CEO Comments

New Resource on Understanding Countersignature Requirements

Every year at the NASBP Regional Meetings I am given the opportunity to provide a presentation on the industry and the association. This year I devoted part of my presentation to answers to questions frequently posed to me or to staff on various surety matters, including the status of resident agent countersignature requirements. Despite the best efforts of many, such requirements continue to vex, popping up throughout the country in state and municipal bid solicitations and continuing the confusion on whether these requirements are legitimate. 

Perhaps these requirements remain in some cases to aid the “home team” of local businesses. More likely, however, they remain simply because an official or design professional is not familiar with the current state of the law on resident agent countersignature requirements or because that person is parroting “what we have always done” in bid solicitations. In either case, resident agent countersignatures are an impermissible restriction on commerce and an undue cost, and education of the parties involved is needed. On the other hand, countersignature requirements permitting licensed agents, resident and nonresident, to countersign are legitimate requirements to demonstrate authentication. It is the resident agent only component of the countersignature requirement that is problematic. 

As the surety industry is profitable and bringing fresh talent into its ranks, newer surety professionals may need a concise treatment of the subject of resident agent countersignature requirements. Martha Perkins, NASBP’s General Counsel, and I prepared a presentation that provides overview information on the history and the current status of countersignature requirements. We prepared this overview in the hope that it could serve as a training resource for firms hiring professionals new to the world of surety. The presentation may be accessed by clicking here.

NASBP continues to educate public owners at all levels about impermissible resident agent countersignature requirements whenever such situations are brought to our attention. Unfortunately, their eradication remains a gradual process, but I am proud to report that NASBP has authored numerous letters over the years to owners on the subject, resulting in almost all instances in their removal. Please go to the NASBP comment letter map on the NASBP website to access these and other action letters.  A recent situation arose with the City of Winter Haven, Florida, which insisted on resident agent signature/countersignature for bid bonds and performance and payment bonds in their general conditions document. A member brought the language to the attention of Martha Perkins, who issued a prompt letter discussing the problem. The letter may be accessed by clicking here. Thereafter, the City removed the requirement. 

I am sure there are many more municipal bidding documents across this country that still contain this anachronistic requirement. Old ways die hard, as they say. If you encounter such requirements, please bring them to our attention, and NASBP will do its best to make them disappear.