Surety Bonds Research Articles

Identifying potential impacts of bonding instruments on offshore oil projects

The present paper deals with the potential financial impacts of different bonding instruments on offshore oil projects. Three types of performance bond instruments (corporate surety, leasing-specific abandonment account, and cash) were tested and analyzed for three offshore oil-producing fields under a hypothetical bonding regime. Sensitivity analysis of ‘net present’ and ‘government take’ values indicates corporate surety bonds cause fewer impacts yielding significantly better payoffs. Several related issues are discussed considering government and industry perspectives.

Keeping the Power On: How Reliable Is Our Electric System Under Partial Deregulation?

The competitive market price of electricity will contain two components: (1) the costs of providing optimal reliability, and (2) a price premium that would be analogous to a surety bond that the utility will lose if it fails to provide the optimal reliability reflected in the market price. Analyses of future electricity prices that focus only upon capital, fuel, labor, and other directly observable costs are likely to understate competitive market prices. State regulated transmission companies are unlikely to provide optimal reliability. States should rationalize their electric power markets through deregulated transmission companies.

Home Medical Equipment Issues and the 106th Congress

The Balanced Budget Act of 1997 (BBA) promulgated changes having negative and far-reaching implications for home medical equipment (HME) services including access to care, quality of services, and decimation of an integral part of the health care system. The unexpected results have included closure of an undetermined number of HME providers and serious questions regarding decreased availability of service to Medicare patients. The 106th Congress attempted to address and remedy several of the provisions in the BBA by passing or introducing bills affecting home oxygen therapy, competitive bidding, surety bonds, inherent reasonableness authority, and fraud and abuse.

Administrative Developments: Civil Cause of Action under RICO Requires Tortious Act—Beck v. Prupis

The U.S. Supreme Court held 7-2 that an individual harmed by an overt act that is not tortious under the Racketeer Influenced and Corrupt Organizations Act (RICO) does not have a civil cause of action under RICO. Therefore, an individual terminated from his job in furtherance of a racketeering conspiracy does not have a civil cause of action, since such termination is not an “independently wrongful” act under RICO.The plaintiff, Robert Beck, was the president, CEO, director, and shareholder of Southeastern Insurance Group (SIG). The defendants, including Ronald Prupis, were senior officers and directors of SIG. In 1998, the plaintiff discovered that the defendants were engaged in racketeering. The racketeering activities included refusing to qualify contractors for SIG surety bonds unless they paid fees to SIG; diverting corporate funds for their personal use; and providing regulators, shareholders, and creditors with false financial statements.

The impact of the Balanced Budget Act of 1997 on home healthcare agencies and nurses.

"Medicare home health agencies are facing a regulatory purgatory as measures to reduce home health spending by about $16 billion over five years take effect with little government guidance. Home health providers are grappling with new surety bond requirements, the banning of venipuncture as a qualifying procedure for other home health services, and an interim payment system to scale back reimbursement levels before a prospective payment system takes effect in fiscal year 2000" (Cassil, 1998). The challenges of surviving and conquering all of the current issues facing home healthcare nurses and agencies seem overwhelming. All of these legislative and regulatory issues with the resulting financial and clinical implications are occurring as agency staff and administrators continue to provide quality home healthcare services to patients of all ages. Please share your strategies for meeting the challenges of 1998 with the editor.

State agency response to nuisance wildlife control operator oversight

An 18-question survey was sent to all state wildlife agency directors in an attempt to evaluate state wildlife agencies’ response to administrative oversight of nuisance wildlife control operators (NWCO). Forty-four (88%) of the state wildlife agencies responded to the survey. Almost every state agency responding believes they should promote the growth and privatization of the NWCO industry. They also believe that their agency should provide administrative oversight. There were descrepancies in what agency personnel believe constitute oversight versus what policies are actually implemented. Although most agencies believe NWCO should be licensed, only 56% of states actually require licensing. Most agencies responding believe NWCO should be required to complete an educational program and a written examination prior to receiving a license, currently only 22% require some form of education prior to obtaining a license, and 15% require an examination prior to obtaining a license. Sixty percent of agencies believe NWCO should show evidence of financial responsibility and only 5% of states actually require NWCO to have liability insurance or post a surety bond. Fifty-six percent of the states require NWCO to submit written reports that document the number of each animal species captured (51%), disposition of animals (44%), location of capture animals (34%), release site information (22%), condition of captured animal (7%), and euthanization method (5%). Most states allow nuisance wildlife to be released on both private (90%) and public land (71%). Approximately one-third of agencies have changed laws, policies, or regulations regarding NWCO and 47% of these changes are perceived to be more restrictive of NWCO activities. Most state agencies (78%) allow relocation of nuisance wildlife, but 17% of the states have restrictions on what species can be relocated. The primary reason for not allowing relocation of nuisance wildlife are disease (100%), impacts to resident wildlife populations (45%), humane reasons (18%), and a lack of suitable release sites (9%). These results show that state agencies believe they should encourage the growth and privatization of NWCO industry and that they should maintain administrative oversight.

Principles of Risk Management and Insurance

PART ONE: BASIC CONCEPTS IN RISKMANAGEMENT AND INSURANCE Chapter 1. Risk in Our Society Chapter 2. Insurance and Risk Chapter 3. Introduction to Risk Management Chapter 4. Advanced Topics in Risk Management PART TWO: THE PRIVATE INSURANCE INDUSTRY Chapter 5. Types of Insurers and Marketing Systems Chapter 6. Insurance Company Operations Chapter 7. Financial Operations of Insurers Chapter 8. Government Regulation of Insurance PART THREE: LEGAL PRINCIPLES IN RISK AND INSURANCE Chapter 9. Fundamental Legal Principles Chapter 10. Analysis of Insurance Contracts PART FOUR: LIFE AND HEALTH RISKS Chapter 11. Life Insurance Chapter 12. Life Insurance Contractual Provisions Chapter 13. Buying Life Insurance Chapter 14. Annuities and Individual Retirement Accounts Chapter 15. Individual Health Insurance Coverages Chapter 16. Employee Benefits: Group Life and Health Insurance Chapter 17. Employee Benefits: Retirement Plans Chapter 18. Social Insurance PART FIVE: PERSONAL PROPERTY AND LIABILITY RISKS Chapter 19. The Liability Risk Chapter 20. Homeowners Insurance, Section I Chapter 21. Homeowners Insurance, Section Ii Chapter 22. Auto Insurance Chapter 23. Auto Insurance and Society Chapter 24. Other Property and Liability Insurance Coverages PART SIX: COMMERCIAL PROPERTY AND LIABILITY RISKS Chapter 25. Commercial Property Insurance Chapter 26. Commercial Liability Insurance Chapter 27. Crime Insurance and Surety Bonds

Endorsements, Licensing, and Insurance for Electronic Commerce

The users of systems supporting electronic commerce rely on the service providers with which they transact business. Because such systetms span multiple organizations, It is difficult for users to assess the security and competence of such service providers. This article looks at the issue of confidence in distributed systems. When confidences is lacking in tradional commerce, endorsements, licensing, liability insurance, and surety bonds are used to compensate. We show tht by Incorporating such assurances into distributed sysrems, users are better able to evaluate the risks incurred when using a particular service provider.

Predicting Contract Surety Bond Claims Using Contractor Financial Data

This paper describes the results of a study to predict contract bond claims based upon contractor financial data. Financial statements of 87 contractors (36 claim and 51 nonclaim) were obtained from four companies underwriting construction‐contract surety bonds. A claim contractor was defined as one that defaulted on a bond, many times requiring the surety to pay a loss. A nonclaim contractor was defined as one that has not defaulted on a surety bond. A predictive model was developed using discrete choice modeling. Variables identified in the model are cost monitoring, underbillings/sales, total current liabilities/sales, retained earnings/sales, and net income before taxes/sales. This model predicts the probability of experiencing a claim in the accounting period following the period in which the financial statement was prepared. Considering each variable, recommendations are presented for reducing the probability of claim. Additionally, questions related to the variables have been developed for consideration by the management of construction companies. The model can assist construction‐industry professionals by providing them with a quantitative tool to evaluate contractors.

Trends in Construction Contractor Financial Data

The purpose of this technical note is to describe the results of a study investigating trends in contractor financial data to help predict their likelihood of experiencing a claim. Financial statements of 87 contractors (36 claim and 51 nonclaim) were obtained from four companies underwriting construction contract surety bonds. A claim contractor is defined as one that defaulted on a bond, many times requiring the surety to pay a loss. A nonclaim contractor is defined as one that has not defaulted on a surety bond during the period for which financial data was supplied. The described trends can assist construction industry professionals by providing them with quantitative values of financial variables for both claim and nonclaim contractors.

Local Regulation of Timber Harvesting and Trucking in Georgia

Abstract By early 1992, 49 Georgia counties regulated timber harvesting or trucking activities in their jurisdictions by either a formal ordinance or an informal working policy. As recently as 1988, only 14 counties were known to have such ordinances. All new regulation since 1988 occurred in rural counties. The most common form of regulation requires that a logging permit be obtained or that county officials be notified of an intent to harvest timber. The posting of a surety bond is also a common requirement. Current local regulations in Georgia are summarized in an easily updated field guide, Field Handbook of Local Logging and Log Trucking Regulations in Georgia, that is now available. Regular revisions of the handbook are planned to keep foresters and logging contractors up to date on local regulations in the future. South. J. Appl. For. 17(4):200-206.

The effect of subordinated debt and surety bonds on the cost of capital for banks and the value of federal deposit insurance

The effect of subordinated debt and surety bonds on the cost of capital for banks and the value of federal deposit insurance

The effect of subordinated debt and surety bonds on the cost of capital for banks and the value of federal deposit insurance

This paper examines two proposals to reduce the subsidy to risk-taking embedded in the current deposit insurance system and to protect the deposit insurance fund. The two proposals are (1) requiring banks to issue subordinated debt, and (2) requiring bank stockholders to post surety bonds. We use the cash-flow version of the CAPM [Chen (1978)] to show how each proposal affects the values and rates of return on uninsured deposits and equity. We also find that only if deposit insurance is mispriced can either affect the values of the FDIC claim and the bank.

Surety Bonding and Owner‐Contractor Prequalification: Comparison

In the public sector, contract awards are typically made to the lowest responsible bidder. This term is defined by many contractawarding authorities as the contractor with the lowest bid who provid...

Financial Performance Guarantees: The State of Practice

Abstract Financial performance guarantees are tools for ensuring that funds needed to pay for improvements called for by development permits and approvals are available in the event a developer defaults on permit requirements. Once limited to surety bonds and cash escrows, new types of guarantees have been developed and are coming into common use. Standby letters of credit, in particular, are being used more widely and have a number of advantages. To use guarantees successfully, municipal governments must make careful decisions about a number of administrative matters. Evidence from 309 municipalities reported in this article can help local planners make the right choices.

Russia's Debt to the Mongols in Suretyship and Collective Responsibility

Theterms poruka(suretyship or collective responsibility) andporuchnik(surety, guarantor) rarely appear in pre-Mongol Russian texts. Formal poruka seems to have expanded enormously only after the Mongol invasion. The institution clearly flourished in Muscovite Russia, where q“surety bonds” (poruchnye zapisi) were drawn up to cover debts and contractual obligations, military and administrative service, payment of fiscal levies, obligatory labor, trial procedure, personal conduct, public safety, political allegiance—and even matters of conscience and orthodoxy (“spiritual suretyship”). In all those areas, individuals or groups of people could, as “sureties,” be held responsible for the conduct of others, the “principals.” Sureties faced harsh penalties—fines, forced labor, corporal punishment, and worse—for their principals' misconduct or failure to fulfill certain obligations.

Political Poruka in Muscovite Rus'

Political poruka-the practice of holding others liable for someone's political conduct-existed throughout pre-Petrine Rus' history. It was known in Kievan Rus';1 it flourished during the era of Mongol domination.2 But only in Muscovite Russia did political poruka reach its apex as a refined and wellarticulated system. Moscow's officials now wrote up surety bonds (poruchnye zapisi), documenting specific instances of such suretyship. Perhaps Moscow did not initiate the procedure, but Muscovite surety bonds were much better drafted and far more detailed than anything that has survived from earlier times. The bonds are enlightening. Combining prescribed elements of formal procedure with passages of intimidating rhetoric, they reveal a vital yet little-studied mechanism of Muscovite autocracy. Poruka served various purposes, some of which we shall attempt to identify. We shall also comment on the legacy left by political poruka to other types of surety that evolved later.

住宅保証制度の研究 : アメリカ合衆国の制度

The objective of the study reported herein is to examine the characteristics of the Home Owners Warranty (HOW) Program in the U. S. A. The principal characteristics of the HOW program are summerised as follows ; 1) The HOW program was developed in 1973 by the National Association of Home Builders on the investigation into the NHBC scheme between 1972 and 1973. This program aims not only to protect consumers from defective dwellings but also to supply knowhow of the home building business to the registered builders. 2) The builder's liability continues during one year for all defects of dwellings and two years for defective installations and major structural damages. 3) The insurer covers the repair cost of the major structural damages reported after two years before the expiration of the tenth year. 4) The insurer also covers the repair cost of defects liable to the registered builders in the case of their default. 5) The benefit of the program is assigned to the successive owners. 6) The quality standard of the HOW defines, in a concrete form, the quality level to be attained by the builder, which defines in the same time the defect liable to the builder. 7) The inspection of building process is not done in general by the HOW. 8) The registration of builders is purely voluntary, and offered to the applicant after the examination of the financial stuation, technical ability and reputation of the customers. 9) The insurance is composed of the surety bond in the initial guaranty period and the property insurance for the ten year protection. The payment of the insurer is 4.3 times more than the premium. 10) The dispute is submitted to the HOW's conciliation and, after the failure, reffered to the arbitration under the Expedited Home Construction Rules of the A. A. A.. and finally put on the trial. The registered builders or the insurer must accept the award of the conciliation and the arbitration, but the owner may appeal to the upper stages.

The Legal/Extra-Legal Controversy: Judicial Decisions in Pretrial Release

This study analyzes data for state criminal defendants prosecuted in New York to determine the bases upon which judges make pretrial release decisions for these defendants. Treating statutory law as defining the category of legal variables, it finds legal factors substantially affect decisions about whether to release a defendant on recognizance, the amount of bail required, and whether to offer a defendant a cash alternative to a surety bond. The impact of these factors varies, however, depending upon the particular decision being made. Factors not prescribed in the statute—extra-legal factors—are also found to affect these pretrial release decisions. Their impact, too, is decision context specific. Among the extra-legal factors that affect pretrial release decisions, the effects of status characteristics of the defendant pale in comparison to the effects of bench bias and measures of the defendant's dangerousness.

Proposed change in the AGU bylaws

On May 22, 1980, the AGU Council approved for the first time a change in Bylaw 22. In accordance with Article 12b of the Statutes, proposed amendments to the Bylaws must be published in an AGU publication of general circulation no less than 30 days prior to the second consideration by the Council. The current Bylaw 22 is shown below in its entirety, followed by the Council's recommended change.The General Secretary, in accordance with the instructions of the Council of the Union, shall sign checks on the accounts of the American Geophysical Union and shall provide a surety bond in a sum set by the Council of the Union and at the expense of the Union, for funds of the Union under his control. If the General Secretary is absent or incapacitated, the President or, if he is absent or incapacitated, the President‐elect, shall sign checks against the Union accounts. The General Secretary may delegate the authority to sign checks against the accounts of the Union. The President, the President‐elect, and others with the authority to sign checks shall furnish surety bonds in the same manner and amount as the General Secretary.