09.03.06.15

.15 Bonds, Letters of Credit, and Trust Accounts.

A. A bond, letter of credit, or trust account established to meet the requirements of Financial Institutions Article, §11-508, Annotated Code of Maryland, shall be structured and maintained so that it is available for and subject to claims for 1 year following the expiration of the period for which it is issued.

B. A separate bond coverage, letter of credit, or trust account shall be obtained for each licensing period.

C. Restitution awarded and to be paid from a bond, letter of credit, or trust account shall be paid as follows:

(1) Awards resulting from individual complaints shall be paid in the order in which they are received by the Commissioner;

(2) Awards resulting from an examination by the Commissioner which will exceed the total available under the bond, letter of credit, or trust account, shall be paid on a pro rata basis;

(3) Notwithstanding §C(1) of this regulation, if the aggregate amount of all pending claims exceeds the amount of the bond, letter of credit, or trust account, the Commissioner may require a prorated distribution.

D. The Commissioner may require part or all of the funds in a letter of credit or trust account to remain on deposit beyond the termination schedule established in this regulation if:

(1) There are unresolved pending claims against the account or letter of credit, which were timely filed; and

(2) The amount required by the Commissioner to be maintained is reasonably calculated to cover the payment of those claims.

E. Claims against a bond, letter of credit, or trust account:

(1) Shall be filed by the claimant if against a:

(a) Surety bond, directly with the surety,

(b) Letter of credit or trust account, with the Commissioner;

(2) Shall be filed in accordance with §E(1) of this regulation within 1 year after the occurrence from which the claim arises;

(3) May not include:

(a) Attorneys' fees,

(b) Damages for personal injury, or

(c) Punitive damages.

F. A surety under a bond issued under Financial Institutions Article, §11-508, Annotated Code of Maryland, shall:

(1) Pay directly to a claimant any meritorious claim; and

(2) Immediately notify the Commissioner when it pays a claim to a claimant.