Bond or letter of credit of distributor unsatisfactory; reduction of
cash deposit
Sec. 407. (a) The administrator may require a distributor to file a
new bond or new letter of credit, with a satisfactory surety or
financial institution in the same form and amount if:
(1) liability upon the old bond or letter of credit is discharged
or reduced by judgment rendered, payment made, or otherwise;
or
(2) in the opinion of the administrator any surety on the old
bond or financial institution on the old letter of credit becomes
unsatisfactory.
If the new bond or new letter of credit is unsatisfactory, the
administrator shall cancel the license of the distributor. If the new
bond or new letter of credit is satisfactorily furnished, the
administrator shall release in writing the surety on the old bond or
financial institution on the old letter of credit from any liability
accruing after the effective date of the new bond or new letter of
credit.
(b) If a distributor has a cash deposit with the administrator and
the deposit is reduced by a judgment rendered, payment made, or
otherwise, the administrator may require the distributor to make a
new deposit equal to the amount of the reduction.
As added by Acts 1979, P.L.79, SEC.1. Amended by P.L.97-1987,
SEC.5.
Last modified: May 28, 2006