Surety Bond Requirement

PURPOSE: This rule establishes the minimum surety bond coverage a credit union must carry for protection of its assets (see section 370.235, RSMo, for statutory provisions). (1) All credit unions are required to carry a surety blanket bond with the types and amounts of coverage required to qualify for and maintain, if required, federal share insurance as stated in National Credit Union Association (NCUA) Rules and Regulations, Part 713, and in addition must provide for faithful-performance-of-duty coverage for any officer or employee. (2) The board of directors of each credit union shall, at least annually, carefully review the bond coverage in force to determine its adequacy in relation to risk exposure and to minimum regulatory requirements and shall document this review in the board of directors’ minutes. (3) All credit unions must use a basic bond form that has been approved by the NCUA board unless prior written approval has been acquired from the director. (4) All credit unions should maintain increased coverage above the minimum required in section (1), equal to the greater of either of the following amounts within thirty (30) days of discovery of the need for such increase: (A) The amount of daily cash plus anticipated daily money receipts on any of the credit union’s premises; or (B) The total amount of the credit union’s money in transit in any one (1) shipment. (C) Increased coverage is not required when the credit union temporarily increased its cash fund because of unusual events which cannot reasonably be expected to recur. (5) Any aggregate limit of liability provided for in a surety blanket bond policy must be at least twice the single loss of liability. This requirement does not apply to optional insurance coverage. (6) The maximum amount of deductible may not exceed the limit stated in NCUA Rules and Regulations, Part 713. PROFESSIONAL REGISTRATION (7) For purposes of this regulation, the term surety bond is synonymous with the term fidelity bond. AUTHORITY: section 370.100, RSMo Supp. 2011.* This rule originally filed as 4 CSR 100-2.030. Original rule filed Jan. 15, 1968, effective Jan. 25, 1968. Amended: Filed Sept. 14, 1972, effective Sept. 24, 1972. Amended: Filed Dec. 15, 1975, effective Dec. 25, 1975. Amended: Filed Sept. 30, 1996, effective March 30, 1997. Moved to 20 CSR 11002.030, effective Aug. 28, 2006. Amended: Filed April 29, 2008, effective Nov. 30, 2008. Amended: Filed May 14, 2012, effective Nov. 30, 2012. *Original authority: 370.100, RSMo 1939, amended 1945, 1945, 1949, 1959, 1967, 1972.