Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 1 - Banking, Securities, Small Loans and Corporations
Chapter 13 - Money Services
Article 1 - Licensing
3 AAC 13.030 - Security requirement
Current through February 24, 2025
(a) An applicant for a money transmission license or for approval under AS 06.55.103 must provide, and must maintain at all times, security that satisfies the requirements of AS 06.55.104. The security must secure the faithful performance of the obligations of the money transmission licensee, including its principals, responsible individuals, employees, and authorized delegates, with respect to money transmission. For purposes of this subsection, the obligations of the money transmission licensee are
(b) If a surety bond is used to satisfy AS 06.55.104, it must be in a form acceptable to the department, issued by a surety company authorized to engage in business in this state and acceptable to the department with an assignment in favor of the department. The surety bond must cover claims for the entire period that the person who is licensed under AS 06.55.105 or is offering services under AS 06.55.103 provides money transmission services in this state and for at least five years after the person ceases to provide those services. The department may require that the surety bond be kept in place for more than five years after the services are no longer provided in the state if the department determines that the surety bond will be needed to satisfy claims against the person after expiration of the five-year period.
(c) Not later than 14 days after the money transmission licensee receives notice of an action against the money transmission licensee that could result in recovery against the bond, a money transmission licensee shall provide written or electronic notice to the department of the action.
(d) The bond must provide that, not later than 14 days after the surety receives notice of an action against the bond or a final order of a court under (c) of this section, the surety shall provide written or electronic notice of the action or final order to the department.
(e) The bond must provide that immediately upon a payment by the surety under the bond, the surety shall provide written or electronic notice of the payment to the department.
(f) If a letter of credit is used to satisfy the security requirement of AS 06.55.104, it must be
(g) The security remains in effect until canceled. Cancellation may occur only after at least 30 days' written or electronic notice to the department. Nothing in this subsection affects any liability incurred or accrued during the period covered by the security. Cancellation of a security used to satisfy the requirements of AS 06.55.104 constitutes grounds for suspension or revocation of a license issued under AS 06.55 or the department's approval to offer services in the state under AS 06.55.103.
(h) If the department at any time reasonably determines that the required security is insecure, deficient in amount, or exhausted in whole or in part, the department will require the money transmission licensee to provide new or additional security to comply with AS 06.55.104 and this section. The department may increase the amount of security required, to a maximum of $500,000, if the financial condition of a money transmission licensee requires the increase. In determining whether to require new, additional, or increased security, the department may consider one or more of the following criteria:
Authority:AS 06.55.104
AS 44.33.020