Find Legal Information

202C.2 - EVIDENCE OF FINANCIAL RESPONSIBILITY -- REQUIREMENTS.

        202C.2  EVIDENCE OF FINANCIAL RESPONSIBILITY --
      REQUIREMENTS.
         1.  A dealer shall provide the department with evidence of
      financial responsibility as required by the department.  The evidence
      of financial responsibility shall consist of a surety bond furnished
      by a surety or an irrevocable letter of credit issued by a financial
      institution.
         2.  The evidence of financial responsibility shall be provided to
      the department before the dealer's license is issued or renewed
      pursuant to section 163.30.
         3.  The amount of the evidence of financial responsibility shall
      be established by rules which shall be adopted by the department.
      Unless the department otherwise has good cause, the rules shall be
      based upon the volume of sales reported by the dealer to the United
      States department of agriculture grain inspection, packers and
      stockyards administration.  However, the evidence of financial
      responsibility shall not be for less than five thousand dollars or
      for more than twenty-five thousand dollars.  The department may
      increase the amount of the evidence of financial responsibility for a
      dealer upon a showing of good cause.
         4.  The evidence of financial responsibility must be conditioned
      upon the dealer's faithful performance of the terms and conditions of
      the sales agreement.  The surety's or issuer's liability extends to
      each such sales agreement executed while the surety bond or letter of
      credit is in force and until performance or the recision of the sales
      agreement.
         5.  The evidence of financial responsibility shall be continuous
      in nature until canceled by the surety or issuer.  The surety or
      issuer shall provide at least ninety days' notice in writing to the
      dealer and the department indicating the surety's or issuer's intent
      to cancel the surety bond or letter of credit and the effective date
      of the cancellation.  The dealer shall have sixty days from the date
      of receipt of the surety's or issuer's notice of cancellation to file
      a replacement.  However, the surety or issuer remains liable for
      damages arising from sales agreements which were executed during the
      effective period of the evidence of financial responsibility.  

         Section History: Recent Form

         2003 Acts, ch 90, §3; 2004 Acts, ch 1095, §3, 6
         Referred to in § 163.30