The Florida Senate

560.209  Net worth; corporate surety bond; collateral deposit in lieu of bond.--

(1)  Any person engaging in a registered activity shall have a net worth of at least $100,000 computed according to generally accepted accounting principles. Applicants proposing to conduct registered activities at more than one location shall have an additional net worth of $50,000 per location in this state, as applicable, to a maximum of $500,000.

(2)  Before the office may issue a registration, the applicant must provide to the office a corporate surety bond, issued by a bonding company or insurance company authorized to do business in this state.

(a)  The corporate surety bond shall be in such amount as may be determined by commission rule, but shall not exceed $250,000. However, the commission and office may consider extraordinary circumstances, such as the registrant's financial condition, the number of locations, and the existing or anticipated volume of outstanding payment instruments or funds transmitted, and require an additional amount above $250,000, up to $500,000.

(b)  The corporate surety bond shall be in a form satisfactory to the office and shall run to the state for the benefit of any claimants in this state against the applicant or its authorized vendors to secure the faithful performance of the obligations of the applicant and its authorized vendors with respect to the receipt, handling, transmission, and payment of funds. The aggregate liability of the corporate surety bond in no event shall exceed the principal sum of the bond. Such claimants against the applicant or its authorized vendors may themselves bring suit directly on the corporate surety bond, or the Department of Legal Affairs may bring suit thereon on behalf of such claimants, in either one action or in successive actions.

(c)  A corporate surety bond filed with the office for purposes of compliance with this section may not be canceled by either the registrant or the corporate surety except upon written notice to the office by registered or certified mail with return receipt requested. A cancellation shall not take effect less than 30 days after receipt by the office of such written notice.

(d)  The corporate surety must, within 10 days after it pays any claim to any claimant, give written notice to the office by registered or certified mail of such payment with details sufficient to identify the claimant and the claim or judgment so paid.

(e)  Whenever the principal sum of such bond is reduced by one or more recoveries or payments, the registrant must furnish a new or additional bond so that the total or aggregate principal sum of such bond equals the sum required by the commission. Alternatively, a registrant may furnish an endorsement executed by the corporate surety reinstating the bond to the required principal sum thereof.

(3)  In lieu of such corporate surety bond, or of any portion of the principal thereof required by this section, the applicant may deposit collateral cash, securities, or alternative security devices approved by the commission, with any federally insured financial institution.

(a)  Acceptable collateral deposit items in lieu of a bond include cash and interest-bearing stocks and bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, or guaranteed by the United States, or of this state.

(b)  The collateral deposit must be in an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the required corporate surety bond or portion thereof.

(c)  Collateral deposits made under this subsection shall be pledged to the office and held by the insured financial institution to secure the same obligations as would the corporate surety bond, but the depositor is entitled to receive all interest and dividends thereon and may, with the approval of the office, substitute other securities or deposits for those deposited. The principal amount of the deposit shall be released only on written authorization of the office or on the order of a court of competent jurisdiction.

(4)  A registrant must at all times have and maintain the bond or collateral deposit in the amount prescribed by the commission. If the office at any time reasonably determines that the bond or elements of the collateral deposit are insecure, deficient in amount, or exhausted in whole or in part, the office may, by written order, require the filing of a new or supplemental bond or the deposit of new or additional collateral deposit items.

(5)  The bond and collateral deposit shall remain in place for 5 years after the registrant ceases registered operations in this state. The office may permit the bond or collateral deposit to be reduced or eliminated prior to that time to the extent that the amount of the registrant's outstanding payment instruments or funds transmitted in this state are reduced. The office may also permit a registrant to substitute a letter of credit or such other form of acceptable security for the bond or collateral deposit at the time the registrant ceases money transmission operations in this state.

(6)  The office may waive or reduce a registrant's net worth or bond or collateral deposit requirement. Such waiver or modification must be requested by the applicant or registrant, and may be granted upon a showing by the applicant or registrant to the satisfaction of the office that:

(a)  The existing net worth, bond, or collateral deposit requirement is sufficiently in excess of the registrant's highest potential level of outstanding payment instruments or money transmissions in this state;

(b)  The direct and indirect cost of meeting the net worth, bond, or collateral deposit requirement will restrict the ability of the money transmitter to effectively serve the needs of its customers and the public; or

(c)  The direct and indirect cost of meeting the net worth, bond, or collateral requirement will not only have a negative impact on the money transmitter but will severely hinder the ability of the money transmitter to participate in and promote the economic progress and welfare of this state or the United States.

History.--s. 2, ch. 94-238; s. 2, ch. 94-354; s. 715, ch. 2003-261.