What is a Michigan Money Transmission Services Provider Bond?
Before a money transmitter can do the following, he or she must first obtain a license and a surety bond:
- Issue or sell payment instruments
- Receive money for transmission within the United States or outside of the country through electronic transfer, facsimile, wire, or payment instrument
- Receive money for the payment of bills
The Michigan Office of Financial and Insurance Regulations, a State of Michigan dedicated-funds agency, requires money transmitters/money transmission service providers to furnish a Money Transmission Services Provider Bond to ensure compliance with every rules, regulations, and provision lawfully promulgated by the Commissioner of the Office of Financial and Insurance Regulation.
Aside from ensuring a fair and ethical performance of obligations, the bond also acts as a financial security in the event of a misconduct and other fraudulent activities committed by the money transmitter.
According to the Michigan Statutes, S. 487.1003(c), “money transmission services” refers to the sale and issuance of “payment instruments or stored value devices or receiving money or monetary value for transmission. This does not include the delivery, online, or telecommunications services or network access.
What are the bond conditions?
- The Surety Company must be authorized to issue surety bonds in the State of Michigan.
- The Principal must comply with all applicable laws, statutes, and provisions as seen on PA 250 of 2006, Money Transmission Services Act.
- If the Principal conforms to and complies with each and every provision, the obligation will be null and void; otherwise, it is to remain in full force and effect.
- The bond may be continued for additional terms by the appropriate continuation of certificates with the approval of the Commissioner.
- Indemnification will be made to the Director of the Department of Insurance and Financial Services of the State of Michigan on behalf of the People of the State of Michigan.
What is the bond amount?
The bond amount is determined based on the number of locations and authorized delegates operated by the licensee (money transmitter).
The cost of the bond is a percentage (1%-5%) of the bond amount. This will serve as your bond premium and will be subjected to an underwriting evaluation.
How do I obtain a Money Transmission Services Provider Bond?
You can easily get this surety bond from us! We will guide you through the entire process. We’ll make sure that you will understand what you are getting into.
Here’s how to do get bonded:
- You have to send an application to us. If you are ready to do that now, you may APPLY HERE!
- After we have received your application, we will ask you to submit the necessary information needed for the underwriting process. These are the following:
- Your business or job performance history
- Your credit score
- Your copy of the BOND FORM, which can be obtained from the Michigan Department of Insurance and Financial Services.
An expert underwriter will carefully evaluate all three to attain the best credit decision possible. To avoid any delay, the information that you should submit should be organized and concise.
- Your surety bond will be issued and sent to you!