2006 Louisiana Laws - RS 40:700.7 — Surety bond

§700.7.  Surety Bond

A.  Every dealer permitted under the provisions of this Sub-Part shall maintain with the secretary of the Department of Health and Hospitals a surety bond in the amount of ten thousand dollars.  Each bond shall be issued by a surety authorized to do business in Louisiana, and shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the dealer's violation of law or breach of contract.  Recovery hereunder shall in no event exceed the amount of the bond.

B.  In lieu of the bond required by Subsection A of this Section, a dealer may deposit with the secretary of the Department of Health and Hospitals a certificate of deposit issued by a financial institution doing business in this state and insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, and pledge it to the state of Louisiana for the benefit of any customer who suffers any damage or loss as a result of the dealer's violation of law or breach of contract.  The certificate shall be in the amount of the bond required under Subsection A of this Section.  Any interest from the certificate of deposit shall be payable to the dealer.  If the state or a customer obtains a final judgment against the dealer which must be satisfied from the proceeds of the certificate of deposit, any penalty arising from premature payment of the certificate of deposit shall be paid by the dealer and not subtracted from the face amount of the pledged certificate.

C.  The state or any person claiming against the bond may maintain an action for damages or other relief against the principal or the surety, or both.  The liability of the surety for all breaches of the conditions of the bond provided herein shall in no event exceed the amount of the bond.

D.  The dealer shall file any bond required of him with the secretary before doing any business in this state, including advertising or soliciting.

E.  The term of a bond required by this Section shall be continuous.  The surety on said bond may terminate the bond upon giving a sixty-day written notice to the secretary and the principal; however, the liability of the surety for the acts of the principal shall continue during the sixty-day period.  The notice shall not release the surety from liability which accrues before the termination becomes final, but which is discovered after that date.

Added by Acts 1983, No. 507, §1.