Surety bond of association.
1. Every association shall maintain bond coverage with a bonding company which is acceptable to the Commissioner and the Federal Deposit Insurance Corporation for an amount to be determined by the Commissioner not to exceed 5 percent of the total assets of the association, nor for an amount greater than $3,000,000, covering all directors, officers, employees, agents, data processing service firms and all other operating hazards that are normally covered under the bond. The bond must be in the form known as Standard Form No. 22, its equivalent or some other form which may be acceptable to the Federal Deposit Insurance Corporation and the Commissioner. The bond coverage may allow for a deductible amount or provision adopted under Title 12, Code of Federal Regulations, Section 563.19(a), (b) and (c), and under any subsequent amendments thereto.
2. A true copy of the surety bond must be placed in the custody of the Commissioner and the original maintained in the office of the association at all times.
3. The surety bond must provide that a cancellation thereof, either by the surety company or by the insured, does not become effective until 10 days’ notice in writing is first given to the Commissioner, or unless he earlier approves the cancellation in writing.
4. When requested by the Commissioner, the association shall provide a duplicate copy of the invoice showing that the bond premium has been paid or satisfied.
5. The face amount of the surety bond must comply with the requirements of the Federal Deposit Insurance Corporation.
Last modified: February 26, 2006