(a) (1) On application to the Fund for appointment as a fund producer, an applicant shall file with the Fund a bond for the benefit of the Fund for the balance of the current year.

(2) On or before December 31 of each year, each fund producer shall file with the Fund a bond for the benefit of the Fund for the next succeeding year.

(b) A bond required under this section shall be:

(1) in the amount of $10,000;

(2) executed by an authorized surety insurer; and

(3) conditioned that the fund producer will account for and pay over to the person entitled to it all money belonging to the person that comes into the fund producer’s possession in accordance with this subtitle and the regulations that relate to the binding of coverage.

(c) (1) A fund producer is considered to have complied with this section if an Association member certifies to the Fund that:

(i) the Association member has a bond in effect that covers the fund producer and complies with the requirements of this section; and

(ii) the bond coverage extends to the Fund when persons apply to the Fund for coverage through the fund producer.

(2) The certification shall be made by an authorized representative of the Association member.

(3) A copy of the certification shall be mailed promptly to the Fund.

(d) A fund producer’s authority to bind coverage in the Fund may be terminated on 10 days’ written notice if the bond is not:

(1) filed with the Fund in a timely manner; or

(2) continuously maintained in effect while the fund producer has authority to bind coverage in the Fund.