House Journal: Page 1343: Monday, April 23, 2001
26 subsection 1, but the seller must comply with section
27 523A.201 for any purchase agreements executed on or
28 after the effective cancellation date of the earlier
29 surety bond and prior to the effective date of the
30 later surety bond.
31 b. Within sixty days after the effective
32 cancellation date of the surety bond, the seller shall
33 submit to the commissioner an undertaking by another
34 surety company that a substitute surety bond meeting
35 the requirements of subsection 1 is in effect and that
36 the liability of the substitute surety bond extends to
37 all outstanding purchase agreements of the seller that
38 were executed but not performed or extinguished prior
39 to the effective date of the substitute surety bond,
40 or the seller shall submit to the commissioner a
41 financial statement accompanied by an unqualified
42 opinion based upon an audit performed by a certified
43 public accountant licensed in this state certifying
44 the total amount of outstanding liabilities of the
45 seller on purchase agreements subject to this chapter
46 and proof of deposit by the seller in trust under
47 section 523A.201 of either the amount specified in
48 section 523A.201, including interest as set by the
49 commissioner based on the interest which would have
50 been earned had the funds been maintained in trust,
Page 23
1 with respect to all of those outstanding purchase
2 agreements or, where applicable, that delivery of
3 merchandise has been made in compliance with section
4 523A.404. The surety may require such security as is
5 necessary to comply with this section. Upon
6 compliance by the seller with this paragraph, the
7 surety company canceling the surety bond shall cease
8 to be liable with respect to any outstanding purchase
9 agreements of the seller except those purchase
10 agreements with respect to which a breach of condition
11 occurred prior to cancellation and for which timely
12 claims were filed.
13 4. Section 523A.202, and, to the extent it is
14 applicable, section 523A.206, apply to sellers whose
15 purchase agreements are covered by a surety bond
16 maintained under this section, and section 523A.202
17 continues to apply to any purchase agreements of those
18 sellers that are not covered by a surety bond
19 maintained under this section.
20 5. Upon receiving a notice of cancellation of a
21 surety bond, the commissioner shall notify the seller
22 of the requirements of this chapter resulting from
23 cancellation of the bond. The notice may be in the
24 form of a copy of this section and sections 523A.201
© 2001 Cornell College and
League of Women Voters of Iowa
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