2005 Annual Meeting & Expo: Bigger and Better Than Ever!

Program Information On NASBP’s 2005 Annual Meeting Available on Web Site

NASBP’s 2005 Annual Meeting & Expo will take place April 10 – 13 at the Manchester Grand Hyatt in San Diego, California. For more information and to register for the meeting, please visit NASBP’s web site at www.nasbp.org/am05/index.cfm.

Should you have questions, please contact Jennifer Wilson at (202) 464-1178.

NASBP Offers Expo at Annual Meeting

NASBP will host its 6th Expo in as many years, offering Annual Meeting attendees a one-of-a-kind venue to explore and learn about the latest industry products and services. Attendees had an opportunity to test drive, discuss and purchase products and services, network with their peers and find solutions to their issues. The Expo Hall will once again include  an Internet Cafe, where attendees can grab a beverage and snack while checking their email messages.

2005 Annual Meeting & Expo – List of Exhibitors

(as of January 25, 2005)

ABC Construction Executive Magazine

AMS Services, Inc.

Beneco, Inc.

Blair Business Systems

Construction Industry CPAs Consultants Association (CICPAC)

Construction Financial Management Association (CFMA)

Contractor Business Resources, Inc.

FMI Corporation

Funds Administration Services, LLC

Granite Loan Management

InSure Vision Technologies, LLC

Lexington National Insurance Corporation

SAFECO Insurance Companies

Surety Information Office (SIO)

The Road Information Program (TRIP)

U.S. Small Business Administration

Workgroup Technology Partners

For more information about exhibiting, please contact Susan DeCourcey at (202) 464-1177.

  NAIC Adopts Model Legislation Calling for Broker Disclosures:  Industry Reaction Mixed Regarding Application to All Producers

On December 29, 2004, the National Association of Insurance Commissioners (NAIC) adopted model legislation that would implement new disclosure requirements so that consumers have the necessary information to understand the manner in which brokers are compensated for the sale of insurance products.  The model legislation amends NAIC’s current Producer Licensing Model Act.

Section A of the Model Act requires brokers to disclose the amount of compensation from the insurer and the method for calculating the compensation, including any contingent compensation.  In cases where the contingent commission is unknown, brokers would provide a reasonable estimate of the amount and method for calculating compensation.  The model legislation is available to legislatures as they consider options for addressing broker compensation during this year’s state sessions.

In addition, NAIC postponed consideration of controversial language in Section B, which would have required disclosure by all producers, including independent agents and salaried employees of direct response companies.  Several commissioners expressed concern over the impact of imposing costly and unnecessary new disclosure requirements on every insurance producer.  The controversial section was returned to the NAIC task force to be reviewed and reworked.

Industry Reaction to Model Legislation Mixed

NAIC adoption of the model language led to a range of reactions from industry trade groups.  The following comments represent some of the associations’ opinions:

Council of Insurance Agents & Brokers (CIAB): President Ken Crerar said on December 3, 2004, “We applaud the NAIC for moving swiftly to provide a regulatory proposal to strengthen the disclosure of broker compensation arrangements, and we wholeheartedly agree with the approach that has been presented.”

Property Casualty Insurers Association of America (PCI): After NAIC voted to adopt the model act, PCI, like other associations, criticized Section B for being too inclusive and casting an overly wide net that goes far beyond the problem at hand.  According to Robert Zeman, Senior VP for Industry and Regulatory Affairs, “Throughout the debate, PCI has supported and urged regulators to focus on targeted and relevant disclosures by brokers, to address the specific issues uncovered by the ongoing investigations. The requirements for written consent and disclosures of specific compensation amounts and methodologies, coupled with the potential for overly broad application, fail to meet these goals.”

Independent Insurance Agents & Brokers of America (IIABA, the Big “I”): In a letter dated January 21, 2005, Robert Rusbuldt, CEO, and Wesley Bissett, Senior VP for Government Affairs and State Relations, wrote to NAIC indicating, “IIABA strongly opposes the addition of proposed Subsection (B). The provision, which has the broadest possible scope, would impose unnecessary generic disclosure obligations on every insurance agent and broker in the country and offer questionable benefit to consumers in the process…we oppose any attempt to indiscriminately burden the entire producer community with such dubious and costly requirements.”

National Association of Professional Insurance Agents (PIA National):  On January 7, 2005, PIA National reiterated its opposition to the model law and vowed to continue working to secure changes to improve the deeply flawed model.  PIA National Executive Vice President and CEO Len Brevik, said,  “PIA National and the PIA state and regional affiliate organizations stand united in opposition to the model, and will exercise that opposition at the both the state and the federal levels.”

National Association of Mutual Insurance Companies (NAMIC):  In comments filed with the NAIC on January 19, 2005, Peter A. Bisbecos, Director of Legal and Regulatory Affairs, said, “NAIC efforts to address concerns surrounding broker compensation continue to be over-broad, going beyond the single problem that has been defined.”  NAMIC stressed “the solution to the defined problem, when a producer receives compensation from both parties, is appropriate… but that other problems remain the product of allusion and should not be the subject of legislation.  NAMIC urged NAIC to, “suspend further consideration of Section B.  Absent specific evidence, supporting this measure is unjustified.”

National Council of Insurance Legislators (NCOIL): On December 30, 2004,

Rep. Craig Eiland (TX) announced NCOIL’s priorities for the coming year.  He indicated that among the issues NCOIL would be considering is, “Consideration of proposals regarding broker compensation and disclosure, with emphasis on broker duties and responsibilities, strong enforcement mechanisms, and concentration on brokers rather than agents.”

Pipeline will continue to provide updates as NAIC addresses the controversial section that requires disclosure by all producers and report on any states that decide to pursue the model legislation during this year’s state sessions.

Nominations Open for NASBP’s 2005 Advocacy, Policymaker Awards
Please click on the links to submit nominations for NASBP’s Excellence in Advocacy Award and Policymaker of the Year Award. The Advocacy Award recognizes members and affiliates who have made significant contributions to the Association and the surety industry by influencing decisions favorable to surety in the public policy arena, while the Policymaker Award recognizes elected or appointed government officials who have been friends to surety bond producers and/or the surety industry. Both awards will be presented at the NASBP Annual Meeting in April and have the following requirements:

                                      Nomination

Excellence in Advocacy Award
Employees of NASBP member agencies or surety company affiliates who spearheaded a particular advocacy effort may self-nominate their initiative for consideration of this award. Other members or affiliates not directly involved but knowledgeable about an initiative also may submit nominations.

Policymaker of the Year Award
Public officials, elected or appointed, serving at any level of government, may be nominated. Two recommendations must accompany each nomination. Employees of member agencies or affiliate surety companies are eligible to nominate a policymaker, but at least one of the two recommendations must come from a member agency. Preferential consideration will be given to nominees recommended by both a member agency and an affiliate company.

Criteria

Excellence in Advocacy Award
Individuals nominated for this award must have been involved in a collaborative effort of surety producers and surety company representatives as well as participants of other related industries. Nominated efforts also must have included one or more of the following activities or similar activities not expressly listed below:

·    Advocated on behalf of the surety industry before state or local policymakers or groups of policymakers;

·    Sought legislation, regulations, or policies that promoted suretyship; or

·    Championed the resolution of an issue or issues of particular concern to surety professionals.

Policymaker of the Year Award
Nominees for this award have engaged in one or more of the following activities or taken similar action not otherwise listed below:

·    Advocated on behalf of the surety industry.

·    Sponsored or co-sponsored legislation that promoted suretyship

·    Held public hearings regarding surety or surety related issues.

·    Provided support or counsel regarding proposed public policies advocated by the surety community.

·    Championed the resolution of an issue or issues of particular concern to surety professionals.

A complete explanation of the criteria and electronic nomination forms are available by clicking on the links to the awards above. The nominator and co-nominator must complete the electronic form no later than the close of business on Friday, February 18, 2005. Questions or comments should be directed to Connie Lynch, Director, Government Relations, or Colin Chiles, Government Relations Coordinator, at clynch@nasbp.org or cchiles@nasbp.org or at 202/686-3700.

  Opportunity and Preparation Combine to Reform Construction in MA
By Jack Curtin

Tip O’Neill, the late speaker of the U.S. House of Representatives, once said, “Luck is the meeting of opportunity and preparation.” In 2004, this cliché was embodied in the successful effort of the construction and surety industries in Massachusetts in getting legislation passed, which represents the most significant reform of construction procurement laws in the Commonwealth in 25 years.

Reform was necessary because public construction in MA, particularly public school construction, was a mess! Owners blamed their problems on contractors and architects, who in turn blamed everything on each other as well as those administering contracts.

What appeared to create the most problems was the use of the following system:

· 18 or so subcontractor trades bid their work anywhere from 1-2 weeks prior to the bid deadline;

· General contractors (GCs) were given a list of the filed subcontractors;

· GCs listed on their bid forms the name of the subcontractor and his/her price for each of the trades filed;

Under MA law, an owner had to pay the cost for any bond for any GC and any of his/her filed subcontractors on a given project. This process meant that a GC had no way of knowing the cost of the subcontractor’s bond to reflect with his/her own bid.

As Chairman of AGC‘s Legislative Committee and as the Chair of the MA Construction Industry Council (MCIC), I had long advocated for a change in the law that would require that all filed subcontractors be bonded rather than leaving it to the discretion of GCs.

GCs embraced the idea, but what was surprising was that the subcontractors did not oppose it. What they feared, however, was that the Legislature would eliminate the filed subcontractor system and its protection from bid shopping.

When Gov. Mitt Romney took office, he listened to members of the MA Municipal Association (MMA) who said that the method of procuring construction services in the Commonwealth needed to be changed. The Governor and others embraced the concept of design-build as the best alternative to design–bid–build, because it appeared to offer the owner a single point of contact and accountability for any construction project.

Those of us at AGC and MCIC had debated the use of design-build over the years and didn’t feel that was always appropriate for a wide range of projects. We did agree, however, that construction management-at risk (CM-At Risk) offered a better alternative, because it, (1) puts the selection of the construction manager at the beginning of the procurement process; and (2) requires communication among the architect, constructor, and owner before plans are finalized, subcontractors are procured, materials are bought, and issues of scheduling, “constructability,” and budgets are addressed.

A coalition of representatives of the Associated General Contractors of Massachusetts, Associated Subcontractors of Massachusetts (ASM) and the Boston Society of Architects (BSA) met for several months to draft proposed legislation. Although competing interests often were evident, the group committed itself to compromise wherever it could to not impair the basic principles of the participating organizations.

The group recognized the need for a gatekeeper to determine where the use if CM-At Risk would be appropriate. Those in charge of public construction did not want that role, but the group eventually persuaded the Inspector General (IG) to write regulations to govern the procedures by which cities and towns would apply for permission to use CM-At Risk.

Since the construction trade unions always are a potent political force in MA, we sought out their leaders and their support. The meetings were particularly interesting, because the unions recognized that the current system was not functioning smoothly. They also recognized that prequalification and bonding of subcontractors would elevate the quality of subcontractors for whom their members would be working.

With the support of the unions, MCIC, AGC, ASM, the IG, and the Division of Capital Asset Management (agency administering construction of state buildings), the group set out to bring the MA Port Authority (Massport) into the fold as well as the Associated Builders and Contractors (ABC) and Construction Industries of MA (CIM, the heavy and highway constructors). The group even secured MMA’s support.

Members of the Legislature knew about our efforts and presented us with a gift: The creation of a Commission to write a construction reform bill. Although there was some political jockeying for non-legislative membership, representatives of every member of the coalition were named to the Commission. The Governor appointed Massport as his representative. Sen. Diane Wilkerson, a minority Senator representing a largely minority district in Boston, was one of the co-chairs. Sen. Wilkerson also chaired the Senate side of a joint committee of the Legislature, so she had a full understanding of all of the issues.

The membership of the Commission was rounded off with the addition of a representative each from the MA Chapter of the National Association of Minority Contractors, the MA Chapter of Women in Construction, and MMA.

The Commission took six months longer that anyone anticipated, but we got what we wanted. Had it not been for the establishment of the Commission and the political mass created by the coalition, we may not have prevailed. We got our mandatory bonding of the trades, formerly designated as filed subcontractor trades, on all CM-At Risk projects and on any design-bid-build jobs between $100,000 and $10,000,000 in which the owner elected to prequalify the contractors, and on all projects in excess of $10,000,000.

Because all the stakeholder groups understood the legislative process, the participants:

1. Decided what was in the common good for both the construction industry and taxpayers;

2. Agreed upon on a bill on which there was a consensus; and

3. Built a broad based coalition.

Had none of those actions been taken, the Legislature, left to its own devices, would have probably fallen far short of the comprehensiveness of what actually passed.

The other states are no different than Massachusetts–political action is not easy but, by the same token, if we understand how politics works, we can all be effective if we so choose.

Jack Curtin is Pres/Treas of Curtin International Insurance and Bonding Agency in Lexington, MA. He served as the Association’s president in 1987-88 and is a dedicated member of the Association’s Government Relations Committee. He may be reached at:
johncurtin@mindspring.com.

  Briefly Noted

  POSITIONS 

CAPITOL INSURANCE COMPANIES is seeking a Commercial Surety Underwriter for its Atlanta, GA office.

·     Responsibilities:  Ensuring underwriting growth and profitability by underwriting new and renewal business as well as managing agency relationships.

·     Requirements:  Bachelor’s Degree, or equivalent, plus 3-5 years surety experience; completed or working towards Associate in Fidelity & Surety Bonding (AFSB) designation. Knowledge of bonds, procedures and rates as well as knowledge of specified territory including agency plant, accounts, competition and general business climate. Strong underwriting and marketing skills; excellent interpersonal and communication skills. Ability to think analytically, problem solve, and utilize word processing and spreadsheet software.

·     Contact:  Hayley Hellenbrand, Staffing & Training Specialist at 608/232-5504, e-mail jobs@capitolindemnity.com or fax resume to 608/231-0067. Visit www.capitolindemnity.com for more company information. EOE
INSCO DICO GROUP is seeking to fill the following positions in its respective offices:

Irvine, CA (Home Office) – Sr. Claims Examiner

·     Responsibilities:  Responsible for all phases of claims examination on assigned files with particular emphasis on miscellaneous, subdivision and performance and payment bonds using investigative techniques to determine the validity of claims assigned.

·     Requirements: Minimum of 5 years experience in all phases of surety claims, including: contract, performance, license and permit bonds. B.A. in a business-related field preferred. Effective communication and organizational skills are essential.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Irvine, CA–Claims Examiner

·    Responsibilities:  Responsible for all phases of claims examination on assigned files with particular emphasis on miscellaneous, subdivision and performance and payment bonds using investigative techniques to determine the validity of claims assigned.

·    Requirements: Minimum of 2-3 years experience in all phases of surety claims, including: contract, performance, license and permit bonds. Experience with legal research and a B.A. in a business-related field preferred. Effective communication and organizational skills are essential.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions

Atlanta, GA – Underwriter

·     Responsibilities:  Underwriting and servicing complex surety bonds, and developing business through marketing calls and participation in industry associations and functions.

 ·     Requirements: Minimum of 2-3 years of surety underwriting experience.  Requires  strong analytical, organizational and communication skills. Requires a Bachelors Degree in business administration, finance or related field.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Atlanta, GA – Underwriting Assistant

·     Responsibilities:  Provides direct administrative/clerical assistance with processing bond requests, facilitating workflow, and maintaining financial files.

·     Requirements:  Must have a high school diploma and preferably 2-3 years of related general office/administrative experience in a finance-related area, preferably in the surety industry. Must be detail oriented, organized and have a good working knowledge of computer operations and possess a Notary Public license, or obtain a license.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Ft. Lauderdale, FL – Senior Underwriter

·     Responsibilities:  Underwriting and servicing complex surety bonds, and developing business through marketing calls and participation in industry associations and functions.

·     Requirements: Minimum of 4-5 years of surety underwriting experience.  Requires strong analytical, organizational and communication skills. Requires a Bachelors Degree in business administration, finance or related field.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Glendale, CA – Assistant Branch Manager  

·     Responsibilities:  Underwriting and servicing complex surety bonds, and developing business through marketing calls and participation in industry associations and functions.

·     Requirements: Minimum of 4 years of surety underwriting experience. Requires strong analytical, organizational and communication skills. Requires a Bachelors Degree in business administration, finance or related field.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Glendale, CA – Underwriter

·     Responsibilities:  Underwriting and servicing complex surety bonds, and developing business through marketing calls and participation in industry associations and functions.

·     Requirements: Minimum of 2-3 years of surety underwriting experience. Requires strong analytical, organizational and communication skills. Requires a Bachelors Degree in business administration, finance or related field.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions.

Portland, OR – Senior Underwriter

·     Responsibilities:  Underwriting and servicing complex surety bonds, and developing business through marketing calls and participation in industry associations and functions.

·     Requirements: Minimum of 4-5 years of Surety underwriting experience. Requires strong analytical, organizational and communication skills. Requires a Bachelors Degree in business administration, finance or related field.

·     Contact:  Visit the company’s website at www.inscodico.com. Go to the employment page and contact HumanResources@InscoDico.com for instructions. 

MERCHANTS BONDING COMPANY is seeking a contract bond underwriter for the Austin, TX branch office.

·     Responsibilities:  Individual will be required to solicit and underwrite contract surety business in Texas and eight southeastern states. Individual should have experience in the entire contract surety underwriting process including financial analysis and risk assessment. Candidate should have experience working with accounts of all sizes.

·     Requirements:  Minimum 2 to 4 years experience in contract bond underwriting.  Travel throughout southeast is required.

·     Contact:  Send resume to kwilliamson@merchantsbonding.com

CNA SURETY CORPORATION, one of the largest U.S. surety companies, currently has Underwriting opportunities in the following locations:

·     Albany, NY – Underwriting Support

·     Columbus, OH – Underwriting Consultant

·     Hartford, CT – Underwriting Consultant

·     Phoenix, AZ – Underwriting Consultant

·     Quincy, MA – Underwriting Technician

·     Silver Spring, MD – Underwriting Consultant

·     Troy, MI – Underwriting Manager

·     Contact:  Rick Shapren, Human Resources Coordinator, via e-mail richard.shapren@cnasurety.com, or fax resume to 312-755-3737.  Visit www.cnasurety.com for more company information. EOE

  State Revenues Up for ‘05; Budget Outlook Slower to Improve

According to “The Fiscal Survey of States” released by the National Governors Association (NGA) and the National Association of State Budget Officers(NASBO), state finances are finally showing improvement after the most severe fiscal downturn since The Great Depression. The National Conference of State Legislatures (NCSL) reports that revenues for the first months of FY 2005 have been at or above projections across the country. Twenty-six states already have raised their revenue projections.

Only three states are reporting revenues below forecasted projections for FY 2005: Michigan, New Jersey, and Tennessee. The New Jersey situation is expected to improve quickly this spring when money from a new tax increase gets added.

To achieve FY 2005 balanced budgets 24 states enacted tax and fee changes resulting in $3.5 billion in increased revenues, while in FY 2004 36 states used tax and fee increases to raise revenues by $9.6 billion. Stateline.org provided the following examples from FY 2005:

· Cigarette and tobacco taxes in 10 states – AL, AK, AR, MI, NV, NJ, NY, OK, RI and VA – $888.4 million.

· Sales tax increases in seven states – AL, CA, IL, NM, NY, RI and VA – $710 million.

· Personal income taxes increases in nine states – AZ, CA, CT, IL, MD, MA, NM, RI and VA – $428.5 million.

· Corporate income taxes went up in seven states – IL, MD, MA, NJ, NY, RI and VA – $272 million.

Number of States with… FY 2003 FY 2004 FY 2005

Source: National Conference of State Legislatures, December 2004

Unfortunately, increasing health care costs will put pressures on state budgets for FY 2006. Medicaid for the first time has surpassed spending on elementary and secondary education. NGA Executive Director Raymond C. Scheppach said, “Medicaid is now trumping education and will continue to do so.” He added, “state policymakers will be forced to make the decision between funding health care and education, but not both.”

With Medicaid funding issues on the horizon, FY 2006 is shaping up to be a challenge for state lawmakers trying to achieve balanced budgets. Louisiana must find a way to plug an estimated $1.9 billion hole in the Medicaid budget for FY 2006, while Mississippi faces a $266 million gap and Alabama expects to fall $127 million short.

In Tennessee cuts have already been made to the state’s health plan, TennCare, for the poor and uninsured. In order to save the program 323,000 adults will be dropped. The plan is intended to save $575 million in FY 2006, but even with the cuts TennCare’s costs are expected to rise by $75 million.

State legislatures will have to make tough funding choices this year as they compile their FY 2006 budgets. According to Stateline.org the following states project the largest budget shortfalls for FY 2006:

· California – $9 billion

· Connecticut – $1.2 billion

· Illinois – $1.4 billion

· Indiana – $800 million (two-year budget)

· Massachusetts – $600 million

· Michigan – $400 million

· Minnesota – $700 million (two-year budget)

· New Jersey – $4 billion

· New York – $4 billion

· Ohio – $1.4 billion to $2 billion (two-year budget)

· Oklahoma – $500 million (two-year budget)

· Oregon – $1 billion (two-year budget)

· Wisconsin – $1.6 billion (two-year budget)

· Washington – $1.8 billion (two-year budget)

Continued improvement in the national economy will help states in the long run, but budget pressures need to be addressed immediately to achieve balanced budgets. While the situation has increased considerably since Pipeline began reporting on budget shortfalls in 2002, there are still many hard funding decisions to be made before states truly return to a healthy fiscal forecast.

  Changes to the T-List

The Department of the Treasury’s Listing of Approved Sureties (Circular 570) has been updated as follows:

Added to the Listing of Approved Sureties
Platinum Underwriters Reinsurance, Inc., Effective 12/9/04.

Liquidation of Formerly Certified Company
American Bonding Company; Terminated 9/19/94, Liquidated 10/8/04

For more information, go to: http://fms.treas.gov/c570/c570.html and http://fms.treas.gov/c570/supplements.html.

  Monitoring 2005 State Legislation in Your State

Most state legislative sessions kick-off in January. To obtain a calendar outlining all of the 2005 state legislative sessions, please Click Here.

NASBP members and affiliates can access updates on 2005 legislative activity by visiting the “Member and Affiliates Only” section of the NASBP Web site at http://www.nasbp.org/membersonly_files/memlogin.cfm. Login and click on “Government Relations” and then “Bill Tracking 2005.” When asked for your User ID and Password, simply enter the same information used to access the “Member and Affiliates Only” section. Instructions on how to use the service are provided on the Web page. Also, a cumulative list of the bills tracked during 2004 is available by following the instructions above and then clicking on “Bill Tracking 2004.”

  NASBP Welcomes New Members and Affiliate

NASBP welcomes the following new Members and Affiliate who have joined the Association since the last issue of Pipeline.

NEW MEMBERS

Gusso Surety Bonds
2307 W. 57^th Street, Suite 100
Sioux Falls, SD 57108
Key Contact: Jason Gusso

ISU St. Charles Insurance
4600 Executive Centre Pkwy.
St. Peters, MO 63376-1671
Key Contact: Steve Heying

Preferred Bonding & Insurance Services
1800 McCollum Street
Los Angeles, CA  90026
Key Contact: Patricia Zenizo
www.preferredbonding.com

Surety Solutions Insurance Services
1046 Houston Circle
Folsom, CA 95630
Key Contact: John T. Page
www.surety1.com
NEW AFFILIATE

Endurance Reinsurance Corporation of America
333 Westchester Avenue
3^rd Floor- West Building
White Plains, NY 10604
Key Contact: Laura A. Shanahan
www.endurancereusa.com

    SIO: Glancing Back & Looking Forward

Disclaimer: This information is provided for educational and informational purposes only and is not intended to serve as legal advice. Readers are cautioned to consult their legal counsel on any specific matters.

With 44 states currently in session, and all 50 states holding sessions this year, some interesting developments are taking place with legislation addressing such issues as alternative project delivery, bond thresholds, and bond waivers. Although many bills surface each year, it is helpful to compare states with similar initiatives on what appear to be the hot legislative topics of the day. Below is a sampling of some of these bills that have surfaced this year.

The bills listed below are just some of the bills that NASBP considers a priority in the 2005 legislative session. The bills marked with a plus (+) mean that NASBP is or will be working closely with its State Government Relations Coordinators by asking them to try to amend some of the bill language or to monitor the bills to ensure that they are not amended in ways that may be harmful to the surety industry. State Coordinators then are to organize statewide grassroots activity if a bill needs to be supported or opposed. NASBP relies upon its members and affiliates and its relationships with its surety and construction partners, AGC, ASA, AIA, and SAA, to take an active role in influencing bills of concern to the industry.  To see the bill language, please click on the links for the bills listed below. Additionally, please contact Connie Lynch, Director, Government Relations, at (202) 686-3700 ext. 1313 or clynch@nasbp.org if you have any questions about the bills listed.

To help you monitor bills that concern or relate to the surety industry, visit NASBP’s ”Member and Affiliates-Only” section of the website at http://www.nasbp.org/membersonly_files/memlogin.cfm. Login and click on “Government Relations” and then “Bill Tracking 2005.”  When asked for your User ID and Password, simply enter the same information used to access the “Member and Affiliates Only” section.

Alternative Project Delivery:  D-B, CM, and Best Values
An onslaught of alternative project delivery bills for public construction has been introduced into the 2005 sessions. This may be the result of public owners pushing for more options to help them speed up the construction process, reduce costs, and ensure quality. Whether or not all these options will provide the desired results for public owners, the possibility of doing so is giving these bills a boost.

Some of the issues that arise when these bills are introduced are very important for the surety industry. For example, many new bills fail to properly define project delivery systems such as design-build, CM At-Risk, or CM-Agency. This may lead you to ask why this is important, but it is at the core of the definitions where bond requirements are established. Because these bills concern public projects, many may assume bonds are required; however, in some cases the bond requirement is not clearly defined or the new language fails to be applicable to the state “Little Miller Acts.”

·       Design-Build and/or Construction Management

CA A 508 – Design-Build

+ CA A 533 – Construction Management

CA S 287 – Design-Build

CT S 858 – Design-Build

+ IL H 1067 – Design-Build

+ IN S 244 – Design-Build

+ KS H 2394 – Construction Management/Design-Build

+ MT H 699 – Construction Management/Design-Build

+ NH H 263 – Construction Management/Design-Build

NJ A 631 – Design-Build

+ NM S 265 – Construction Management

NM S 897 – Design-Build

+ NM S 952 – Construction Management

+ OK H 1564 – Construction Management/Design-Build

·       Best Value Contracting

+ KS H 2394

+ TN H 135

+ TN S 1114

Bond Thresholds/Waiving Bonds for Contract Surety
An increase in the number of bills introduced during the 2004 state legislative sessions, which would have raised bond thresholds or waived surety bonds, led NASBP to develop a new set of talking points to assist members and affiliates called Reasons Against Increasing Bond Thresholds or Waiving Bonds. The 2005 sessions appear to be a continuation of the effort to either raise bond thresholds or waive bonds. Efforts to either raise bond thresholds or waive bonds may be driven by the belief that this is the easiest way to open bidding opportunities to smaller contractors.

·       Bond Thresholds

+ KY S 109

+ OK H 1770

+ OK S 558

+ OR H 2214

·       Bond Waivers

+ MD S 324

+ WA H 1438

+ WA S 5249

+ WA S 5384

REMINDER: Annual Meeting Hotel Cut-off Date March 16

Make your Manchester Grand Hyatt Hotel room reservations while there is still space available. The cut-off date to receive the NASBP group room rate is March 16, however, the room block could be filled prior to that date! Call the Grand Hyatt Reservation Department at (619) 232-1234 or (800) 233-1234 now to guarantee your NASBP Annual Meeting hotel reservations.

Be sure to visit NASBP’s web site for more Annual Meeting & Expo information.

   No Longer “Business as Usual”

NASBP and iSqFt® Blur Bid Day Practices for Surety Bond Professionals
Citing shared beliefs in the power of advanced online information applications to streamline construction industry processes and eliminate inefficiencies, the National Association of Surety Bond Producers (NASBP) and iSqFt have agreed to a marketing partnership.

iSqft’s Internet Plan Room is a secure, business web service providing bond producers, subcontractors, suppliers, professional estimators and allied construction professionals with online access to project information, plans and specifications for publicly-bid construction projects. Subscribers can conveniently view public plan room projects 24 hours a day, seven days a week from their home, office or remote location via the Internet. Powerful search and query capabilities enable projects to be quickly identified that meet specific geographic or other criteria of interest.

“Tools such as these have had a tremendous impact in other industries,” NASBP president Craig Hansen observed, “and we recognized the potential this opportunity afforded us to enable our members to deliver significant value to their customers.

“What’s more, iSqFt’s track record of success, and its growing acceptance across the breadth of the construction industry, provided us with the comfort that this would be a relationship that would continue to provide benefits for both our organizations for some time to come,” Hansen added.

In their book, Blur – the Speed of Change in the Connected Economy, Stan Davis and Christopher Meyer of Ernst & Young’s Center for Business Innovation, argue that global forces of speed, intangibles and connectivity are dramatically blurring and redefining the rules of business. Almost instantaneous communication and computation are shrinking time and focusing us on speed. Connectivity is putting everybody and everything online in one way or another and has led to “the death of distance.” Intangible value of all kinds, like service and information, is growing explosively, reducing the importance of tangible mass. [1]

The NASBP and iSqFt will be giving Surety Bond professionals an opportunity to turn Davis and Meyer’s concept into practice. According to Dave Conway, iSqFt President and CEO, harnessing the power of the Internet lets his customers reduce expenses and increase their capacity in working with the extensive amount of information that is generated by each construction project. “Our mission is pretty simple. We help our customers streamline and change their work processes; and by doing so they can become more effective and successful,” Conway said. “Making that happen takes a lot of hard work and attention to customer service. Of course it helps to have visionary partners like NASBP who share our passion for providing tools to construction industry professionals that help them excel.”

More information regarding Internet Plan Room, as well as how to receive live demonstrations and free trials will be communicated to NASBP members in the near future.

In October, 2004, iSqFt was named the fastest growing privately held company in the construction industry, and 50th overall, by Inc. magazine in its annual Inc. 500 U.S. business ranking survey.

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[1] Stan Davis and Christopher Meyer, Blur, (Massachusetts: Perseus Books, 1998)

Disclaimer: This information is provided for educational and informational purposes only and is not intended to serve as legal advice. Readers are cautioned to consult their legal counsel on any specific matters.