Alabama Money Transmitter Bond

Alabama Money Transmitter Bond

In Alabama, businesses engaging in monetary transmission (selling or issuing checks, drafts, money orders, traveler’s checks, stored value accounts, etc) are required under the Monetary Transmission Act to obtain a license from the Alabama Securities Commission and post a surety bond of at least $100,000. 

Jet Insurance Company offers the Alabama Money Transmitter Bond, ensuring that money transmitters in the State faithfully meet their obligations to customers and payees, and providing a financial guarantee to members of the public that they will be compensated if they incur damage due to the actions of a licensed money transmitter.

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Jet operates as a direct surety carrier, which means we cut out the middlemen like brokers and agents along with the fees, commission, and interest they charge. That allows us to get you the bond you need faster and at a competitive rate.

How is the Price Determined for the Alabama Money Transmitter Bond?

The Alabama Money Transmitter Bond price is based on the bond amount as determined by the Alabama Securities Commission (ASC) using the business’s incoming funds and payment obligations. The bond must be at least $100,000 or the sum of the business’s average daily outstanding obligations for money received and 50% of its average daily outstanding obligations for money payments, whichever is greater.

The bond price will be a small fraction of the total bond amount, and will be based on some criteria of the applicant, like credit score, financial statements, years of experience, etc. 

With Jet’s unique monthly payment option, you pay a small portion of your bond limit to keep your bond active as long as you need. Jet also offers the Money Transmitter Bond in annual, 2-year, and 3-year payment options for less frequent payments.

What Is the Purpose of the Alabama Money Transmitter Bond?

The ASC requires the Money Transmitter Bond to protect the public interest and help enforce the professional standards outlined in the Monetary Transmission Act. If a money transmitter commits fraud, conducts unsafe or unsound business practices, or refuses to comply with an investigation by the ASC, the Commission may elect to make a claim on the Money Transmitter Bond. 

The Alabama Securities Commission’s mission is to regulate the securities industry, protecting investors against fraud and enforcing the Alabama Securities Act. In this particular case, that means regulating money transmitters entrusted with receiving and making payments on behalf of the public.

How to Apply for the Alabama Money Transmitter Bond With Jet

Applying for the Money Transmitter Bond is easy with Jet! Once you submit your initial application, an underwriter from the Jet team will need to look over your credit score and documents related to your business. Following a short review, Jet will get back to you with a quote, which you’ll be able to purchase instantly. 

Once your purchase is complete, a receipt and copy of the bond will be sent to you for your records.

Can Jet File the Alabama Money Transmitter Bond for Me?

Yes, Jet can! The Alabama Securities Commission is on the cutting edge, and will allow Jet to electronically file your bond as soon as you complete your purchase. For initial application, you will also be required to complete the application and send the list of business documents required by the ASC. If you prefer to receive the bond and submit it to the ASC yourself, that option is available for you at checkout. 

All paperwork must be submitted to the following address:

Alabama Securities Commission
Licensing Division
PO Box 304700
Montgomery, AL 36130-4700

Can I Cancel My Alabama Money Transmitter Bond and Get a Refund?

Cancelling your bond with Jet is easy! Just let the Jet team know that you intend to cancel your bond (write us or email us at [email protected]). Jet will notify the ASC of your intent to cancel and they will begin the 30-day cancellation period. With Jet’s monthly payment option, this part is easy — your payments will cease after the 30 days are up.

If you have paid for the bond by the year, you will receive a refund for any remaining premium once the ASC’s cancellation period is done.

Money transmitters should take note that even after cancellation of the bond, the licensee is still liable for actions for five years after the cancellation of the bond, per the Monetary Transmission Act Section 8-7A-7.

How to Renew the Alabama Money Transmitter Bond

If you opted for one of our annual, 2-year, or 3-year plans, don’t worry. Jet will notify you via mail and e-mail well in advance of the March 31st due date when all renewal paperwork needs to be turned into the ASC. Simply fill out the renewal notice through your preferred method (online or by mail) and submit payment to Jet if your bond limit has remained the same. 

However, the ASC requires a renewal form and a list of business documents showing any changes in the number of locations, volume of transactions, or total liabilities to assess if your bond limit is in an appropriate amount and may increase your bond limit. If there has been a change to your bond limit, simply let Jet know and our team will send out adjusted rates for the new bond limit. 

With the monthly payment plan, your payments will continue without the need for renewal if your bond limit remains the same. If you receive notice of a change in your bond limit from the ASC following a review of your renewal paperwork, notify Jet right away. Our team will send you the updated monthly rates, which you will need to accept to continue your coverage in the new amount needed. 

How Does a Money Transmitter Avoid Money Transmitter Bond Claims?

Money transmitters should be thoroughly familiar with the business practices expected by the Commission. The Monetary Transmission Act Section 8-7A-15 lists the behaviors that would give cause for the Commission to suspend or revoke a license, or pursue a bond claim against the licensee. Conducting a monetary transmission business within these guidelines is the best way to ensure that a bond claim is never filed.

Claims can originate any time the licensee fails to fulfill payment obligations or commits fraud, intentional misrepresentation, or gross negligence, resulting in damages to a member of the public. For example, consider a money transmitter who specializes in receiving money via ACH (Automated Clearing House) transfer from customers’ paychecks to then paying utility bills on the customers’ behalf. If that money transmitter decided to receive the ACH payments, but then not remit the bill payments and keep the difference for themselves, they would be committing fraud. Eventually the customer’s utility provider would clue them in, and the customer would seek damages against the money transmitter.

Claims can be filed at any time and may start as a customer complaint to the ASC, or because the Commission decides to investigate. In either case, the Commission’s preference is to resolve conflicts at the lowest level of formality possible, using arbitration to arrive at a settled agreement. It is best to cooperate during this process, as it would prevent the complaint from escalating to a bond claim that would occupy more time and may add legal fees.

What Happens if I Get a Money Transmitter Bond Claim?

Notify Jet immediately if you are notified that there is an investigation being conducted by the Commission, or you become aware of a complaint from a damaged customer. Jet will come to your defense as much as possible. In order to do that, we will need forthright, honest communication from you, sharing all of the details pertinent to the complaint. 

The Commission will also conduct a review to determine if an investigation and hearing are necessary. If the claim is deemed valid, Jet Insurance Company is obligated by the Monetary Transmission Act to pay up to the limit of the bond, even up to five years after the money transmitter has ceased doing business. If this occurs, Jet is acting as your financial guarantor, paying the claim on your behalf. You are still responsible for the conduct that resulted in the claim and must reimburse Jet for the amount that was paid out. Failure to do so could jeopardize your ability to obtain a surety bond (and consequently, a license) in the future.

Alabama Money Transmitter Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: