Chapter 416: Surety Companies

Fifty percent of the amount received on all outstanding contracts shall be treated as a liability by the insurance commissioner in determining the question of the solvency of any surety company.

The judge, head of department, or other officer authorized to approve the bond of any person required by law to give a bond, may accept as a surety upon the bond any such company which has been licensed to do business in this state, and, if satisfied with the financial ability of the company, he need not require other sureties.

A court or officer, whose duty it is to pass upon the account of any person required by law to give a bond, may, whenever the person has procured any such company as surety upon his bond, allow a reasonable sum for the expense of procuring such surety in the settlement of his account.

Any company which shall execute a bond as surety under the provisions of this chapter shall be estopped to deny its corporate power to execute the instrument or to assume the liability.

No surety company, whether organized under the laws of this or any other state or territory, shall assume any liability as surety on any bond which shall in amount exceed 10 percent of its net assets, without reinsuring in some surety company authorized to do business in this state the amount by which any liability may exceed said 10 percent.

Surety companies organized under the laws of this state shall invest their funds in securities that are legal investments for savings banks, and in such other investments as may be approved by the insurance commissioner.

Any surety company incorporated and organized under the laws of another state, for the purpose of transacting business as surety on obligations, may transact business in this state upon complying with the provisions of all laws relating to foreign insurance companies and their agents, and not otherwise.