9-2211.   Bonding requirements; minimum net worthrequirements.(a) Each applicant or licensee who maintains a bonafide office shall file with the commissioner a surety bond in the amountofnot less than $50,000, in a form acceptableto the commissioner,issued by an insurance company authorized toconductbusiness in this state, securing the applicant's orlicensee's faithfulperformance of all duties and obligations of alicensee meeting the followingrequirements:

      (1)   The bond shall be payable tothe office of the statebank commissionerand shall be in an amount established by the commissioner by rules andregulations adopted pursuant to K.S.A. 9-2209, and amendments thereto;

      (2)   the terms of the bond shall provide thatit may not be terminated without 30 days prior written notice to thecommissioner, provided that such termination shall not affect the surety'sliability forviolations of the Kansas mortgage business act occurring prior to the effectivedate of cancellation and principal and surety shall be and remain liable for aperiod of two years from the date of any action or inaction of principal thatgives rise to a claim under the bond; and

      (3)   the bond shallbe available for therecovery of expenses, fines and fees levied by the commissioner under this act,and for losses or damages which are determined by the commissioner to havebeen incurred by any borrower or consumer as aresult of the applicant's or licensee's failure tocomply with therequirements of this act.

      (b)   Each applicant or licensee who does not maintaina bona fide officeshall comply with both of the following:

      (1)   File with the commissioner a surety bondin the amount of not less than $100,000, in a form acceptable to thecommissioner, issued byan insurance company authorized to conductbusiness inthis state, securing the applicant's or licensee'sfaithful performance ofall duties and obligations of a licensee meeting thefollowing requirements:

      (A)   The bond shall be payable to the office of thestatebank commissioner and shall be in an amount established by the commissionerbyrules and regulations adopted pursuant to K.S.A. 9-2209, and amendmentsthereto;

      (B)   the terms of the bond shallprovide thatit may not be terminated without 30 days prior written notice to thecommissioner; and

      (C)   the bond shall be available fortherecovery of expenses, fines and fees levied by the commissioner under this act,and for losses or damages which are determined by the commissioner to havebeen incurred by any borrower or consumer as aresult of the applicant's or licensee's failure tocomply with therequirements of this act;

      (2)   Submit evidence that establishes, to the commissioner's satisfaction,that the applicant or licensee shall at all timesmaintain a minimum networth of $50,000. Evidence of net worth shall include the submission of abalance sheet accompanied by a written statement by an independent certifiedpublic accountant attesting that the balance sheet has been reviewed inaccordance with generally accepted accounting principles.

      History:   L. 1999, ch. 45, § 10;L. 2001, ch. 88, § 11;L. 2005, ch. 144, § 5;L. 2009, ch. 29, § 10; July 1.