2006 Code of Virginia § 46.2-1527.9 - Continuous bonding requirements for Fund nonparticipants

46.2-1527.9. Continuous bonding requirements for Fund nonparticipants.

Applicants for a renewal of a motor vehicle dealer's license may elect toobtain and continuously maintain a bond in the amount of $100,000 in lieu ofparticipation in the Motor Vehicle Transaction Recovery Fund, provided thatsuch applicants have not been the subject of a claim against a bond issuedpursuant to 46.2-1527.2, or against the Fund for three consecutive years.The bond shall come from a corporate surety licensed to do business in theCommonwealth and approved by the Attorney General and shall be filed with theBoard. The bond shall be conditioned on a statement by the applicant that theapplicant will not practice fraud, make any fraudulent representation, orviolate any provision of this chapter in the conduct of the applicant'sbusiness. In those cases in which the surety of a dealer electing continuousbonding under this section shall be liable pursuant to this section, themaximum liability to one claimant against the surety by reason of a claiminvolving a single transaction shall be limited to $20,000 regardless of theamount of the claim by one claimant, and the aggregate liability of thedealer's surety to any and all persons, regardless of the number of claimsmade against the bond or the number of years the bond remains in effect shallin no event exceed $100,000.

An applicant for a renewal of a motor vehicle dealer's license who is amember of a nonprofit organization established under 26 U.S.C. 501(c) (6)that provides on behalf of its membership a blanket or umbrella bond in theamount of $1 million satisfies the bonding requirements of this section. Whenposted, a blanket or umbrella bond shall be considered a dealer bond for thepurposes of 46.2-1527.10. The bond shall come from a corporate suretylicensed to do business in the Commonwealth and approved by the AttorneyGeneral and shall be filed with the Board. In those cases in which thenonprofit organization's surety shall be liable pursuant to 46.2-1527.10,the maximum liability to one claimant against the surety by reason of a claiminvolving a single transaction shall be limited to $20,000, regardless of theamount of the claim by one claimant, and the aggregate liability of thenonprofit organization's surety to any and all persons for claims against asingle dealer shall in no event exceed $100,000. In those cases in which thenonprofit organization's surety shall be liable pursuant to 46.2-1527.10,the maximum liability to any and all persons, regardless of the number ofclaims made against the bond or the number of years the bond remains in forceshall in no event exceed $1 million.

The Board may, without holding a hearing, suspend the dealer's license duringthe period that the dealer does not have a sufficient bond on file. Dealersbonded under this article and those salespersons employed by such dealersshall be exempt from the Fund fees specified in 46.2-1527.1.

(2003, c. 331.)