9D.3 - EVIDENCE OF FINANCIAL SECURITY. - Iowa Statutes

9D.3 EVIDENCE OF FINANCIAL SECURITY. 1. An application for registration of a travel agency must be accompanied by a surety or cash performance bond in conformity with rules adopted by the secretary in the principal amount of ten thousand dollars, with an aggregate limit of ten thousand dollars. The bond shall be executed by a surety company authorized to do business in this state, and the bond shall be continuous in nature until canceled by the surety with not less than sixty days' written notice to both the travel agency and to the secretary. The notice shall indicate the surety's intent to cancel the bond on a date at least sixty days after the date of the notice. 2. a. The bond shall be payable to the state for the use and benefit of either: (1) A person who is injured by the fraud, misrepresentation, or financial failure of the travel agency or a travel agent employed by the travel agency. (2) The state on behalf of a person or persons under subparagraph (1). b. The bond shall be conditioned such that the registrant will pay any judgment recovered by a person in a court of this state in a suit for actual damages, including reasonable attorney's fees, or for rescission, resulting from a cause of action involving the sale or offer of sale of travel services. The bond shall be open to successive claims, but the aggregate amount of the claims paid shall not exceed the principal amount of the bond. 3. If an applicant or registrant has contracted with the airlines reporting corporation or the passenger network services corporation, or similar organizations approved by the secretary of state with equivalent bonding requirements for participation, in lieu of the bond required by subsection 1, the applicant or registrant may file with the secretary a certified copy of the official approval and appointment of the applicant or registrant from the airlines reporting corporation or the passenger network services corporation. 4. In lieu of any bond or guarantee required to be provided by this section, an applicant or registrant may do any of the following: a. File with the secretary proof of professional liability and errors and omissions insurance in an amount of at least one million dollars annually. b. Deposit with the secretary cash, securities, or a statement from a federally insured financial institution guaranteeing the performance of the applicant or registrant up to a maximum of ten thousand dollars to be held or applied to the purposes to which the proceeds of the bond would otherwise be applied.          Section History: Recent Form 89 Acts, ch 274, §3 CS89, § 120.3 C93, § 9D.3 2008 Acts, ch 1031, §11; 2008 Acts, ch 1032, §115; 2009 Acts, ch 41, §7