13 CFR 115.60 – Selection and admission of PSB Sureties
(a) Selection of PSB Sureties. SBA’s selection of PSB Sureties will be guided by, but not limited to, these factors:
Terms Used In 13 CFR 115.60
- Contract: A legal written agreement that becomes binding when signed.
(1) An underwriting limitation of at least $6,500,000 on the U.S. Treasury Department list of acceptable sureties;
(2) An agreement that the Surety will neither charge a bond premium in excess of that authorized by the appropriate State insurance department, nor impose any non-premium fee unless such fee is permitted by applicable State law and approved by SBA.
(3) Premium income from contract bonds guaranteed by any government agency (Federal, State or local) of no more than one- quarter of the total contract bond premium income of the Surety;
(4) The vesting of underwriting authority for SBA guaranteed bonds only in employees of the Surety;
(5) The rating or ranking designations assigned to the Surety by recognized authority.
(b) Admission of PSB Sureties. A Surety admitted to the PSB program must execute a PSB Agreement before approving SBA guaranteed bonds. No SBA guarantee attaches to bonds approved before the D/SG or designee has countersigned the Agreement. For a period of nine months following admission to the PSB program, the Surety must obtain SBA’s prior written approval before executing a bond greater than $2 million so that SBA may evaluate the Surety’s performance in its underwriting and claims and recovery functions. At the end of this nine month period, SBA may in its discretion extend this period to allow SBA to further evaluate the Surety’s performance.