The United States Department of the Treasury recently issued a Request for Information (RFI) to gather feedback from the public on potential updates to federal surety bond regulations. Published in the Federal Register on April 22, 2024, this initiative could mark the first substantial revision to the regulations in over 20 years.

The Treasury’s Fiscal Service, which oversees the authorization of surety companies and reinsurers eligible to provide bonds for federal projects, is spearheading this effort. The primary aim is to modernize the regulations found in Title 31, Part 223 of the Code of Federal Regulations, which governs corporate sureties, and Title 31, Part 226, which relates to reinsurance requirements.

Currently, companies approved by the Treasury can issue bonds guaranteeing performance or payment obligations to the federal government. Treasury authorization is critical for corporate sureties and reinsurers to operate in federal contexts, and compliance with these regulations ensures the financial security and reliability of these institutions.

The Treasury is seeking feedback on several areas, including:

  • The effectiveness of existing regulations and potential areas for improvement.
  • Possible revisions to approval processes for surety companies and reinsurers.
  • Updates to financial criteria, such as minimum asset and surplus requirements.
  • Modifications to reinsurance agreements and standards.
  • Use of electronic bonds and digital processes to reflect modern business practices.

The RFI poses 36 specific questions to the public, focusing on how the rules should be updated to better reflect current business realities, technological advances, and risk management practices. Interested parties are encouraged to submit their comments by July 22, 2024.

This call for input represents a significant opportunity for stakeholders—particularly surety companies, reinsurers, brokers, and contractors—to shape the regulatory framework that governs federal surety bond practices for years to come.

Those who wish to review the full Request for Information or submit comments can do so via the Treasury Department’s portal on the Federal Register website.

Need help navigating your surety bond needs? Contact National Surety Services, Inc. today at 1-800-953-6699. Our experienced team is ready to assist you with expert guidance and personalized solutions.