Rule 120-2-49-.07 - Administrator Bond; Errors and Omissions Coverage(1) Every administrator shall file a bond with the Commissioner. The administrator shall file a certificate of such bond, in a form acceptable by a corporate surety insurer authorized to transact insurance in this state in favor of Commissioner of Insurance of the state of Georgia, continuous in form and in an amount equal to at least ten percent of the amount of the funds handled or managed annually by the administrator based on the preceding year, or if no funds were handled during the preceding year, ten percent of the amount of funds reasonably estimated to be handled during the current calendar year. In no event will the bond be less than $100,000.(2) The bond shall inure to the benefit of any person damaged by any fraudulent act or conduct of the administrator and must be conditioned upon faithful accounting and application of all money coming into the administrator's possession in connection with its activities as an administrator.(3) The bond remains in force until released by the Commissioner or canceled by the surety. Without prejudice to any liability previously incurred, the surety may cancel the bond upon 30 days' advance notice to the administrator and the Commissioner. An administrator's license shall be suspended if it does not file with the Commissioner a replacement bond before the date of cancellation of the previous bond. A replacement bond must meet all requirements of this section for the initial bond.(4) Each administrator shall obtain errors and omissions coverage or other appropriate liability insurance, written by an insurer authorized to transact insurance in this state, in an amount of at least $100,000.(5) Any policy written in accordance with paragraph (4) of this Rule shall be for a term of at least one year and shall contain provisions that: (a) Cancellation or termination of the policy is not effective except upon sixty (60) days written notice by registered or certified mail to the other party to the policy and to the Commissioner; and(b) The policy is automatically renewable at the expiration of the policy period except upon sixty (60) days written notice by registered or certified mail by the party not renewing the policy to the other party to the policy and to the Commissioner.(6) Upon approval by the Commissioner, bonds or policies may be written by an eligible surplus lines insurer.(7) Compliance by the administrator with paragraph (4) of this Rule is a prerequisite to approval of its application by the Commissioner.(8) Any bond and errors and omissions coverage required for licensure and renewal purposes shall be maintained in place by the administrator for a period of at least one year immediately following the surrender, non-renewal or revocation of the license.Ga. Comp. R. & Regs. R. 120-2-49-.07
O.C.G.A. Secs. 33-2-9, 33-23-100et seq., 33-23-102, 33-23-105.
Original Rule entitled "Administrators Fidelity Bond and Insurance" adopted. F. May 19, 1993; eff. June 8, 1993.Amended: F. June 10, 1997; eff. June 30, 1997.Repealed: New Rule entitled "Administrator Bond; Errors and Omissions Coverage" adopted. F. Dec. 9, 2005; eff. Dec. 29, 2005.