Section 5014 - ILOC TermsThe terms and conditions of an ILOC shall be consistent with the resolution of the Corporation approving the ILOC and shall include all of the following:
(a) Provision that the Corporation promises to pay a specified amount to Surety upon Surety establishing a claim reserve.(b) The maximum amount of the ILOC shall be 15% of the contract amount, not to exceed $350,000.(c) Where the Bond is for a public works project, a statement that the ILOC shall expire one hundred and twenty days following receipt by Surety of a statement from the party requiring the Bond ("Obligee") that the work has been completed and fully accepted and that Obligee has made payment of all amounts owed the Principal pursuant to the Bond. The ILOC shall expire only if no notice of Claim is pending with the Surety. If the Bond is for other than a public works project, then the Corporation and Surety shall include in the ILOC what events and timing trigger expiration of the Guarantee.(d) The Corporation fee not to exceed two percent of the ILOC amount.(e) The terms and conditions of the Bond collateralized by the ILOC shall be in accord with those generally established and accepted by the Surety for the type of contract for which the Bond is required.(f) A statement that: (1) Surety would not provide the Bond without the ILOC.(2) Surety shall not join Corporation in any lawsuit to which Surety is a party unless Corporation has denied a Demand.(3) The terms of the ILOC shall not be waived, changed or altered unless both Corporation and Surety's authorized representative have signed and dated assent thereto.(4) Corporation shall have access to and the right to audit and inspect any and all documents related to the Bond. The audit shall be conducted in a reasonable manner during business hours or as otherwise agreed upon between Corporation and Surety.(5) The ILOC is made exclusively for the benefit of Corporation and Surety and does not confer any rights or benefits to any other party. In the event of the Surety's insolvency, Corporation shall not be liable to the receiver or trustee of the insolvent estate except for any Loss.Cal. Code Regs. Tit. 10, § 5014
1. New section filed 2-15-94 as an emergency; operative 2-15-94 (Register 94, No. 7). A Certificate of Compliance must be transmitted to OAL by 6-15-94 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 95, No. 7).
3. New section filed 4-17-95 as an emergency; operative 4-17-95 (Register 95, No. 16). A Certificate of Compliance must be transmitted to OAL by 8-15-95 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-17-95 order transmitted to OAL 6-12-95 and filed 7-25-95 (Register 95, No. 30). Note: Authority cited: Section 14022(b), Corporations Code. Reference: Sections 14002, 14055, 14071 and 14071.5, Corporations Code.
1. New section filed 2-15-94 as an emergency; operative 2-15-94 (Register 94, No. 7). A Certificate of Compliance must be transmitted to OAL by 6-15-94 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 95, No. 7).
3. New section filed 4-17-95 as an emergency; operative 4-17-95 (Register 95, No. 16). A Certificate of Compliance must be transmitted to OAL by 8-15-95 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-17-95 order transmitted to OAL 6-12-95 and filed 7-25-95 (Register 95, No. 30).