The North Carolina Department of Insurance (NCDOI) requires collection agencies to carry a Collection Agency Surety Bond to be licensed. Jet Insurance Company makes a guarantee to the NCDOI for you, the collection agency, that your clients are protected from not receiving due payment and the Department will be repaid for investigations. Without that guarantee, you cannot be approved for a license.
Jet Insurance doesn’t work with middlemen, meaning there is no time wasted in getting your bond.
The cost for a Collection Agency Bond starts at $100 annually or $10 monthly. The cost of the bond is largely determined by the bond limit required and the collection agency owner’s personal credit (it’s a soft credit check which doesn’t affect your credit score). The chart below shows the preferred credit rates available for different bond limits.
It is important to note that certain collection agencies (foreign) must hold two bonds simultaneously as instructed by the NCDOI and explained in further detail below.
Collection agencies that operate in North Carolina must have one of three license statuses or permits with the Department of Insurance:
Domestic - incorporated in North Carolina
Foreign - incorporated in a state outside of North Carolina (both bonds required)
Alien - Companies based outside the United States who operate as collection agencies are also required to get bonding, however, Jet does not offer that particular bond form.
Collection Agency Bonds provide a necessary guarantee from the surety (Jet) that losses created by the collection agency’s unlawful actions or failure to remit collections are accounted for. This bonding requirement is regulated by the Department of Insurance, which is tasked to prevent fraud in the State of North Carolina. This bond assists in this goal by protecting against losses incurred by a collection agency that is operating in an unlawful or unethical manner.
Collection Agency Bonds are due for renewal on June 30th. Initial Collection Agency Bonds require a set limit of $10,000 and must be replaced with a Renewal Collection Agency Bond at a bond limit that reflects the number of collections gathered the prior year. The renewal bond limit is determined by a calculation of one-sixth of the total collections paid directly to the collection agency for the previous calendar year (January 1 – December 31) minus the commissions earned on those collections.
Jet will notify you in March that your Collection Agency Bond is coming up for renewal through mail and email. If your bond limit remains the same, you can renew the bond within minutes simply with payment online or in the mail. If your bond has a new bond limit, simply verify the new bonding amount required with Jet to receive a new rate for your renewal.
If you are on a monthly payment plan and your bond limit remains the same, your payments will continue at the same rate. If there is a change in your bond limit, Jet will ask that you provide the new limit and confirm the new bond rate.
After the Collection Agency Bond is purchased, Jet will sign the bond form, add the surety seal, and attach the power of attorney. Jet will send the bond directly to the NCDOI for you.
You will have the option to have the bond sent to the address of your choosing to submit with any other application paperwork. The bond form is submitted to the following address:
North Carolina Department of Insurance
Agent Services Division
ATTN: NIBE Team
1204 Mail Service Center
Raleigh, NC 27699-1204
Yes, but a Collection Agency Bond must be held during the course of the license, which is from July 1st to June 30th. If you wish to cancel your bond, the North Carolina Department of Insurance must receive evidence that you have purchased a new bond or provided an acceptable alternative to replace Jet’s bond before the bond is cancelled. A refund cannot be issued until Jet receives notice from the NCDOI that Jet is no longer liable for your business. Jet will calculate any unearned premium at the point of release and provide you with a refund.
If you are part of the monthly payment program, you must also provide evidence of coverage to the Department of Insurance before the bond payments can be terminated. Payments will continue to be taken until Jet receives notice from the NCDOI that Jet is no longer liable for your business. After the receipt of such notice, Jet will stop taking payments for your bond.
Collection agencies must faithfully perform their duties under the North Carolina General Statutes Chapter 58, Article 70.
The Department of Insurance will investigate collection agencies based on complaints or through their own findings. A good way to avoid an investigation is to avoid prohibited acts as they relate to threats, harassment, unreasonable publication, deceptive representation, unfair practices, or unauthorized practice of law. Under GS 58-70-130, the collection agency may be obligated to repay a debtor for actual damages, as well as a penalty up to $4,000 for each occurrence of a violation. The NCDOI takes action on a case-by-case basis against a collection agency and should there be no resolution, action against the bond may be made. If the NCDOI collects expenses during an investigation (including travel expenses), a claim can be filed on the bond for reimbursement.
Clients can also take action against the collection agency for failure to deliver collections obtained from delinquent debts. Collection agencies should investigate these complaints and make proper restitution if need be. Failure to do so may result in a claim on the bond from the client.
If you receive a claim against your Collection Agency Bond, Jet will launch an investigation to determine the validity of the claim. During this time, it is best for the collection agency to present all applicable materials to Jet in a timely manner.
A valid claim will result in Jet paying the claimant up to the bond limit on your behalf. The bond works as an extension of your credit leaving the collection agency ultimately responsible for repaying Jet for the amount paid out. The bond must be restored to its full capacity to avoid license complications.
Applying for a Collection Agency Bond only takes a few minutes! Jet’s online application will guide you through each simple step, requiring only basic business information. The underwriting for this bond will require a soft credit check, so a social security number must be submitted. Once the application is completed, you will receive an approved rate that is ready for purchase.
After purchase, you will receive an emailed copy of your bond right away and the original bond will be mailed to you to be completed.
Yes! If a collection agency has multiple locations, a separate license and adequate bonding is required for each location.
Foreign collection agencies must hold both “Bond #1” and “Bond #2” to hold appropriate coverage with the Department of Insurance.