative Rules Chapter 441, Division 810 and Oregon Revised Statutes�Chapter 697. Agencies based in the state need a $10,000 surety bond. Out-of-state agencies that do not qualify for the waiver need to add $5,000 to that amount and obtain a $15,000 surety bond.

Should a collection agency’s fraudulent or unlawful practices cause financial damages to a consumer, the consumer can file a claim against the surety bond to recover those damages. If the claim is valid, the consumer can be awarded the amount of their claim, which the surety pays out initially. The bondholder�the collection agency�is responsible for reimbursing the surety for any paid claims.

Ready to get licensed as an Oregon collection agency? Get started by getting bonded with Single Source Insurance!

Florida agricultural dealers are required to get a license and surety bond to do business in the state. The license is issued by the Florida Department of Agriculture and Consumer Services.

What do agricultural dealers do?

Agricultural dealers, or dealers in agricultural products�as the law refers to them, are individuals or business entities that purchase, receive, or solicit products from producers. Dealers also include individuals acting as agents for agricultural producers and those that negotiate sales between buyers and producers.

Agricultural products are natural products from farms, nurseries, groves, orchards, vineyards, gardens, and apiaries. Livestock, sod, horticultural products, milk products, and poultry are also included in the definition, found in Florida Statutes��604.15.

How to get licensed and bonded

Here’s some of the information the Department asks for from agricultural dealer applicants:

• Federal Employer Identification Number (FEIN)
• Business type (sole proprietorship, LLC, corporation, partnership)
• Business’s legal name and trade name
• Business contact information (address, phone number, email)
• License fee for first location + $100 for each additional location
• Surety bond
• Contact information for each partner or business owner

On the application, dealers need to specify the types of agricultural products they will be handling. Licenses are good for one year and agricultural dealers can incur a $100 penalty if they file for license renewal after its expiration.

To determine their surety bond amount, dealers use the dollar value from the month in which they bought or handled the highest volume of agricultural products in the preceding 12 months. If a dealer is submitting a new business application, they should estimate the highest volume of monthly purchases they expect to make. The surety bond amount the dealer needs is twice that amount. If new agricultural dealer applicant estimated their highest monthly purchase amount would be $15,000, the dealer would need to get a $30,000 surety bond.

Agricultural dealers’ annual license fee for the first business location is dependent on their surety bond amount:

• $5,000-$9,999 surety bond�$170 license fee
• $10,000-$14,999 surety bond�$230 license fee
• $15,000-$100,000 surety bond�$300 license fee

More questions about getting a Florida agricultural dealer’s license? See the Department’s FAQ or contact them. Ready to get the required surety bond? Call Single Source Insurance today!�