                                 CODE OF VIRGINIA

CONTINUOUS BONDING REQUIREMENTS FOR FUND NONPARTICIPANTS (§ 46.2-1527.9)

Applicants for a renewal of a motor vehicle dealer&#8217;s license may elect to
obtain and continuously maintain a bond in the amount of $100,000 in lieu of
participation in the Motor Vehicle Transaction Recovery Fund, provided that such
applicants have not been the subject of a claim against a bond issued pursuant
to § 46.2-1527.2, or against the Fund for three consecutive years. The bond
shall come from a corporate surety licensed to do business in the Commonwealth
and approved by the Attorney General and shall be filed with the Board. The bond
shall be conditioned on a statement by the applicant that the applicant will not
practice fraud, make any fraudulent representation, or violate any provision of
this chapter in the conduct of the applicant&#8217;s business. In those cases in
which the surety of a dealer electing continuous bonding under this section
shall be liable pursuant to this section, the maximum liability to one claimant
against the surety by reason of a claim involving a single transaction shall be
limited to $20,000 regardless of the amount of the claim by one claimant, and
the aggregate liability of the dealer&#8217;s surety to any and all persons,
regardless of the number of claims made against the bond or the number of years
the bond remains in effect shall in no event exceed $100,000.
		An applicant for a renewal of a motor vehicle dealer&#8217;s license who is a
member of a nonprofit organization established under 26 U.S.C. § 501(c) (6)
that provides on behalf of its membership a blanket or umbrella bond in the
amount of $1 million satisfies the bonding requirements of this section. When
posted, a blanket or umbrella bond shall be considered a dealer bond for the
purposes of § 46.2-1527.10. The bond shall come from a corporate surety
licensed to do business in the Commonwealth and approved by the Attorney General
and shall be filed with the Board. In those cases in which the nonprofit
organization&#8217;s surety shall be liable pursuant to § 46.2-1527.10, the
maximum liability to one claimant against the surety by reason of a claim
involving a single transaction shall be limited to $20,000, regardless of the
amount of the claim by one claimant, and the aggregate liability of the
nonprofit organization&#8217;s surety to any and all persons for claims against
a single dealer shall in no event exceed $100,000. In those cases in which the
nonprofit organization&#8217;s surety shall be liable pursuant to §
46.2-1527.10, the maximum liability to any and all persons, regardless of the
number of claims made against the bond or the number of years the bond remains
in force shall in no event exceed $1 million.
		The Board may, without holding a hearing, suspend the dealer&#8217;s license
during the period that the dealer does not have a sufficient bond on file.
Dealers bonded under this article and those salespersons employed by such
dealers shall be exempt from the Fund fees specified in § 46.2-1527.1.

HISTORY: 2003, c. 331.