Section 824 IAC 2-4-4 - Bond; irrevocable letter of credit; cash depositAuthority: IC 26-3-7-3
Affected: IC 26-3-7
Sec. 4.
(a) Each licensee shall file:(1) a current and effective surety bond running to the director and executed by the applicant as principal;(2) an irrevocable letter of credit; or(3) any combination of the items listed in this subsection.(b) A bond filed under the Act shall have the following requirements:(1) The bond must be submitted on the form provided by the agency.(2) The surety shall be licensed to do business in Indiana.(3) If a licensee files a single bond covering all facilities operated by the licensee, the entire amount of the bond shall be held on behalf of any depositor of any facility operated by the licensee.(4) The total and aggregate liability of the surety on any bond required by the Act shall be limited to the amount specified in the bond.(5) The surety bond shall be effective on the date of issue. The bond shall not be affected by the expiration of the annual license period and shall continue in full force and effect until canceled. The continuous nature of the bond shall not be construed as allowing the liability of the bond to accumulate for each successive licensing period. The bond shall be limited to the amount stated or changed by appropriate endorsement or rider.(6) The bonds are for grain obligations due to producers from the licensee on the effective date of the bond, including proceeds from the sale of grain belonging to producers.(7) Bonds shall include a statement appointing and authorizing an individual to execute the bond and act as the corporate surety's attorney-in-fact.(8) After computing the amount of bond required according to the Act, the figure may be rounded up to the nearest one hundred dollars ($100).(9) When increases in capacities or the bushels purchased result in an increase to the bond amount, a bond rider for the appropriate amount must be filed. Licensees must submit a bond rider for increases over five hundred dollars ($500). Increases that are less than five hundred dollars ($500) may not be required.(10) If a licensee changes to a different surety company, the successor bond is deemed to be a continuation of the same coverage through a different company.(11) If a failed licensee submitted more than one (1) form of bond or security, and the claims do not exceed the total amount of all the securities, the proven claimants shall be paid by using the cash bond first. The irrevocable letter of credit or surety bond having the oldest date shall be called next. The security having the most recent date shall be used last.(12) The bond coverage shall cease when a license is terminated by the agency. Coverage shall remain in effect during a temporary license suspension.(c) An irrevocable letter of credit filed under the Act shall meet the following requirements: (1) Be issued by a financial institution insured by Federal Deposit Insurance Corporation.(2) Be payable to the director of the agency.(3) Give a ninety (90) day notice prior to cancellation.(4) Continue the coverage for eighteen (18) months after the termination of the license.(5) Be issued for a minimum of one (1) year.(7) Demand for payment shall be the finding of fact and final order issued under administrative law by the director.(8) Subsection (b)(3) through (b)(6) and (b)(8) through (b)(11) also apply.(d) A licensee or applicant submitting a cash bond required under the Act shall complete the cash bond form supplied by the agency. Agency personnel shall complete the "receipt for cash deposit" section on the form and return a copy to the licensee or applicant.(e) The following shall apply to the agency for all cash bonds received under the Act:(1) Funds shall be deposited in one (1) of the following: (A) A financial institution insured by FDIC (Federal Deposit Insurance Corporation).(B) A financial institution approved by the director.(2) The funds shall be held in:(B) a certificate of deposit;(C) a combination of clauses (A) and (B); or(D) any other type of account approved by the director.(3) Separate records of interest earnings shall be kept by the agency.(4) Interest earnings may be forwarded to the licensee unless: (A) the licensee requests the interest accrue to the initial amount deposited; or(B) interest could be used to cover a deficiency in the requirements.(5) Two (2) signatures of agency personnel shall be required on all of the following:(C) Certificates of deposits.Indiana Grain Buyers and Warehouse Licensing Agency; 824 IAC 2-4-4; filed Jan 19, 2001, 3:04 p.m.: 24 IR 1653; readopted filed Nov 16, 2007, 2:00 p.m.: 20071212-IR-824070667RFA; readopted filed November 27, 2013, 1:30 p.m.: 20131225-IR-824130492RFAFiled 11/16/2016, 3:34 p.m.: 20161214-IR-824150331FRAReadopted filed 11/1/2019, 10:20 a.m.: 20191127-IR-824190178RFA