Section 40.503 - Form and Amount of Fidelity Bond(a) An industrial loan company that sells and issues investment certificates or has investment certificates outstanding shall file with the Commissioner a fidelity bond providing fidelity coverage on each officer, director, and employee in accordance with the requirements of this section and section 18346 of the Financial Code.(b) A bond must include in its definition as employee, either in the body of the bond or by rider, the following: Each natural person, partnership or corporation authorized by written agreement with the insured to perform services as electronic data processor of checks or other accounting records of the insured, herein called Processor, shall, while performing these services, be deemed to be an Employee as defined in this bond. Each such Processor and the partners, officers and employees of the Processor shall, collectively, be deemed to be one Employee for all the purposes of this bond.(c) A bond may be subject to cancellation on 30 days notice, provided the bond carries a rider or condition to the effect that it is subject to cancellation by the surety or insured 30 days after written notice to the Commissioner of Business Oversight of intention to cancel.(d) Unless the Commissioner for good cause, in writing, has found that a different amount of coverage would be in the public interest, minimum fidelity coverage shall be maintained in accordance with the requirements of the Federal Deposit Insurance Corporation ("FDIC").(e) The bond coverage may contain provision for a deductible amount from any loss which, except for the deductible provision, would be recoverable from the insurer. A deductible provision shall not be in excess of ten percent (10%) of the required minimum bond coverage unless authorized by the Commissioner in writing.Cal. Code Regs. Tit. 10, § 40.503
1. Change without regulatory effect renumbering and amending former section 1154 to new section 40.503 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).
2. Change without regulatory effect amending subsection (c) and NOTE filed 8-21-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 34). Note: Authority cited: Sections 326 and 18347, Financial Code. Reference: Sections 321, 18346 and 18346.1, Financial Code.
1. Change without regulatory effect renumbering and amending former section 1154 to new section 40.503 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).
2. Change without regulatory effect amending subsection (c) and Note filed 8-21-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 34).