2 Colo. Code Regs. § 406-16-1662

Current through Register Vol. 48, No. 1, January 10, 2025

Section 2 CCR 406-16-1662 - FINANCIAL GUARANTY (SURETY)

See also § 11-35-101 - 101.5, C.R.S. for general requirements concerning forms of surety.

A.Amount and Proof of Surety

1. Prior to the establishment of any Division agent, the applicant shall provide proof of financial surety, on forms provided by the Division, for a minimum period of twelve months. The initiation and expiration dates of the coverage must be stated on the surety certificate. A continuation certificate issued by the bonding company or financial institution or proof of other acceptable financial surety shall be required for renewal of the Division agent for each twelve-month period, and must be provided to the Division no later than thirty days prior to expiration. All surety certificates must be originals and signed by both the surety (or their legal designee) and the Division agent.

2. Division agents shall be bonded in the amount necessary to ensure remittance of all funds due the Division. New license agents shall be required to be bonded for a minimum of $2000. After the first twelve months for a new agent, or considering the historical sales records for existing agents, the amount of financial surety required of each agent shall be sufficient to ensure payment for licenses sold for the highest ten consecutive days sales in the current bonding period. Consolidated agents shall be responsible for the remittance of funds collected by their outlets, and shall be required to bond in the amount necessary to cover each outlet in the agency as if they were licensed individually.

3. Division agents shall not sell Division products in amounts that would exceed their bond level. Agents shall be responsible for payment of revenues at more frequent intervals, via ACH, if necessary to restore available bond.

4. Division agents shall have the option to adjust their surety level on a quarterly basis as determined by the highest ten consecutive days in the quarter. Quarters shall begin on the first days of January, April, July, and October. Proof of such adjustment must be posted before sales can be made against the higher bond amount.

2 CCR 406-16-1662

47 CR 11, June 10, 2024, effective 7/1/2024

47 CR 23, December 10, 2024, effective 1/1/2025