NY Banking L § 643 (2021)
2021 New York Laws BNK - Banking Article 13-B - Transmitters of Money 643 - Bond or Securities.

§ 643.  Bond  or  securities.  1.  As a condition for the issuance and   retention of the license, applicants for a license and  other  licensees   shall,  within  thirty  days after notice by the superintendent, or such   longer or shorter period as he or she shall  prescribe,  file  with  the   superintendent  one  or more corporate surety bond or bonds, as required   below, in form satisfactory to him  or  her  and  issued  by  a  bonding   company  or  insurance  company authorized to do business in this state.   One bond shall be in favor of the superintendent and in  such  principal   amount  as  he  or she shall determine is necessary or desirable for the   protection of the purchasers and holders of New York instruments sold or   to be sold by the applicant or licensee, provided, however,  that  until   June first, nineteen hundred seventy-seven, the principal amount of such   bond  shall  be no less than two hundred ten thousand dollars and on and   after June first, nineteen hundred seventy-seven, the  principal  amount   of such bond shall be no less than five hundred thousand dollars. If the   applicant  or  licensee  intends to engage or engages in the sale of New   York traveler's checks, such applicant or licensee shall file  with  the   superintendent  a  separate  bond.  Said  bond  shall be in favor of the   superintendent and in such principal amount as he or she shall determine   is necessary or desirable for  the  protection  of  the  purchasers  and   holders  of  the  New  York  traveler's checks sold or to be sold by the   applicant or licensee; provided, however, that the principal  amount  of   such  bond  shall not be less than seven hundred fifty thousand dollars,   unless the superintendent, for good cause shown, shall  have  determined   that  a lesser amount will adequately protect the purchasers and holders   of the New York traveler's checks sold or to be sold by  such  applicant   or licensee.In making any determination under this subdivision, the superintendent   may  take  into  account  the  financial  condition of the licensee, the   number of locations in this state at which the licensee, either directly   or  through  agents,  transacts  the  business  of  selling   New   York   instruments  or New York traveler's checks, the controls imposed on such   agents or, and the possible exposure of purchasers and  holders  of  New   York  instruments and New York traveler's checks to loss in the event of   the  insolvency,  bankruptcy  or  other  financial  impairment  of   the   licensee.  The  proceeds  of each bond shall constitute a trust fund for   the exclusive benefit of the purchasers and  holders  of  the  New  York   instruments  and  New York traveler's checks, as the case may be. Except   as otherwise provided in the following sentence, in  the  event  of  the   insolvency  or  bankruptcy  of any licensee, the proceeds of the bond or   bonds held for the exclusive benefit of the purchasers  and  holders  of   New  York instruments and the proceeds of the bond or bonds held for the   exclusive benefit of the purchasers and holders of New  York  traveler's   checks  shall be paid to the superintendent forthwith for disposition in   accordance with  the  provisions  of  this  article.  If  any  New  York   instruments  have  been  assigned  to the fund, the proceeds of the bond   held for the exclusive benefit of the purchasers and holders of New York   instruments shall constitute a trust fund for the benefit of, and  shall   be  payable  to, the fund to the extent of such assignment. From time to   time, the superintendent may require, upon thirty days  notice  or  such   longer or shorter period as he or she shall prescribe, that such bond or   bonds  be  increased  if he or she shall determine that such increase is   necessary or desirable for the protection of the purchasers and  holders   of New York instruments and New York traveler's checks.2.  The licensee shall give notice to the superintendent by registered   or certified mail of any action which shall be brought against  him  and   of  any judgment which shall be entered against him by such purchaser or   holder of a New York instrument or a New  York  traveler's  check,  with    details  sufficient  to identify the action or judgment, within ten days   after the commencement of any such action or notice to the  licensee  of   entry  of  any such judgment. The corporate surety shall within ten days   after it pays any claim or judgment to any such purchaser or holder of a   New  York  instrument  or a New York traveler's check give notice to the   superintendent  by  registered  mail  of  such  payment,  with   details   sufficient to identify the purchaser or holder and the claim or judgment   so  paid. Whenever the principal sum of such bond or bonds is reduced by   one or more recoveries or payments thereon the licensee shall furnish  a   new or additional bond or bonds under the provisions of this section, so   that  the  total  or aggregate principal sum of such bond or bonds shall   equal the sum required pursuant to the provisions of  this  section,  or   shall  furnish  an  endorsement  duly  executed  by the corporate surety   reinstating the bond or bonds to the required principal sum thereof. The   liability of the surety on such bond or bonds to the superintendent  and   to  the said purchasers and holders of New York instruments and New York   traveler's  checks  shall  not  be  affected   in   any   way   by   any   misrepresentation,  breach  of warranty or failure to pay the premium or   by any act or omission  upon  the  part  of  the  licensee  nor  by  the   insolvency  or  bankruptcy  of  the  licensee  or  the insolvency of the   licensee's estate, and in the event  of  the  death  or  dissolution  or   liquidation  of  the  licensee,  shall  continue  upon  all transactions   entered into by the agents of such  deceased,  dissolved  or  liquidated   licensee  within a period of thirty days after the death, dissolution or   liquidation of the  licensee  or  termination  of  the  bond  or  bonds,   whichever   date   shall  first  occur,  provided,  however,  that  such   transactions were entered into in good  faith  by  such  purchasers  and   holders  of  New  York instruments and New York traveler's checks. Every   such corporate surety bond shall  provide  that  in  the  event  that  a   judgment  recovered  against the licensee or its legal representative or   successor by any such purchaser or  holder  on  a  claim  arising  or  a   transaction  entered  into  during  the  life  of  the bond shall remain   unsatisfied after the expiration of thirty  days  from  the  service  of   notice  of  entry  of  judgment  upon  the  licensee  or  upon his legal   representative or successor or upon the attorney for the  licensee,  and   upon  the  corporate surety, or in the event that the fund has become an   assignee of any claim arising or a transaction entered into  during  the   life of the bond, then an action may be maintained against the corporate   surety  under  the terms of the bond (1) by such purchaser or holder for   the amount of such judgment not exceeding the amount of the bond, except   during a stay of execution of such judgment against the licensee or  his   legal  representatives  or  successors, or (2) by the superintendent, on   behalf of the fund, for the amount of  such  claim,  not  exceeding  the   amount of the bond. The bond may not be cancelled either by the licensee   or  the surety except upon notice to the superintendent by registered or   certified mail with return receipt requested,  the  cancellation  to  be   effective  not less than ten days after receipt by the superintendent of   such notice.3. In lieu of such corporate surety bond or bonds, or of  any  portion   of the principal sum thereof as required by this section, applicants for   a license and other licensees may keep on deposit, or may be required to   keep on deposit by the superintendent, with such banks, trust companies,   national  banks,  savings  bank,  savings and loan associations, federal   savings associations, credit unions, or federal  credit  unions  in  the   state  of New York as such applicants or licensees may designate and the   superintendent may approve,  and  in  accordance  with  such  rules  and   regulations  as  the  superintendent shall from time to time promulgate,   interest-bearing  stocks  and  bonds,   notes,   debentures   or   other    obligations  of  the  United  States  or  any  agency or instrumentality   thereof, or guaranteed by the United States, or of this state, or  of  a   city,  county, town, village, school district or instrumentality of this   state,  or guaranteed by this state, or dollar deposits, to an aggregate   amount, based upon principal amount or market value, whichever is lower,   in the case of the above-described securities,  of  not  less  than  the   amount  of  the  required  corporate  surety bond or bonds or portion or   portions thereof. Such securities or funds shall be deposited to  secure   the same obligation or obligations as would the corporate surety bond or   bonds filed under this section. So long as it shall continue business in   the  ordinary  course,  such  licensee  shall  be  permitted  to collect   interest on the securities  so  deposited  and  from  time  to  time  to   exchange,  examine  and  compare  such  securities.  In the event of the   failure or insolvency of such licensee,  the  securities,  any  proceeds   therefrom  and  the  funds  deposited  pursuant  to  this  section shall   constitute a trust fund for the exclusive benefit of the purchasers  and   holders  of  New  York instruments or New York traveler's checks, as the   case may be, or, in the event such New York instruments are assigned  to   the fund, the securities, any proceeds therefrom and the funds deposited   pursuant  to  this section for the benefit of the purchasers and holders   of New York instruments shall constitute a trust fund, for  the  benefit   of the fund.4.  Notwithstanding  the  foregoing provisions of this section, if the   superintendent shall find that a licensee has transacted the business of   money transmission in this state for a period of five consecutive  years   and  that  such  business  has  been conducted honestly, efficiently and   safely and that the licensee's financial condition is sound and that its   New York instruments are insured, the superintendent may dispense  with,   modify  or  eliminate  any of the foregoing requirements of this section   with respect to New York instruments; provided, however, that if at  any   time  subsequent  thereto, the superintendent shall deem it necessary or   desirable for the protection of the purchasers and holders of  New  York   instruments,  to  reinstate  any of the requirements of this section, he   may do so.