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(a) Except as otherwise provided in § 47-18-5514, a provider that is required to be registered under this part shall file a surety bond with the administrator, which must:
(1) Be in effect during the period of registration and for two (2) years after the provider ceases providing debt-management services to individuals in this state; and
(2) Run to this state for the benefit of this state and of individuals who reside in this state when they agree to receive debt-management services from the provider, as their interests may appear.
(b) Subject to adjustment of the dollar amount pursuant to § 47-18-5532(f), a surety bond filed pursuant to subsection (a) must:
(1) Be in the amount of fifty thousand dollars ($50,000) or other larger or smaller amount that the administrator determines is warranted by the financial condition and business experience of the provider, the history of the provider in performing debt-management services, the risk to individuals and any other factor the administrator considers appropriate;
(2) Be issued by a bonding, surety or insurance company authorized to do business in this state and rated at least “A” by a nationally recognized rating organization; and
(3) Have payment conditioned upon noncompliance of the provider or its agent with this part.
(c) If the principal amount of a surety bond is reduced by payment of a claim or a judgment, the provider shall immediately notify the administrator and, within thirty (30) days after notice by the administrator, file a new or additional surety bond in an amount set by the administrator. The amount of the new or additional bond must be at least the amount of the bond immediately before payment of the claim or judgment. If for any reason a surety terminates a bond, the provider shall immediately file a new surety bond in the amount of fifty thousand dollars ($50,000) or other amount determined pursuant to subsection (b).
(d) The administrator or an individual may obtain satisfaction out of the surety bond procured pursuant to this section if:
(1) The administrator assesses expenses under § 47-18-5532(b)(1), issues a final order under § 47-18-5533(a)(2) or recovers a final judgment under § 47-18-5533(a)(4), (a)(5) or (d); or
(2) An individual recovers a final judgment pursuant to § 47-18-5535(a), (b), (c)(1), (c)(2) or (c)(4).
(e) If claims against a surety bond exceed or are reasonably expected to exceed the amount of the bond, the administrator, on the initiative of the administrator or on petition of the surety, shall, unless the proceeds are adequate to pay all costs, judgments and claims, distribute the proceeds in the following order:
(1) To satisfaction of a final order or judgment under § 47-18-5533(a)(2), (a)(4), (a)(5) or (d);
(2) To final judgments recovered by individuals pursuant to § 47-18-5535(a), (b), (c)(1), (c)(2) or (c)(4), pro rata;
(3) To claims of individuals established to the satisfaction of the administrator, pro rata; and
(4) If a final order or judgment is issued under § 47-18-5533(a), to the expenses charged pursuant to § 47-18-5532(b)(1).
Cite this article: FindLaw.com - Tennessee Code Title 47. Commercial Instruments and Transactions § 47-18-5513 - last updated January 01, 2020 | https://codes.findlaw.com/tn/title-47-commercial-instruments-and-transactions/tn-code-sect-47-18-5513/
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