Current through Register Vol. 54, No. 45, November 9, 2024
Section 78.304 - Terms and conditions for surety bonds(a) The bond of a surety company that has failed, refused or unduly delayed to pay, in full, on a forfeited surety bond is not approvable.(b) Only the bond of a surety authorized to do business in this Commonwealth is approvable. If the principal place of business of the surety is outside of this Commonwealth, or if the surety is not a Pennsylvania corporation, the surety bond shall also be signed by an authorized resident agency of the surety that maintains an office in this Commonwealth.(c) The surety may cancel the bond by filing written notice of cancellation with the Department, the operator and the principal on the bond, only under the following conditions: (1) The notice of cancellation shall be sent by certified mail, return receipt requested. Cancellation may not take effect until 120 days after receipt of the notice of cancellation by the Department, the operator and the principal on the bond as evidenced by return receipts.(2) Within 30 days after receipt of a notice of cancellation, the operator shall provide the Department with a replacement bond under § 78.310 (relating to replacement of existing bond).(d) The Department will not accept surety bonds from a surety company when the total bond liability to the Department on the bonds filed by the operator, the principal and related parties exceeds the surety company's single risk limit as provided by The Insurance Company Law of 1921 (40 P. S. §§ 341-991).(e) The bond shall provide that the surety and the principal shall be jointly and severally liable for payment of the bond amount.(f) The bond shall provide that the amount shall be confessed to judgment and execution upon forfeiture.(g) The Department will retain, during the term of the bond, and upon forfeiture of the bond, a property interest in the surety's guarantee of payment under the bond which is not affected by the bankruptcy, insolvency or other financial incapacity of the operator or principal on the bond.(h) The surety shall give written notice to the Department, if permissible under law, to the principal and the Department within 10 days of a notice received or action filed by or with a regulatory agency or court having jurisdiction over the surety alleging one of the following:(1) The insolvency or bankruptcy of the surety.(2) A violation of regulatory requirements applicable to the surety, when as a result of the violation, suspension or revocation of the surety's license to do business in this Commonwealth or another state is under consideration by a regulatory agency.The provisions of this §78.304 adopted July 28, 1989, effective 7/29/1989, 19 Pa.B. 3229. This section cited in 25 Pa. Code § 78.303 (relating to form, terms and conditions of the bond).