Editorial Note on Subchapter A of Chapter II
Editorial Note: Nomenclature changes to subchapter A appear at 78 FR 60697, Oct. 2, 2013.

§ 223.2 Application for certificate of authority. ( a ) *Application for issuance of certificate of authority.* Every company not currently holding a certificate of authority wishing to apply for a certificate of authority shall submit an application to Treasury, c/o Surety Bonds Program, to the location, and in the manner, specified online at *https://www.fiscal.treasury.gov/surety-bonds/ .* The company shall file the following data with Treasury, and shall transmit therewith the fee in accordance with the provisions of § 223.22: ( 1 ) Payment of the application fee in accordance with the provisions of § 223.22;
( 2 ) A written request for a certificate of authority, signed by an officer of the company. This request must indicate: ( i ) Whether the company has previously applied for a certificate of authority from Treasury and, if so, the date and disposition of the previous application; and
( ii ) Whether Treasury has ever previously issued the company a certificate of authority, the reason for termination of its certificate of authority, and the applicable dates;
( 3 ) A certified copy of its charter or articles of incorporation showing that it is duly authorized to conduct the business referenced under 31 U.S.C. 9304(a)(2) and a statement from an officer of the company certifying that: ( i ) The company is authorized to transact surety business; and
( ii ) If granted a certificate of authority, there are no restrictions upon the company preventing it from being able to execute and guarantee bonds and undertakings in judicial proceedings, and guarantee contracts to which the United States is a party;
( 4 ) A listing of the names of the company's current officers and directors as of the date of application, including a biographical affidavit of each officer and director per instructions online at *https://www.fiscal.treasury.gov/surety-bonds/*;
( 5 ) A memorandum setting forth: ( i ) A comprehensive statement of the company's method of operation, including, but not limited to, underwriting guidelines, claims adjustment procedures, reinsurance philosophy, control over collateral, and significant changes in operations or corporate structure that impact its financial statements;
( ii ) The classes of business in which it engages;
( iii ) Any special underwriting agreements, management agreements, or pooling agreements in force. Copies of such agreements must be included with the memorandum; and
( iv ) Present plans of the company as to the types of Federal bonds it intends to write, the anticipated annual premium volume of the Federal bonds, and the geographical areas in which it intends to write the Federal bonds;
( 6 ) A certified copy of a license from its state of incorporation and a completed Surety License Form (Form No. FS 2208);
( 7 ) A copy of the latest available report of its examination by its domiciliary State Insurance Department including a copy of company responses to any significant findings or recommendations;
( 8 ) The National Association of Insurance Commissioners (NAIC) annual statement form with all Schedules and Exhibits completed, including copies of the NAIC File Upload, showing the last two full calendar years of the company's financial condition, including proof that the company has paid-up capital of at least $250,000 in cash or its equivalent, in the case of a stock insurance company, or has net assets of not less than $500,000 over and above all liabilities, in the case of a mutual insurance company. The annual financial statement's Jurat Page (only) is to be signed (facsimile or electronic signatures are acceptable) by the company President, Secretary, and a Notary Public who shall also affix a notary seal;
( 9 ) The Insurance Regulatory Information System (IRIS) ratio results, and an explanation for any ratios outside the normal ranges as established by the NAIC for the last two full calendar years preceding the date of application;
( 10 ) A written statement signed by the Insurance Commissioner or other proper financial officer of any state attesting that the company maintains on deposit legal investments having a current market value of not less than $100,000 for the protection of claimants, including all of its policyholders in the U.S.;
( 11 ) A completed Treasury Schedule F (Form No. TFS 6314), as referenced in § 223.9(c) for the last two full calendar years preceding the date of application;
( 12 ) Copies of all reinsurance treaties currently in force along with a completed Summary of Reinsurance Treaties, per instructions provided online at *https://www.fiscal.treasury.gov/surety-bonds/*;
( 13 ) A completed Schedule of Excess Risks form (Form No. FS 285-A) as of the date of the application;
( 14 ) A Statement of Actuarial Opinion as of the close of the last two full calendar years preceding the date of application provided by a qualified actuary, as defined by the NAIC, on the adequacy of all loss reserves with the scope and format of the statement also conforming to the requirements of the NAIC; and
( 15 ) Such other evidence as Treasury may, in its discretion, request to establish that the company is solvent, willing, and able to meet the continuing obligation to carry out its contracts. Additionally, Treasury will publish supplemental guidance annually regarding evidence it may require, submission methods, and format of the data listed in paragraphs (a)(1) through (14) of this section.
( b ) *Applications for renewal of certificate of authority.* Every company wishing to apply for the annual renewal of its certificate of authority shall submit an application to Treasury, c/o Surety Bonds Program, to the location, and in the manner, specified online at *https://www.fiscal.treasury.gov/surety-bonds/ .* The company shall file the following data with Treasury, and shall transmit therewith the fee in accordance with the provisions of § 223.22: ( 1 ) Payment of the application fee in accordance with the provisions of § 223.22;
( 2 ) A completed Surety License Form (Form No. FS 2208) and a certified copy of the licenses from any states indicated on the Surety License Form that were not indicated on the company's most recent form;
( 3 ) A copy of the latest available report of its examination by its domiciliary State Insurance Department including a copy of company responses to any significant findings or recommendations;
( 4 ) A statement of its financial condition, as of the close of the preceding year, on the annual statement form of the NAIC with all Schedules and Exhibits completed, including copies of the NAIC File Upload, showing that it has paid-up capital of at least $250,000 in cash or its equivalent, in the case of a stock insurance company, or has net assets of not less than $500,000 over and above all liabilities, in the case of a mutual insurance company. The Annual Financial Statement's Jurat Page (only) is to be signed (facsimile or electronic signatures are acceptable) by the company President, Secretary, and a Notary Public who shall also affix a notary seal;
( 5 ) IRIS ratio results, and an explanation for any ratios outside the normal ranges as established by the NAIC, as of the close of the preceding year;
( 6 ) A completed Treasury Schedule F (Form No. TFS 6314), as referenced in § 223.9(c) as of the close of the preceding year;
( 7 ) A completed Schedule of Excess Risks form (Form No. FS 285-A) as of the close of the preceding quarter;
( 8 ) A Statement of Actuarial Opinion as of the close of the preceding year provided by a qualified actuary, as defined by the NAIC, on the adequacy of all loss reserves with the scope and format of the statement also conforming to the requirements of the NAIC;
( 9 ) A listing of the names of the company's current officers and directors as of the close of the preceding year, including a biographical affidavit of any new officer and director for whom a biographical affidavit was not previously provided, per instructions online at *https://www.fiscal.treasury.gov/surety-bonds/*;
( 10 ) A Report of Federal Business Written and/or Outstanding as of the close of the preceding year, per instructions provided online at *https://www.fiscal.treasury.gov/surety-bonds/*; and
( 11 ) Such other evidence as Treasury may request to establish that the company is solvent, willing, and able to meet the continuing obligation to carry out its contracts. Additionally, Treasury will publish supplemental guidance annually regarding evidence it may require, submission methods, and format of the data listed in paragraphs (b)(1) through (10) of this section.
[89 FR 48831, June 10, 2024]