Source: http://delcode.delaware.gov/sessionlaws/ga138/chp356.shtml
Timestamp: 2015-04-19 21:03:17
Document Index: 170961844

Matched Legal Cases: ['§2108', '§2108', '§1813', '§5', '§2208', '§ 1813', '§5']

Section 1. Amend §2108, Title 5, Delaware Code, by striking said section in its entirety and substituting in lieu thereof anew subsection 2108 to read as follows:
"§2108. Surety Bonds and Irrevocable Letters of Credit
(4) The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner shall determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a
notice to be published for the purpose of identifying all relevant claims.
(b) Irrevocable Letters of Credit
Such irrevocable letters of credit shall be provided by an insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. §1813(c)) acceptable to the Commissioner, in a form satisfactory to the Commissioner in the principal sum of $25,000.
No irrevocable letter of credit shall be accepted unless the following requirements are satisfied:
(i) The irrevocable letter of credit shall run to the State, for the benefit of the Office of the State Bank Commissioner and for the benefit of all consumers injured by the wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the irrevocable letter of credit shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. The aggregate liability of the insured depository institution issuing the irrevocable letter of credit shall in no event exceed the amount of such irrevocable letter of-credit; and
(ii) Draws upon such irrevocable letters of credit shall be available by sight drafts thereunder, in amounts determined by the Commissioner, up to the aggregate amount of the irrevocable letter of credit. Such drafts shall be paid in accordance with §5-112(1) of Title 6 of the Delaware Code.
The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner shall determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a notice to be published for the purpose of identifying all relevant claims.
"§2208. Surety Bonds and Irrevocable Letters of credit. (a) Surety Bonds
(1) Every licensee shall file with the Commissioner, in a form
satisfactory to the Commissioner, an original corporate surety bond, with surety provided by a corporation authorized to transact business in this State, in the principal sum to be determined by the Commissioner, except that the bond amount shall not be less than $50,000 or more than $200,000. In determining the amount of the bond required for a licensee, the Commissioner shall consider, among other things:
(1) the dollar value of the lender's Delaware business;
(ii) the dollar value of advance fees collected by the lender;
(ii) the periods for which such fees are held before a 'loan is funded; and
(iii) such other and further criteria as the Commissioner may deem necessary and appropriate.
(i) the aggregate value of the bond shall be equal to or greater than the amount determined in accordance with subsection (a)( I) of this section;
(iii) the bond shall run to the State, for the benefit of the Office of the State Bank Commissioner and for the benefit of all consumers injured by any wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the bond shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. Surety claims shall be paid to the Office of the State Bank Commissioner by the insurer not later than 90 days after receipt of a claim. Claims paid alter 90 days shall be subject to daily interest at the legal rate. The aggregate liability of the surety on the bond, exclusive of any interest which accrues for payments made after 90 days, shall in no event exceed the amount of such bond.
(3) If the licensee changes its surety company or the bond is otherwise amended. the licensee shall immediately provide the Commissioner with the amended original copy of the surety bond. No cancellation of an existing bond by a surety shall be effective unless written notice of its intention to cancel is filed with the Commissioner at least thirty (30) days before the date upon which cancellation shall take effect.
The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner may determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a notice to be published for the purpose of identifying all relevant claims.
(4) When a surety company receives a claim against the bond of a licensee, it shall immediately notify the Commissioner and shall not pay any claim unless and until it receives notice to do so from the Commissioner.
(5) The Commissioner shall have a period of two calendar years after the effective date of cancellation or termination of the surety bond by the insurer to submit claims to the insurer.
(1) Such irrevocable letters of credit shall be provided by an insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c)) acceptable to the Commissioner, in a form satisfactory to the Commissioner in the principal sum to be determined by the Commissioner, except that the irrevocable letter of credit amount shall not be less than $50,000 or more than $200,000. In determining the amount of the irrevocable letter of credit required for a licensee, the Commissioner shall consider, among other things:
(i) the dollar value of the lender's Delaware business;
(i) the dollar value of advance fees collected by the lender;
(ii) the periods for which such fees are held before a loan is funded; and
(i) the aggregate value of the irrevocable letter of credit shall be equal to or greater than the amount determined by subsection (b)( I ) of this section;
(ii) The irrevocable letter of credit shall run to the State, for the benefit of the Office of the State Bank Commissioner and for the benefit of all consumers injured by the wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the irrevocable letter of credit shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. The aggregate liability of the insured depository institution issuing the irrevocable letter of credit shall in no event exceed the amount of such irrevocable letter of credit; and
(iii) Draws upon such irrevocable letters of credit shall be available by sight drafts thereunder, in amounts determined by the Commissioner, up to the aggregate amount of the irrevocable letter of credit. Such drafts shall be honored in accordance with §5- 112(1) of Title 6 of the Delaware Code.
(3) The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner may determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a licensee, the Commissioner shall cause a notice to be published for the-purpose of identifying all relevant claims.
Section 3. This Act shall become effective for licensing periods beginning January 1, 1997. Any surety bonds or letters of credit provided in advance of January 1, 1997, for licensing periods beginning January 1, 1997, shall comply with the requirements contained herein.
Approved June 7, 1996