Surety Bonds: Nature, Functions, Underwriting Requirements

Edward Clark Lunt

Ronald Press, 1922 - Bail - 370 pages

Contents

• Origin of Corporate Suretyship 2 Parties to a Bond 3 Difference between Suretyship and Insurance: 3
• Difference between Fidelity and Surety Bonds: 6
• Indemnitors: 7
• Collateral Security: 9
• Refunds of Premium: 10
• Procedure at Renewal Dates: 11
• The Surety Association of America: 13
• The Towner Rating Bureau: 16
• THE UNDERWRITING OF FIDELITY BONDS FROM THE STAND POINT OF THE PRINCIPAL: 20
• An Instrument Worse than an IncomeTax Blank: 21
• Reasons for Rejections Stated 14 Dishonesty in the Past: 23
• Addiction to Drink Dissipation and Gambling: 25
• Debts and Extravagance 17 Suspicious Experience with References: 29
• Inability to Verify Alleged Career: 31
• A Solomon Often Needed: 32
• Demands for Explanation of Rejections: 33
• Disclosure of Reasons to the Applicant: 34
• Compulsory Disclosure of Cancellation Reasons: 37
• UNDERWRITING OF FIDELITY BONDS FROM THE STANDPOINT OF THE OBLIGEE 23 Defalcations Not Wholly Due to Subjective Causes 24...: 39
• Audits and Good Accounting Methods Essential: 41
• A Recent Constructive Development: 43
• Employers Statements: 44
• Fidelity Insurance at First Extremely Narrow: 45
• Applied Proverbs: 46
• Representations and Warranties: 47
• Benevolent Attitude of Courts: 48
• Liberalized Bonds Due to Various Causes: 49
• Broadening Outside Influences: 50
• Competition the Chief Broadening Force: 51
• Standard Form of Fidelity Bond: 52
• OneMan Banks 37 Savings Banks: 54
• Rotation and Vacations Desirable: 55
• The HandlesNoCash Fallacy: 56
• Overlooking the Obvious: 57
• The Principals Salary: 58
• SPECIAL CLASSES OF FIDELITY BONDS 42 Attorneys Specializing in Collections: 60
• Fraternal Orders: 62
• Three Degrees of Fraternal Insurance: 63
• Fraternal Rates Incomprehensible: 65
• PAGE: 66
• Charitable Organizations: 67
• Assigned Accounts: 68
• Warehouse Custodians: 70
• Certificates of Character: 71
• Statutory QuasiPublic Fidelity Bonds: 73
• POSITION FIDELITY BONDS 51 Position Insurance Explained 52 Description of a Position Bond: 75
• Position Bonds Are Not Blanket Bonds 54 Data Required from the Employer: 76
• Changes in the Schedule 56 Fresh Premiums Due When Claims Are Made: 78
• Premium Rates 58 Kinds of Risks Suited to Position Bonds: 79
• Applications and Investigations: 80
• Underwriters Attitude toward Position Bonds: 81
• SPECIAL FIDELITYBOND TOPICS 61 Individual Bonds and Schedule Bonds: 84
• Explanation of ScheduleBond Rates: 85
• Leaning Backward 64 Bonding without the Knowledge of the Principals: 87
• Cumulative Liability Sometimes Incurred: 88
• Foreign Fidelity Bonds: 90
• Salvage on Fidelity Claims: 92
• The Standard Form of Fidelity Bond: 94
• An Interesting and Fruitful Field: 98
• BANKERS BLANKET BONDS 70 Origin of the Bond: 100
• London Underwriters Satisfy an American Demand: 102
• The Last Word in Bank Insurance: 103
• Bond Forms Standardized in All Respects: 104
• The American Underwriters Overleapt Themselves: 105
• The Misplacement Coverage: 106
• Two Contributory Causes of Trouble: 108
• Some Startling Claim Possibilities: 109
• Extremely Broad Protection Nevertheless Intended: 110
• Computation of Premiums: 112
• Primary and Excess Coverage: 113
• Possible Obligees of Blanket Bonds 82 Commissions Brokerage and Reinsurance Allowances: 114
• Investigation of Persons Covered: 115
• Securities Owned by Outsiders: 118
• Permissible Modifications of Standard Forms: 119
• Brokers Blanket Bonds: 120
• CHAPTER VIII PUBLICOFFICIAL BONDSGENERAL CONSIDERATIONS 87 Multiform Hazards Embodied in These Bonds: 121
• Subjective Underwriting Considerations: 122
• External Incidents of the Risk: 124
• The Incidental Depository Risk: 125
• Favorable Depository Laws in Certain States: 127
• The Incidental OfficeStaff Risk: 128
• HoldOver Bonds: 129
• MidTerm Bonds Occasionally Called: 131
• MidTerm Bonds Usually Undesirable: 132
• Reindemnifying Bonds Frequently Required: 134
• Partial Indemnification Sometimes Proper: 135
• Premium Rates Not Uniform: 136
• PAGE: 137
• PublicOfficial Application Blank: 138
• Form of PublicOfficial Bond: 139
• Certain Information Particularly Important: 141
• Cancellation Evidence: 142
• Renewals of PublicOfficial Bonds: 143
• Official Bonds Gradually Improving: 144
• PUBLICOFFICIAL BONDSCERTAIN IMPORTANT SPECIES OF THE GENUS 107 Treasurers Bonds State County City Town School etc: 146
• The Sad Case of the Ambidextrous Official: 148
• TaxCollectors Bonds: 149
• Fidelity Underwriting Considerations Particularly Relevant: 150
• Sheriffs Constables and Other Police Officers: 153
• Developments Helpful to the Surety: 154
• County Clerks and Clerks of Courts: 155
• Federal Officials: 156
• JUDICIAL BONDS: 158
• Order of Arrest: 159
• Bail Bonds: 160
• Bail Bonds in New York City: 161
• Plaintiffs Bond to Procure an Injunction: 163
• Defendants Bond to Dissolve an Injunction: 165
• Plaintiffs Attachment Bond: 166
• Defendants Bond to Discharge an Attachment: 169
• Plaintiffs Replevin Bond: 170
• Defendants CounterReplevin Bond: 171
• Removal Bonds: 172
• Security for Costs: 173
• Sheriffs Indemnity Bond 128 Appeal Supersedeas and StayofExecution Bonds: 174
• Security Particularly Appropriate Here: 176
• Release of Libel or Stipulation for Value: 177
• Bond to Discharge a Mechanics Lien: 179
• Petitioning Creditors Bonds 133 Cancellation of Judicial Bonds: 180
• CONTRACT BONDS 134 Most Important Field of Corporate Suretyship: 182
• A Rare Chance for Agents: 184
• Close Underwriting Ultimately Best for Contractors: 185
• Experience and General Standing of the Contractor: 186
• Nature and Extent of Contract to be Performed: 188
• Financial Condition of the Contractor: 189
• Competitive Bids: 191
• Amount and Nature of Other Work on Hand: 192
• Retained Percentages: 193
• Maintenance Guarantees: 194
• Penalty for Delayed Performance: 196
• Subletting of Parts of Contract: 197
• Consulting Engineers in Contract Departments: 198
• Bid or Proposal Bonds: 201
• Supply Bonds: 203
• AnnualGuarantee Bonds: 204
• DEPOSITORY BONDS 150 Reason for Bond: 206
• Private Depository Bonds: 207
• Private Banks and Bankers: 208
• A Desirable Line of Business 154 General Financial Conditions Extremely Important: 209
• Recoveries Gratifyingly Large: 210
• Depository Underwriting in General: 211
• The Underwriters OpenSesamePerhaps: 212
• 158: 214
• Real Estate Furniture and Fixtures: 216
• Cash and Cash Items 161 Capital Stock and Surplus: 217
• Amount of Deposits: 219
• Borrowed Money: 220
• Stockholders Liability: 221
• ClearingHouse Examinations: 224
• Preferred Deposits 167 OneMan Banks: 225
• Determining General Character of Management: 227
• Cancellability of the Bond: 230
• Some Depository Losses Inevitable: 231
• FIDUCIARY BONDS 171 Primarily Fidelity Risks: 233
• A Fundamental Underwriting Classification 173 Appointment of Administrator: 234
• Duties of Administrator: 236
• Appointment and Duties of Executor: 237
• Administrator de Bonis Non 177 Administrator cum Testamento Annexo 178 Administrator cum Testamento Annexo de Bonis: 239
• Ancillary Administrator 180 Temporary and Special Administrators: 240
• Assignee of Insolvent Estate: 241
• Receivers in Litigation 184 Referees and Like Officers for Sale of Property: 242
• Guardian ad Litem 186 Committees Guardians and Conservators of Incompetents: 243
• Guardians and Tutors of Minors: 244
• Trustees under Will or Deed of Trust: 245
• Joint Control Explained: 246
• Thoroughgoing Exercise of the Function Essential: 248
• Uniform Attitude of Companies toward Joint Control: 249
• Three Fundamental Underwriting Considerations: 250
• Cancellation Evidence: 252
• PAGE: 253
• Termination of Liability upon Initiative of Surety: 257
• THE CUSTODY OF COLLATERAL SECURITY 196 Importance of the Subject: 259
• Rules for the Care of Collateral: 260
• Laxity of Agents Regarding Collateral Security: 265
• PROHIBITION BONDS 199 General Considerations: 267
• NonBeverage Alcohol Bonds 201 Brewers of Beer Ale or Porter: 268
• Manufacturers of Cider and Vinegar: 269
• Dealcoholizing Plants 204 Druggists and Pharmacists: 270
• Exporters: 271
• Importers 207 Hospitals Sanitariums and FirstAid Stations: 272
• 60: 273
• Wine Manufacturers 211 Wine Dealers 212 Flavoring Extracts and Syrups: 275
• IndustrialAlcohol Bonds 214 Bonded Warehouses for Industrial Alcohol: 276
• Plants for Denatured Alcohol: 278
• Specially Denatured Alcohol: 279
• Use of Alcohol by Hospitals Colleges: 280
• Duration of Liability: 281
• Liens on Plants and Warehouses: 282
• LICENSE AND PERMIT BONDS 220 When Required in General: 284
• Jitney Bonds: 285
• Permit Bonds for Oil and Gas Prospectors 223 Boxing Licenses: 287
• Commission Merchants 225 BlueSky Law Bonds: 288
• Steamship Agents 227 InsuranceCompany StateLicense Bonds: 289
• Cigarette Dealers: 290
• MilkHandlers License Bonds: 291
• CustomHouse Bonds: 292
• SPECIAL CLASSES OF SURETY BONDS: 295
• AUTOMOBILECONVERSION BONDS: 313
• InclusionofAllCars Requirement: 319
• Are Some Underwriting Problems Unsolvable?: 325
• Opportunity for Important Constructive Action: 332
• 259: 336
• SUGGESTIONS TO AGENTS: 338
• Agents Violations of Underwriting Authority: 344
• 267: 347
• Importance of Diversifying Ones Lines: 350
• APPENDIX TABULAR INDEXFIRST AID TO AGENTS: 357
• 75: 359
• 84: 361
• 233: 364

Popular passages

Page 224 - Each stockholder of a corporation, or joint-stock association, shall be individually and personally liable for such proportion of all its debts and liabilities contracted or incurred, during the time he was a stockholder, as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock, or shares of the corporation or association.‎

Page 224 - Montana. Nebraska. Nevada. New Hampshire. New Jersey. New Mexico. New York. North Carolina. North Dakota. Ohio. Oklahoma. Oregon. Pennsylvania. Rhode Island.‎

Page 145 - The devil was sick, the devil a monk would be ; The devil was well, the devil a monk was he.‎

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Page 291 - States, for the payment of which, well and truly to be made and performed, we bind ourselves, our heirs, executors and administrators, jointly, severally and firmly by these presents.‎

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Page 282 - ... the written consent of the owner of the fee, and of any mortgagee, judgment creditor or other person having a lien thereon...‎

Page 235 - next of kin," includes all those entitled, under the provisions of law relating to the distribution of personal property, to share in the unbequeathed...‎

Page 99 - Perhaps a more accurate way of putting it would be to say that...‎

Page 185 - Bagehot's constitutional monarch, the annual party conference has the right to be consulted, the right to encourage, and the right to warn.‎

Bibliographic information

• Title: Surety Bonds: Nature, Functions, Underwriting Requirements
• Author: Edward Clark Lunt
• Publisher: Ronald Press, 1922
• Original from: the New York Public Library
• Digitized: Dec 15, 2006
• Length: 370 pages