25 Pa. Code § 78a.304 - Terms and conditions for surety bonds
(a) The bond of a surety company that has
failed, refused or unduly delayed to pay, in full, on a forfeited surety bond
is not approvable.
(b) Only the
bond of a surety authorized to do business in this Commonwealth is approvable.
If the principal place of business of the surety is outside of this
Commonwealth, or if the surety is not a Pennsylvania corporation, the surety
bond shall also be signed by an authorized resident agency of the surety that
maintains an office in this Commonwealth.
(c) The surety may cancel the bond by filing
written notice of cancellation with the Department, the operator and the
principal on the bond, only under the following conditions:
(1) The notice of cancellation shall be sent
by certified mail, return receipt requested. Cancellation may not take effect
until 120 days after receipt of the notice of cancellation by the Department,
the operator and the principal on the bond as evidenced by return
receipts.
(2) Within 30 days after
receipt of a notice of cancellation, the operator shall provide the Department
with a replacement bond under §
78a.310 (relating to replacement
of existing bond).
(d)
The Department will not accept surety bonds from a surety company when the
total bond liability to the Department on the bonds filed by the operator, the
principal and related parties exceeds the surety company's single risk limit as
provided by The Insurance Company Law of 1921 (40 P.S. §§
341-991.2610).
(e) The bond must provide that the surety and
the principal shall be jointly and severally liable for payment of the bond
amount.
(f) The bond must provide
that the amount shall be confessed to judgment and execution upon
forfeiture.
(g) The Department will
retain, during the term of the bond, and upon forfeiture of the bond, a
property interest in the surety's guarantee of payment under the bond which is
not affected by the bankruptcy, insolvency or other financial incapacity of the
operator or principal on the bond.
(h) The surety shall give written notice to
the Department, if permissible under law, to the principal and the Department
within 10 days of a notice received or action filed by or with a regulatory
agency or court having jurisdiction over the surety alleging one of the
following:
(1) The insolvency or bankruptcy of
the surety.
(2) A violation of
regulatory requirements applicable to the surety, when as a result of the
violation, suspension or revocation of the surety's license to do business in
this Commonwealth or another state is under consideration by a regulatory
agency.
Notes
This section cited in 25 Pa. Code § 78a.303 (relating to form, terms and conditions of the bond).
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