Application Procedure

(1) Application. Each applicant for a license to engage in the business of making small loans pursuant to M.G.L. c. 140, § 96; a license as a sales finance company pursuant to M.G.L. c. 255B, or a premium finance agency pursuant to M.G.L. c. 255C, or a sales finance company pursuant to M.G.L. c. 255D shall submit a written application on a form prescribed by the commissioner, signed under the pains and penalties of perjury, containing such information as the commissioner may from time to time require. 20.03: continued (2) Requirements. An Applicant shall be required to submit detailed information supporting the following general requirements: (a) Financial responsibility. An Applicant shall demonstrate and provide the commissioner with evidence of the following requirements relative to financial responsibility. For purposes of this section, a review of financial responsibility may include a review of historical net losses, profitability, and any other information that the Commissioner may deem necessary. 1. An Applicant for a license under M.G.L. c. 140, § 96 shall demonstrate that, after all organization and other initial expenses have been paid, it has a net worth of not less than $75,000, and shall provide the commissioner with evidence of its financial responsibility. 2. An Applicant for a license under M.G.L. c. 255B shall demonstrate that, after all organization and other initial expenses have been paid, it has a net worth equal to at least $20,000. The minimum net worth requirement may be waived by the commissioner when a license is being renewed. If the commissioner approves an Applicant under M.G.L. c. 255B, he may, in his discretion, require the Licensee to furnish a bond in a sum not to exceed $10,000 executed by the Licensee and by a surety company approved by the commissioner conditioned upon the faithful performance by the Licensee of the duties and obligations pertaining to the business so licensed. 3. An Applicant for a license under M.G.L. c. 255C or c. 255D shall demonstrate and provide the commissioner with evidence of its financial responsibility. (b) Financial Statements. An Applicant shall submit financial statements prepared in accordance with generally accepted accounting principles meeting the following minimum requirements: 1. Contents. The financial statements shall include, but are not limited to, a Balance Sheet, Income Statement and Statement of Cash, and all relevant notes thereto. 2. Initial Application. a. An Applicant for a license under M.G.L. c. 140, § 96 shall submit financial statements, for the preceding fiscal year which have been either audited or reviewed by an independent Certified Public Accountant. The financial statements must include a statement of condition, an income statement and a statement of cash flows. In the discretion of the Commissioner and under such conditions as he may impose, an Applicant’s unaudited financial statements may be submitted with audited consolidated financial statements of its parent. b. An Applicant for a license under M.G.L. c. 255B, c. 255C, or c. 255D shall submit audited financial statements for the preceding fiscal year if such statements were prepared. If audited statements were not prepared, an applicant must submit unaudited financial statements including a statement of condition and income and expense. Unaudited statements must include all supporting schedules and be completed in accordance with generally accepted accounting principles. In addition, the statements must be dated not more than 90 days prior to the date of application and must be signed under the pains and penalty of perjury by an authorized officer of the Applicant. 3. Renewal Application. An Applicant seeking to renew its license under M.G.L. c. 140, § 96; c. 255B; c. 255C; or c. 255D shall submit unconsolidated, entity only financial statements, which have been either audited or reviewed by an independent Certified Public Accountant. The financial statements must include a statement of condition, an income statement and a statement of cash flows. At the discretion of the commissioner and under such conditions as he may impose, a Licensee may submit unaudited entity only financial statements with its parent's audited consolidated financial statements. 4 Filings of Certain Insurance Premium Finance Agencies. The provisions of 209 CMR 20.03(2)(b)2. and 3. shall not apply to an insurance premium finance agency as an applicant or a licensee whose business is exclusively limited to financing its own customers' commercial insurance policies. The Commissioner may consider the goodwill or value placed on insurance renewals or other similar intangible value toward the net worth of such an insurance premium finance agency applicant or licensee. The provisions of 209 CMR 20.03(2)(b)4. shall cease to be effective on December 31, 1998. (c) Character and Fitness. An Applicant shall submit information demonstrating that the Applicant possesses the character, reputation, integrity and fitness to engage in the business of a sales finance company or a premium finance agency in an honest, fair, sound and efficient manner. (d) Business Experience. An Applicant shall demonstrate to the commissioner's satisfaction that the Applicant, and its applicable officers and employees, possess the necessary educational and business experience to engage in the business of a sales finance company or a premium finance agency. (e) Other Information. An Applicant shall submit such other information as the commissioner may deem necessary to properly evaluate an application.