Afsb 151 stuvia - Study guides, Class notes & Summaries

Contract Bonds - Answer These bonds guarantee the performance of a written contract, such as the completion of a construction project. Bid Bonds - Answer A type of Contract bond which guarantees the obligee that if a contractor's bid is accepted, the contractor will provide the required Performance bond. (See also Contract bond) Surety bond - Answer An agreement under which one party (the surety or bonding company) guarantees to make good to another party (the obligee or owner) the debt, ...

A basic type of bond that involves all situations in which sureties guarantee performance of obligations that generally do not arise from contracts is - ANSWER commercial surety bonds bonds for which the laws specify the bond conditions and for which all three parties are dictated by the applicable law rather than the bond provisions are - ANSWER statutory bonds A group that educates the general public, legislative bodies, contractor associations, and others about the benefits of surety bo...

When selecting a surety company for a bonding relationship with a contractor, - Answer The producer should consider the surety's suitability factors to the contractor's needs, including the surety's philosophies, financial capacity, stability, and comfort with the projects Johnson Construction was approved for a $5 million/$20 million annual contract surety credit. A $5 million/$20 million contract surety credit line means that the surety is willing to - Answer Bond single jobs up to a con...

Which one of the following is the producer's ultimate objective in the contractor-producer-underwriter relationship? - Answer To be as responsive as possible to the contractor's needs while presenting business that is reasonably consistent with the surety's underwriting standards Which one of the following attributes of the contractor-producer-underwriter relationship requires periodic visits to the contractor's office, visits to project sites with the contractor, and meetings with the co...

Which one of the following statements regarding fidelity bond claims is true? - Answer By promptly investigating a bond loss, an insurer may discover that it has recourse against persons or entities whose conduct caused or contributed to the loss, but is not relevant to the proof of loss In proper handling of a fidelity loss, when can an insurer begin the loss investigation and when can claims personnel confront the insured? - Answer The insurer can begin the investigation, but claims personn...

Any promise to answer for another person's debts or defaults, including the promise that a surety makes to the obligee under a bond, derives from which one of these? - ANSWERSStatutes of frauds Following the Civil War, the growing number and complexity of financial/commercial relationships led to the need for - ANSWERSCommercial suretyship. In accordance with a contract to build a county shed for the Village of Malcom, Raymone Construction purchases a contract surety bond from SureRite In...

Which one of the following is the producer's ultimate objective in the contractor-producer-underwriter relationship? - ANSWER To be as responsive as possible to the contractor's needs while presenting business that is reasonably consistent with the surety's underwriting standards Which one of the following attributes of the contractor-producer-underwriter relationship requires periodic visits to the contractor's office, visits to project sites with the contractor, and meetings with the co...

Which one of the following statements regarding fidelity bond claims is true? - ANSWER By promptly investigating a bond loss, an insurer may discover that it has recourse against persons or entities whose conduct caused or contributed to the loss, but is not relevant to the proof of loss In proper handling of a fidelity loss, when can an insurer begin the loss investigation and when can claims personnel confront the insured? - ANSWER The insurer can begin the investigation, but claims personn...

A type of reinsurance transaction that involves an agreement between the primary insurer and the reinsurer specifying how to transfer risks, that defines the eligible risks in terms of lines and classes of business, that specifies the parties' obligations, and for which eligible risks are automatically reinsured, is - ANSWER Treaty reinsurance A surety's liability for a surety bond can only cease to exist when the underlying obligation/agreement has - ANSWER been performed as specified in t...

Which one of the following characteristics is unique under American personal suretyship compared with corporate suretyship? - ANSWER Sureties were protected by laws that were favorable to them Except in the case of a forfeiture bond, if the principal defaults the surety will pay - ANSWER Up to the bond penalty, but no more than the obligee's actual loss amount CB Construction entered into a construction contract with Lee Properties. The contract required that CB Construction obtain a perf...