Effective May 24th, 2016, a license and a Vermont consumer litigation funding company surety bond are required of all prejudment purchasers of potential lawsuit awards. The statute defines litigation funding as, “a nonrecourse transaction in which a person provides personal expense funds to a consumer to cover personal expenses while the consumer is a party to a civil action or legal claim and, in return, the consumer assigns to such person a contingent right to receive an amount of the proceeds of a settlement or judgment obtained from the consumer’s action or claim. If no such proceeds are obtained, the consumer is not required to repay the person the funded amount, any fees or charges, or any other sums.” Passed as a result of abusive practices and what essentially amounted to unethical interest rates on loaned money, all operators must now process a license application through the Nationwide Mortgage Licensing System (NMLS), provide a surety a surety bond and pay the appropriate licensing and renewal fees.
The Vermont consumer litigation funding company surety bond is a general license/permit type of obligation. It guarantees that the principal licensed and regulated under Title 8, Vermont
Statutes Annotated, Chapter 74, Consumer Litigation Funding Companies (the “Act”) that ensures that the principal will abide by the statutory requirements of said Act, and all orders of the Commissioner of Financial Regulation. The obligation guarantees payment to the state and/or any person having a right of action against the litigation funding company for monies that may become due to the state or person however the form appears to bar direct claims and collection by third parties. The bond is non-cumulative and can be canceled by either certified mail notice to the Commissioner or electronic notice through the NMLS. The surety bond does impose an administrative requirement on the surety to acknowledge the receipt of claims within the appropriate time period.
Underwriting of surety bonds requires review by a surety specialist with knowledge of this class of obligation. Surety bond leader, Surety One, Inc., specializes in commercial surety bonds and is an active surety agent with the NMLS. We offer the Vermont consumer litigation funding company surety bond and fidelity bond coverage options to the same. Application submissions are reviewed and responded to on the same day as they are received. We are the MOST RESPONSIVE surety underwriter in the bonding business. Call (800) 373-2804, or email us at Underwriting@SuretyOne.com for litigation funding company bond application or for any fiduciary bond need.
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