Iowa Admin. Code r. 191-103.5 - Financial security deposits
(1)
For purposes of Iowa Code section
523C.5(2)
"b" as enacted by 2019 Iowa Acts, Senate File 619, section 5,
"placing in trust with the commissioner" means filing a surety bond with the
commissioner or creating a financial or custodial account in a manner
acceptable to the commissioner.
(2)
Requirements for surety bonds.
a. A surety
bond filed with the commissioner as a financial security deposit pursuant to
Iowa Code section
523C.5(2)
"b" as enacted by 2019 Iowa Acts, Senate File 619, section 5,
shall be in the form directed by the division and as available on the
division's website .
b. A surety
bond filed with the commissioner as a financial security deposit pursuant to
Iowa Code section
523C.5(2)
"b" as enacted by 2019 Iowa Acts, Senate File 619, section 5,
shall cover service contracts still outstanding that predate the effective date
of the surety bond and any service contracts executed during the surety bond's
period of coverage except service contracts that have been rescinded or
fulfilled or that are secured by another bond.
c. No suit or action shall be commenced by a
surety bond claimant later than one year after the expiration date of the
surety bond.
d. The surety bond
shall, in the event of the service company's failure to perform under the
service contract or otherwise, either reimburse or pay on behalf of the service
company any covered amounts that the service company is legally obligated to
pay under the service contract.
e.
The surety bond is for the benefit of and subject to recovery by any Iowa
service contract holder sustaining actionable injury due to the failure of the
service company to perform its obligations under a service contract. A holder
of a service contract issued in this state may, in the event of nonperformance
of the contract by the service company, maintain an action and file a claim
against the surety bond filed. The surety's liability shall extend to all
service contracts issued by the service company and outstanding in this state,
provided, however, that the surety's aggregate liability shall not exceed the
penal sum of the bond.
f. The
surety bond cannot be canceled by the surety except upon written notice of
cancellation by the surety to the commissioner by certified mail, and not prior
to the expiration of 60 days after receipt of the notice by the
commissioner.
g. A service company
shall maintain an adequate surety bond and shall continuously monitor the
surety amount to assure its adequacy.
Notes
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