Notes

The 2-Minute Rule for Surety - Insurance Broking & Risk Management - Marsh


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<h1 style="clear:both" id="content-section-0">The 6-Second Trick For What is a Surety Bond? Surety Bonds Explained<br><img width="493" src="https://740452.smushcdn.com/1260619/wp-content/uploads/2020/07/bonds-2.jpg?lossy=1&amp;strip=1&amp;webp=1"><br></h1>
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<p class="p__0">Law 6901(a)( 1 )(A)(Mc, Kinney 2000). Truths: Mr. A is the President of ABC Co., a financing company situated in New york city, which is not an insurance business. Mr. A describes a circumstance in which an individual demands a loan from his company. Instead of issuing the loan, ABC Co. directs them to a financial organization that, in turn, issues the loan.</p>
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<p class="p__1">would then ensure the loan under a surety bond, for a fee. Mr. A wish to understand whether these activities would make up doing an insurance business, for which licensing would be needed. Analysis: Mr. Reference asked whether ABC Co. would be doing an insurance company within the meaning of N.Y.</p>
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<p class="p__2">Law 1101 (Mc, Kinney 2000 &amp; Supp. 2002). N.Y. Ins. Law 1102(a) (Mc, Kinney 2000) prohibits anyone, firm, association, corporation or joint-stock business from doing an insurance company in this state, unless licensed as an insurer or exempted from licensing. N.Y. Ins. Law 1101(b)( 1) (Mc, Kinney 2000 &amp; Supp.</p>
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<h1 style="clear:both" id="content-section-1">What Does Bonding &amp; Surety Services - McGriff Insurance Do?<br></h1>
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<p class="p__3">(emphasis supplied) Subparagraphs (C), (D) and (E) are not appropriate to this conversation. N.Y. Ins. Law 1101(a)( 1) (Mc, Kinney 2000 &amp; Supp. 2002) defines "insurance agreement" as follows: (a)( 1) [A] ny agreement or other transaction whereby one party, the "insurance company", is obligated to confer advantage of budgeting worth upon another party, the "insured" or "beneficiary", reliant upon the occurring of a fortuitous event in which the guaranteed or beneficiary has, or is expected to have at the time of such occurring, a product interest which will be adversely affected by the happening of such event.</p>
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<p class="p__4">Ins. Law 1101(a)( 2) (Mc, Kinney 2000 &amp; Supp. 2002) defines "fortuitous occasion" as "any incident or failure to occur which is, or is assumed by the parties to be, to a substantial level beyond the control of either party." In accordance with the above, if ABC Co. guarantees the bank that it will pay the loan due to the financial default of a customer, such activity would constitute doing an insurance coverage organization, for which licensing would be needed.</p>
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