Legislation to Get Sureties Back in Public Official Bond Market Close to Passage in New Jersey
Thursday, October 18, 2012
New Jersey AB 1968 would permit surety companies to issue
blanket bonds for municipal treasurers and tax collectors and municipal court
judges and administrators. In 2006, sureties were eliminated from this market.
The law requires treasurers, tax collectors, and municipal court judges and
administrators to obtain blanket bonds from a state joint insurance fund (JIF).
Under prior law, public officers and directors could be covered under
individual or blanket bonds and either sureties or the JIF could write these
bonds. Under the law enacted in 2006, a surety may provide blanket bonds in
lieu of an individual bond for any officer or employee required to be bonded,
but not for treasurers, tax collectors, and municipal court judges and
administrators. The JIF, however, is permitted to write blanket bonds for
officers and employees, as well as treasurers, tax collectors and municipal
court judges and administrators.
As originally introduced, the bill corrected the problem by
removing the provision that excluded sureties from writing these blanket
bonds. AB 1968, however, was amended on
the Assembly floor to provide that treasurers,
tax collectors, and municipal court judges and administrators covered under a blanket bond shall be subject to the same
individual underwriting and rating criteria as a person covered by an
individual bond. That new provision
applies to blanket bonds from sureties or the JIF.
The amended bill passed the
Assembly in March. The Senate Commerce
Committee reported AB 1968 out of committee this week, which means that it is
headed to the Senate floor.
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