20-1095.04 - Arizona Statutes

20-1095.04. Filing of cash, alternatives to cash or surety bond A. To assure faithful performance of its obligations to contract holders, every service company shall, prior to the issuance of a permit, file with or for the benefit of the director cash or alternatives to cash which at all times have a value of at least one hundred thousand dollars. B. The service company may file alternatives to cash such as certificates of deposit purchased from a financial institution licensed to conduct business in this state or bonds of the United States government. C. In lieu of the cash or alternatives to cash required by this section, the applicant may file with the director a surety bond in the amount required by subsection A which is issued by a surety insurer licensed to do business in this state and which is for the same purpose as required in subsection A. The surety bond is subject to the approval of the director. The surety insurer shall not cancel the bond or subject the bond to cancellation unless thirty days' written notice is given to the director. D. If alternatives to cash are made in the form of certificates of deposit or a bond, it shall be irrevocably pledged to the director. The service company is entitled to any accrued interest earned from the alternatives to cash. E. The service company shall not impair or encumber the cash, alternatives to cash or surety bond filed under this section and shall pledge the cash, alternatives to cash or surety bond to the director. The service company shall maintain the cash, alternatives to cash or surety bond in force until such time as all of the service company's contractual obligations to contract holders are fulfilled.