NASBP gets the job done in Maryland!

After learning of instances where individual sureties were placing bonds on private work in Maryland, which is prohibited by law, NASBP sought introduction of legislation (SB 764 (Kelley)/HB 885 (Jameson) in the Maryland General Assembly to establish a specific insurance fraud statute relating to individual sureties. More specifically, the legislation establishes that individual sureties writing bonds on private construction contracts without a certificate of authority are engaging in a fraudulent insurance act, conviction of which carries stiff penalties. On March 26, the Maryland Senate approved SB 764, 46-0. While on April 8, the Maryland House approved the bill 132-0. The measure will be sent to the governor for his signature soon, and NASBP has been invited to participate in the signing ceremony. This bill represents a major accomplishment for the NASBP membership and the surety industry.

SB 764/AB 885 will act as a deterrent to unlicensed persons placing surety bonds on private contracts in Maryland and harming Maryland consumers and businesses. NASBP also will seek in coming legislative sessions to fight any efforts to extend the sunset date on a statutory exception under Maryland law to permit individuals to act as sureties on public works contracts without any oversight by the Maryland Insurance Administration. In order to move the bill out of the Senate Finance Committee, SB 764 was amended, at the request of the Chair, to contain language that requires a study concerning the state of the surety marketplace in Maryland and the use of individual sureties on public projects. The study is not codified language, and the Maryland Insurance Administration may not have the resources to undertake the extensive study as contemplated in the amendment.

Not only did the Maryland Senate Bill Sponsor Senator Delores Kelley recognize the importance of the legislation, she also felt the need to educate small and emerging contractors in her district about the importance of the surety bond product and for her constituents to know where they can turn to for assistance. Thus, on Saturday, October 27, 2012 Senator Kelley, along with NASBP, will host a one-day bonding education program that will offer instructional presentations from leading Maryland experts in construction accounting, construction law, construction lending, and surety bonding. Workshop participants will be offered the opportunity to meet face-to-face with these industry experts as part of the Program. Presenters will include representatives from NASBP, SFAA, members of the Maryland Mid-Atlantic Surety Association, as well as, CPAs and construction attorneys.

NASBP CEO Mark McCallum (pictured above) testified March 2 in support of HB 885 before a hearing of the Maryland House Economic Matters Committee. Also, pictured are Lynn Schubert, President of the Surety & Fidelity Association of America, and Jack Andryszak of Popham and Andryszak, P.A., who also testified.

UPDATE ON SB 764 (Kelley)/HB 885 (Jameson) — Bill Becomes Law MAY 2, 2012

NASBP’s hard work resulted in postive results. On May 2, NASBP participated in the Maryland Governor’s signing ceremony of MD Senate Bill 764 (Kelley)/House Bill 885 (Jameson). The Maryland law represents a major accomplishment for the NASBP membership and the surety industry. The law will act as a deterrent to unlicensed persons who are placing surety bonds on private contracts in Maryland and harming Maryland consumers and businesses.

Pictured below are NASBP Director of Government Relations Larry LeClair (back row second from right) and Jack Andryszak (back row third from right) of Popham and Andryszak, P.A. who participated in the Maryland Governor’s signing ceremony on May 2 for bills passed by the Maryland General Assembly. Maryland Governor Martin O’Malley is sitting second from right.