NASBP 2008 HIGHLIGHTS: THE YEAR IN REVIEW

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The considerable efforts of its Members, Affiliates, and staff make the make the National Association of Surety Bond Producers a dynamic, multidimensional organization that is singularly devoted to representing the interests of bond producers by strengthening professionalism, expertise, and innovation in surety and advocating its use worldwide. Eight words— Lead, Educate, Network, Advocate, Inform, Connect, Participate, and Invest — are thematic of the myriad actions that NASBP undertakes to pursue its mission. Using these words as guides, read on to learn how NASBP volunteers and staff have been applying their talents in 2008.

Lead

• Elected NASBP’s 2008-2009 officers that include NASBP President, William F. Maroney, Senior Vice President of City Underwriting Agency, Inc., Lake Success, NY.
• Sponsored and delivered a presentation at the meeting of the Associated General Contractors of America (AGC) Federal & Heavy Construction Division in Washington, DC, which had more than 250 attendees including representatives from seven federal agencies.
• Negotiated an agreement with AGC on a ConsensusDOCS™ bond form license. The agreement enabled NASBP to offer Members and Affiliates use, at no fee, all eleven ConsensusDOCS™ bond forms in PDF format that permit completion of the forms in designated blank areas.
• Provided the NASBP President’s comments on today’s surety trends and insights into the producer’s role in helping contractors obtain bonding for industry publications, such as Engineering News-Record magazine and Construction Executive magazine, a publication of the Associated Builders and Contractors, Inc.
• Expanded the NASBP Career Center, which celebrated its one-year anniversary in November, to include more than 100 resumes of job seekers who want employment with a surety or insurance agency or company. Provided Members and Affiliates 25% off the price of all packages posted at the NASBP Career Center from April to July.
• Held a joint meeting with Associated General Contractors of America (AGC) and The Surety & Fidelity Association of America (SFAA) to plan industry initiatives and to map agendas for 2009 joint meetings that will address surety and related topics.
• Initiated discussion with the Managing Director of the American Institute of Architects (AIA) Documents Program to solicit consideration of a “stop gap” amendment to the A312 Payment Bond to mitigate concerns arising from recent legal decisions.
• Presented the 2008 NASBP Bruce T. Wallace award to John L. Hannum, retired ICW Executive, for his 40 years of commitment and dedication to the industry.
• Handled numerous member requests by furnishing information and analysis on myriad topics, including Little Miller Acts, licensing statutes, liability of public officials who fail to require a statutory bond, and subcontractor default insurance.
• Developed a stand-alone web site for the Surety Underwriter Intern Program that will house information supported by the three cosponsors of the Program including the Associated General Contractors of America, the NASBP, and The Surety & Fidelity Association of America.
• Implemented a new strategic direction for SIO, the entity that provides resources to increase awareness and use of contract surety bonds in the private sector. The executive committees of NASBP and The Surety & Fidelity Association of America worked with the Surety Information Office (SIO) Policy Board to identify this new direction.

Educate

• Conducted another sold-out offering of the January/February Levels I and II William J. Angell Surety Schools to 129 students.
• Offered Level II classes for the first time during the August William J. Angell Surety School, which usually has only Level I classes. Total attendance at this sold out event was 140.
• Organized a fall offering of the Level I class that was held in Atlanta, Georgia.
• Held a comprehensive risk management workshop, entitled “Analyzing Risk and Understanding the Bid Process,” with a record-breaking attendance of over 60 surety professionals. This NASBP workshop provides insight into a contractor’s experience managing risk when deciding on and bidding jobs. Two offerings of this important program are planned for 2009.
• Invited Dr. Scott MacDonald, President and CEO of the Southwestern Graduate School of Banking Foundation, to make a presentation on commercial credit and current economic conditions at each Regional Meeting.
• Offered educational sessions on current issues at the Regional Meetings that included ethical obligations of a surety professional, emerging issues in the surety industry, and indicators that CPA’s believe signal that a construction company may be in trouble.
• Held two commercial surety interest group sessions at the Regional Meetings.
• Offered audio conferences on ConsensusDOCS™ Documents and contract provisions including the: BIM Amendment (301), Tri-Party Agreement (300), and lump sum agreement and general conditions (200), Subcontracts, and bonds and insurance. Members and Affiliates receive discounted registration rates on ConsensusDOCS™ audio conferences.
• Posted to the NASBP web site new articles on risk issues in bond forms and project agreements and on the ConsensusDOCS™ Documents including articles from Construction Business Owner magazine, titled “Contract Terms and Conditions from a Surety Perspective” and “Know Your Bond Before You Sign.” The co-authors of the articles are NASBP’s General Counsel and Director of Government Relations and SFAA’s Director of Underwriting and Assistant Counsel.
• Published Pipeline issues that focused on key producer concerns, such as an article on letters on “bondability” (also called “sunshine”or “good guy letters”) and recent legal case law interpreting federal regulations governing individual sureties.
• Published an article with the American Bar Association on various forms of dispute mitigation and resolution addressed in ConsensusDOCS™ documents. The article was written by the NASBP General Counsel & Director of Government Relations.
• Created a resource center on the NASBP web site providing information and materials on developments concerning the American Institute of Architects A312 and EJCDC C-615 payment bond forms including published amendments and revisions. The center includes a joint press release issued by the American Institute of Architects, NASBP, and The Surety & Fidelity Association of America on the AIA interim bond form.

Network

• Held the NASBP Annual Meeting in Miami Beach, Florida, which was attended by more than 700 individuals and included networking events, presentations, and educational sessions. In conjunction with the meeting, coordinated an Expo where 17 companies provided information about their products and services.
• Held four successful Regional Meetings that included: Regions 8, 9, 10 & 11—Summer Meeting held in Naples, Florida; Regions 4, 5, 6 & 7 held in Grapevine, Texas; Regions 1, 2 & 3 held in Park City, Utah; and Regions 8, 9, 10 & 11—Fall Meeting held in Newport, Rhode Island.
• Provided a panel of speakers at two of the Regional Meetings that addressed the following topics: the recent release of ConsensusDOCS™ including the Building Information Modeling (BIM) Addendum, the new AIA 2007 construction agreements and general conditions documents, and the AIA A312 Payment Bond interim revision.
• Met with executives of Chubb Group to discuss the surety industry and best practices of underwriters and bond producers. This is the fourth year that an NASBP President and Leadership have met with executives of a surety company. In previous years, NASBP Presidents chose to meet with Zurich, Safeco, and CNA.
• Presented The Surety & Fidelity Association of America (SFAA) with a NASBP Board Resolution that congratulated SFAA on the occasion of its 100th Anniversary. Also, held a joint officers’ meeting with SFAA to discuss current industry issues and initiatives.
• Met with the President of the Associated Specialty Contractors, Inc. (ASC) to discuss issues of interest between NASBP and ASC.
• Participated in the annual meeting of the Transportation Research Board of the National Academies by presenting on the topic of how public owners can improve their relationships with sureties.
• Obtained a discounted rate for NASBP Members and Affiliates to attend the American Bar Association (ABA) Construction Industry Forum that focused on the new ConsensusDOCS™ documents. The NASBP General Counsel participated as a panelist for one of the sessions.
• Presented at a seminar aimed at familiarizing contractors, insurance professionals, attorneys, and others in the construction industry with ConsensusDOCS™. The event was sponsored by the Professional Women in Construction and Washington Building Congress.
• Met with the new President and Chief Executive Officer of the Construction Financial Management Association (CFMA) to discuss industry issues shared by the associations.

Advocate

• Convinced both the Engineers Joint Contract Documents Committee (EJCDC) and the American Institute of Architects (AIA) to recognize concerns of NASBP Members and Affiliates over recent court decisions interpreting their payment bond forms and to issue interim revisions to those bond forms in an effort to address such concerns.
• Visited with members of Congress to acquaint them with the interests of surety bonding and small business.
• Initiated a dialogue with the Office of Federal Procurement Policy on two matters with respect to the present surety bonding regulations and procedures governing federal construction procurement.
• Working with the Conference of State Bank Supervisors to understand and address implementation of bond requirements in Title V of the Housing and Economic Recovery Act of 2008.
• Met several times with executive staff of the U.S. Small Business Administration (SBA) Surety Office of Guarantees to improve their understanding how sureties and bond producers operate in the commercial market, to discuss regulatory reforms so that the requirements of the Surety Bond Guarantee Program comport with the prevailing commercial practices of sureties, and to discuss regulatory enhancements to the Bond Guarantee Program.
• Created the “2008 NASBP Top Federal Priorities,” a tool for Members and staff to use to protect and advance the interests of bond producers and of suretyship when meeting with members of Congress and others.
• Developed position statements and legislative analyses on various state measures and the practice of suretyship and provided these via the NASBP government relations e-bulletin, titled Focal Point, direct e-mail notifications, and presentations made by NASBP at industry meetings.
• Organized grassroots campaigns and provided analysis to oppose state legislative measures that would waive bonding requirements or increase payment and performance bonding thresholds. Provided Members model letters and points to voice their opposition to these measures in writing and in person.
• Provided PowerPoint presentations for each Regional Meeting to address Government Relations legislative and regulatory issues and trends impacting the bond product and the surety community.
• Coordinated testimony in opposition to proposed Rhode Island legislation that would create a new “bad-faith” cause of action against sureties.
• Monitored the investigation being conducted, at the request of NASBP, by the California Deputy Attorney General of the discriminatory requirement that certain commercial surety bond forms be physically executed in California.
• Provided the Government Accountability Office (GAO) with past correspondence between NASBP and the Overseas Building Operations (OBO) of the U.S. Department of State concerning OBO practices with respect to bonding overseas construction projects to assist GAO with its investigation of OBO construction practices.
• Worked with local chapters and national offices of contractor and subcontractor organizations to alert them to state and federal legislation impacting the construction risk environment and suretyship.

Inform

• Delivered a teleconference to more than 220 participants that addressed the American Institute of Architects’ Payment Bond Form, A312, and why recent legal decisions have sureties concerned about the form. Afterwards, posted the audio file of the recording for Members and Affiliates to download from http://www.nasbp.org at their convenience.
• Notified Members of state and federal legislative and regulatory information and provided alerts of adverse legislation upon which to take action through the NASBP government relations e-newsletter, titled Focal Point.
• Apprised Members of NASBP’s numerous accomplishments in 2007 and the breadth of NASBP Member benefits by producing and mailing Members the 2007 Highlights —The Year in Review and the new NASBP membership brochure with the 2008 membership dues renewal letters and invoices.
• Delivered a presentation by NASBP Immediate Past President on obtaining bonding in light of the lending/financial crunch at the Associated General Contractors of America June Building Division Meeting. Representatives of large general contractors, large private owners, and public owners attended the presentation.
• Provided the headquarters of the U.S. Army Corps of Engineers, upon their request, NASBP Members’ perspective of the impact that the economy and the financial crisis is having on the contractor and subcontractor communities.
• Participated in a web seminar that addressed the insurance provisions and the bond forms of the ConsensusDOCS™ library. An NASBP Member participated as a panelist for this presentation.
• Announced and provided information about the release and how to obtain the new ConsensusDOCS™ Document 301, Building Information Modeling (BIM) Addendum.
• Alerted Members to state legislative measures that would relax regulatory oversight of persons acting as sureties in Virginia and Maryland.
• Alerted Members of California of proposed legislation that would have raised the payment bond threshold from $5,000 to $100,000 on awarded public works contracts.
• Alerted Members to the U.S. Court of Appeals for the Ninth Circuit opinion striking down the Nevada countersignature law and how the State of Nevada did not appeal the decision in Council of Insurance Agents and Brokers and Rebecca Restrepo v. Alice A. Molasky-Arman, Nevada Commissioner of Insurance, making that decision final. The Ninth Circuit decision affirmed the trial court ruling that Nevada’s countersignature statute is unconstitutional, violating the Privileges and Immunities Clause of Article IV of the U.S. Constitution.
• Posted a web site page with resources and information on the American Institute of Architects’ A312 Payment Bond to help Members and Affiliates understand concerns about this widely used payment bond form for private construction.
• Provided the “State of the Industry” outlook at the Annual Meeting which was based on results of a survey of the NASBP Leadership and from interviews with surety company CEO’s about the current market.
• Published the results of the 2008 NASBP Information Technology Survey. Member key contacts or their information technology representatives completed the survey, which helps Members assess their information technology needs for the upcoming year.
• Announced the October Association for Cooperative Operations Research and Development (ACORD) Forum that provides business and technical information for implementing ACORD standards.

Connect

• Surveyed Members about risk management and insurance issues to gain insight how the new Risk Management and Insurance Committee can function as a resource to surety professionals.
• Surveyed surety companies to determine their satisfaction with various NASBP activities, forums, and resources.
• Sponsored the Associated General Contractors of America (AGC) Building Division meeting in January where the NASBP Second Vice President provided an assessment of the current surety market to attendees.
• Conducted a joint officers’ meeting between NASBP and the American Subcontractors Association, Inc. (ASA) to identify and to discuss issues of mutual interest, such as subcontractor default insurance, industry standard bond forms, and “sunshine” letters, among other topics.
• Working with the Associated General Contractors of America and The Surety & Fidelity Association of America to identify and formulate strategies for implementation in 2009 to ensure preservation of the Miller Act bonding requirements and clarification of federal regulations addressing bonding.
• Conducted a survey to gauge the level of Member interest in commercial surety topics of which NASBP’s Commercial Surety Committee may provide training or education.
  Also, inquired as to Member preferences how this training would be delivered.
• Placed surety underwriter interns with host contractors through the Surety Underwriter Intern Program, co-administered by the NASBP, the Associated General Contractors of America, and The Surety & Fidelity Association of America. The Program helps underwriters gain first-hand experience of a contractor’s daily business operations.
• Invited the Administrator of the Miami-Dade County Department of Small Business Development to attend the NASBP Annual Meeting and to participate in the NASBP Government Relations Committee meeting by sharing his successes and challenges in helping small businesses.
• Assisted the U.S. Navy Small Business Program in Washington D.C. in beginning a dialogue with Members to explore ways to assist small businesses in Guam with respect to obtaining bonding.
• Contacted the American Institute of Architects (AIA) concerning the revisions schedule for AIA A312 bond forms and reiterated NASBP’s offer of assistance during that process.
• Worked with the American Insurance Association to review and to consider ways in which to strengthen regulations governing insurers in Guam.
• Worked jointly with industry partners The Surety & Fidelity Association of America and the American Insurance Association in analyzing and taking action on various legislative measures that impact bond requirements.
• Recommended that Members attend the International Risk Management Institute, Inc. (IRMI) 2008 Construction Risk Conference that provides information on current issues in managing and insuring construction risk.
• Announced the availability of free samples of select documents from the ConsensusDOCS™ library at the http://www.consensusdocs.org site.

Participate

• Provided a presentation on the surety bond market at the Surety Bonding and Risk Management Committees’ meeting of the Associated General Contractors of America (AGC) in Longboat Key, Florida. The NASBP President made the presentation.
• Presented, “Surety Bonds and Bonding Requirements: Reading Between the Lines,” during the American Subcontractors Association, Inc. (ASA) Annual Business Forum and Convention. The NASBP First Vice President made this presentation.
• Participated in a panel discussion on “Bonding Capacity” and presented a program on “Surety, An Industry Overview: Where We Are and Where We’re Going” to more than 80 attendees of a seminar provided by the Philadelphia Chapter of the Construction Financial Management Association.
• Delivered a presentation on the role and importance of surety bonding to the American Association of State Highway and Transportation Officials (AASHTO) meeting held in August in San Antonio, Texas. The NASBP Industry Relations Committee Vice Chairman made the presentation.
• Polled SuretyPAC contributors to nominate federal Congressional Candidates to whom the SuretyPAC should consider making a monetary distribution for the general elections. Then, distributed funds to those candidates approved by the SuretyPAC.
• Participated in meetings of the drafting committee of ConsensusDOCS™ on various documents, including a subcontract form for federal projects.
• Participated in a task group to review the qualifications required of neutral parties who perform as arbitrators for the American Arbitration Association (AAA), on mediation and arbitration procedures for the construction industry.
• Discussed alternative dispute resolution initiatives in the construction industry with the National Construction Disputes Resolution Committee, an industry advisory body to the American Arbitration Association (AAA), on mediation and arbitration procedures for the construction industry. Promoted the November AAA Construction Mediation Conference.
• Responded to the Department of Agriculture’s request to set up a meeting with surety representatives through NASBP to explore the possibility of bonding rural projects for the production of cellulosic ethanol. Met with two Department officials and discussed the functioning and operation of performance bonds.
• Participated in a first-of-its-kind academic study being conducted by Clemson University’s Department of Construction Science and Management that seeks to elicit information and data on the use of subcontractor bonds and of subcontractor default insurance. Identified resources jointly with the Foundation of the American Subcontractors Association to assist in this research study.
• Contributed to an article in Engineering News-Record magazine on market changes. The NASBP President provided the association’s view of recent ownership changes of surety companies.
• Furnished information and quotes for an article on NASBP involvement with ConsensusDOCS™ documents for Electrical Contractor magazine that has a circulation of more than 85,000 Electrical Contractors.
• Continued participation in and promotion of ConsensusDOCS™ documents to the membership and public during the William J. Angell Surety Schools and the NASBP Risk Workshop, as well as, through http://www.nasbp.org and the e-newsletter, Pipeline.
• Continued Financial Support of TRIP, a national transportation research group that promotes transportation policies that relieve traffic congestion, improve road and bridge conditions, improve air quality, make highway travel safer and enhance economic productivity to government and other decision-makers.

Invest

• Initiated a strategic planning process with the NASBP leadership and staff to examine possible directions NASBP may undertake to enhance NASBP’s strengths and to respond to marketplace opportunities and challenges.
• Worked with small and emerging contractors in New York to acquaint them with the business processes and procedures needed to qualify for surety credit.
• Undertaking drafting a revision of The Basic Bond Book, a unique industry resource jointly drafted in 1993 with the Associated General Contractors of America.
• Hired an Assistant Director of Federal and State Relations to further enhance coverage of federal and state issues of concern to NASBP and its membership.
• Hired an Assistant Director of Educational Programming to assist with the expanding Professional Development efforts of the association.
• Conducted a campaign to promote the 5-15 Leadership Circle to all Members to expand participation in the program.
• Expanded and upgraded the instructional materials for the William J. Angell Surety School through the work of the Professional Development Committee.
• Contributed to The Surety Foundation’s Surety Industry Scholarship Fund that provides financial assistance to exceptional undergraduate students who might consider surety and fidelity bonding as a professional career.
• Sponsored the Associate in Fidelity and Surety Bonding (AFSB) Distinguished Graduate Award, which was presented to the graduate who obtained the highest cumulative grade average on this degree’s exams. Since 1988, NASBP has supported the renowned Institutes, also known as the American Institute for Chartered Property Casualty Underwriter (AICPCU) and the Insurance Institute of America (IIA).
• Displayed print advertisements in Construction Executive and Engineering News-Record magazines promoting the services and expertise of NASBP producer Members.
• Finalized and added forms to the NASBP Producer’s Tool Kit that include the: Bank Credit Reference Form, Credit Report Authorization and Privacy Disclosure Form, Status Inquiry Form, Service/Supply Contractor Questionnaire, and Financial Statement Analysis. The Tool Kit is managed by the NASBP Automation and Technology Committee.
• Created fill-in PDF documents of Consensus-DOCS™ bond forms that provide the convenience of allowing Members and Affiliates at no charge to utilize Consensus-DOCS™ bond forms and to electronically insert text into the blanks of the forms.
• Began converting the Producer’s Tool Kit forms to fill-in pdf documents to provide Members and Affiliates more convenience and timesaving when completing these forms.
• Launched the 2008 NASBP Online Expo located at http://www.nasbp.org/expo to provide information about the industry’s top products and services throughout the year.
• Assessed Member online needs for pre-employment screening, filter protection services (from spam e-mail), e-mail encryption solutions, and best practices in securing documents.

Previous Years:
2007 Highlights

2008 Highlights (Adobe PDF File)