Effective July 25, under the new rules, sureties are allowed to charge current state rates rather than being locked into rates that were set 20 years ago as required under the former regulations. Beneficiaries of the new rule are small and emerging contractors needing access to surety bonds so that they can bid on public construction projects.
In a joint statement issued by the AIA and SFAA, the organizations said, “The Surety Bond Guarantee Program needs to be a “Go To” market for small and emerging contractors without a surety bond history, to gain access to the bond market. Without an effective SBA program, there could be a proliferation of individual state and federal agency bond program that vary greatly in funding and procedures. A myriad of different programs would be an enormous administrative burden for surety companies and their producers and likely would not generate widespread participation. We commend the SBA for promulgating this rule and we look forward to encouraging sureties and agents to actively participate in the program.”
AIA is the leading property/casualty insurance trade organization, representing 350 insurers that write more than $123 billion in premiums each year. AIA member companies offer all types of property/casualty insurance, including personal and commercial auto insurance, commercial property and liability coverage for small businesses, workers' compensation, homeowners' insurance, medical malpractice coverage, and product liability insurance.