[§489D-7]  Bond or other security
device.  (a)  Each application for a license shall be accompanied by a
surety bond, irrevocable letter of credit, or other similar security device
acceptable to the commissioner in the amount of $1,000.  The commissioner may
increase the amount of the bond or security device to a maximum of $500,000
upon the basis of the impaired financial condition of a licensee, as evidenced
by a reduction in net worth, financial losses, or other relevant criteria.



(b)  The security device shall be in a form
satisfactory to the commissioner and shall run to the State for the benefit of
any claimants against the licensee to secure the faithful performance of the
obligations of the licensee relating to the receipt, handling, transmission, and
payment of money in connection with the sale and issuance of payment
instruments or transmission of money.  In the case of a bond, the aggregate
liability of the surety shall not exceed the principal sum of the bond. 
Claimants against the licensee may bring suit directly on the security device
or the commissioner may bring suit on behalf of claimants, either in one action
or in successive actions.



(c)  To meet the requirement of a security
device or of any portion of the principal amount thereof, the licensee may
deposit with the commissioner, or with such banks in this State as the licensee
may designate and the commissioner may approve, cash, interest-bearing stocks
and bonds, notes, debentures, or other obligations:



(1)  Of the United States or any agency or
instrumentality thereof;



(2)  Guaranteed by the United States;



(3)  Of the State, a county, or instrumentality of the
State; or



(4)  Guaranteed by the State,



in an aggregate amount based upon the principal
amount or market value, whichever is lower, of not less than the amount of the
security device or portion thereof.



(d)  The securities or cash deposited pursuant
to subsection (c) shall secure the same obligations as would the security
device, but the depositor shall:



(1)  Be entitled to receive all interest and dividends
thereon;



(2)  Have the right, with the approval of the
commissioner, to substitute other securities for those deposited; and



(3)  Be required to substitute other securities for
those deposited upon a showing of good cause and written order of the
commissioner.



(e)  The security device shall remain in effect
until cancellation, which may occur only after thirty days written notice to
the commissioner.  Cancellation shall not affect any liability incurred or
accrued during the period.



(f)  The security device shall remain in place
for no longer than five years after the licensee ceases money transmission
operations in the State.  Notwithstanding this provision, the commissioner may
permit the security device to be reduced or eliminated prior to that time to
the extent that the amount of the licensee's payment instruments outstanding in
the State are reduced.  The commissioner may also permit a licensee to
substitute a letter of credit or other form of security device acceptable to
the commissioner for the security device in place at the time the licensee
ceases money transmission operations in the State. [L 2006, c 153, pt of §1]