(a) Public entities may accept surety bonds as collateral instruments to secure public entity funds on deposit with financial institutions. A surety bond must meet the following statutory conditions to be accepted:
- (1) subject to the terms and conditions of the bond, it is irrevocable and absolute,
- (2) the surety bond is issued by an insurance company authorized to do business in Oklahoma,
- (3) the issuer of the surety bond does not provide surety bonds for any one financial institution in an amount that exceeds ten percent (10%) of the surety bond insurer's policyholders' surplus and contingency reserve, net of reinsurance, and
- (4) the claims-paying ability of the authorized insurance company is rated, at all relevant times, in the highest category by at least two nationally recognized rating agencies acceptable to the State Treasurer. [62 O.S. § 517.5(A)(4)].
- (b) The financial institutions which use surety bonds to secure public entity deposits shall be solely responsible for the cost of securing a surety bond. Surety bonds from any particular company may only be accepted after the State Treasurer's approval of the company.
Added at 16 Ok Reg 1275, eff 5-13-99
Amended at 18 Ok Reg 2857, eff 7-1-01
Amended at 19 Ok Reg 2474, eff 6-27-02