122:15-1-03 Ineligibility of principal and surety; loss of program eligibility.

(A) A principal is ineligible for a DOD bond guarantee under one or more of the following circumstances;

(1) An owner, officer, director, or general partner of the principal is under indictment for, or has been convicted of a felony involving protecting the integrity of business transactions or business relationships; or a final civil judgment has been entered stating that such owner, officer, director, or general partner has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships; or

(2) A regulatory authority has revoked, canceled, or suspended a license of the principal, or an owner, officer, director, or general partner of the principal, which is necessary to perform the contract; or

(3) The principal has obtained a bond guaranteed by fraud or material misrepresentation, or has failed to keep surety informed of unbonded contracts or of a contract bonded by another surety.

(B) A surety is ineligible for a DOD bond guarantee under one or more of the following circumstances:

(1) A regulatory authority has revoked, canceled, or suspended a license of the surety, or an owner, officer, director, or general partner of the surety, which is necessary to transact business as a surety insurer; or

(2) The surety has obtained a bond guarantee by fraud or material misrepresentation; or

(3) The surety has breached the EDGE bond guarantee participation agreement with DOD.

(C) A principal may lose eligibility for further DOD bond guarantees if any of the following occurs under a DOD-guaranteed bond issued on behalf of the principal:

(1) Legal action under the guaranteed bond has been initiated.

(2) The obligee has declared the principal to be in default under the contract.

(3) The surety has requested reimbursement for losses incurred under the bond.

(4) The principal committed fraud or material misrepresentation in obtaining the guaranteed bond.

(D) A surety may lose eligibility for further DOD bond guarantees if any of the following occurs under a DOD-guaranteed bond issued on behalf of the principal:

(1) The surety committed fraud or material misrepresentation in obtaining the guaranteed bond.

(2) The surety has breached the EDGE bond guarantee participation agreement.

Eff 9-26-03; 10-2-04
Rule promulgated under: RC 119.03
Rule authorized by: RC 122.90(B)
Rule amplifies: RC 122.90
R.C. 119.032 review dates: 10/02/2009