§ 643. Bond or securities. 1. As a condition for the issuance and
retention of the license, applicants for a license and other licensees
shall, within thirty days after notice by the superintendent, or such
longer or shorter period as he or she shall prescribe, file with the
superintendent one or more corporate surety bond or bonds, as required
below, in form satisfactory to him or her and issued by a bonding
company or insurance company authorized to do business in this state.
One bond shall be in favor of the superintendent and in such principal
amount as he or she shall determine is necessary or desirable for the
protection of the purchasers and holders of New York instruments sold or
to be sold by the applicant or licensee, provided, however, that until
June first, nineteen hundred seventy-seven, the principal amount of such
bond shall be no less than two hundred ten thousand dollars and on and
after June first, nineteen hundred seventy-seven, the principal amount
of such bond shall be no less than five hundred thousand dollars. If the
applicant or licensee intends to engage or engages in the sale of New
York traveler's checks, such applicant or licensee shall file with the
superintendent a separate bond. Said bond shall be in favor of the
superintendent and in such principal amount as he or she shall determine
is necessary or desirable for the protection of the purchasers and
holders of the New York traveler's checks sold or to be sold by the
applicant or licensee; provided, however, that the principal amount of
such bond shall not be less than seven hundred fifty thousand dollars,
unless the superintendent, for good cause shown, shall have determined
that a lesser amount will adequately protect the purchasers and holders
of the New York traveler's checks sold or to be sold by such applicant
or licensee.

In making any determination under this subdivision, the superintendent
may take into account the financial condition of the licensee, the
number of locations in this state at which the licensee, either directly
or through agents, transacts the business of selling New York
instruments or New York traveler's checks, the controls imposed on such
agents or, and the possible exposure of purchasers and holders of New
York instruments and New York traveler's checks to loss in the event of
the insolvency, bankruptcy or other financial impairment of the
licensee. The proceeds of each bond shall constitute a trust fund for
the exclusive benefit of the purchasers and holders of the New York
instruments and New York traveler's checks, as the case may be. Except
as otherwise provided in the following sentence, in the event of the
insolvency or bankruptcy of any licensee, the proceeds of the bond or
bonds held for the exclusive benefit of the purchasers and holders of
New York instruments and the proceeds of the bond or bonds held for the
exclusive benefit of the purchasers and holders of New York traveler's
checks shall be paid to the superintendent forthwith for disposition in
accordance with the provisions of this article. If any New York
instruments have been assigned to the fund, the proceeds of the bond
held for the exclusive benefit of the purchasers and holders of New York
instruments shall constitute a trust fund for the benefit of, and shall
be payable to, the fund to the extent of such assignment. From time to
time, the superintendent may require, upon thirty days notice or such
longer or shorter period as he or she shall prescribe, that such bond or
bonds be increased if he or she shall determine that such increase is
necessary or desirable for the protection of the purchasers and holders
of New York instruments and New York traveler's checks.

2. The licensee shall give notice to the superintendent by registered
or certified mail of any action which shall be brought against him and
of any judgment which shall be entered against him by such purchaser or
holder of a New York instrument or a New York traveler's check, with
details sufficient to identify the action or judgment, within ten days
after the commencement of any such action or notice to the licensee of
entry of any such judgment. The corporate surety shall within ten days
after it pays any claim or judgment to any such purchaser or holder of a
New York instrument or a New York traveler's check give notice to the
superintendent by registered mail of such payment, with details
sufficient to identify the purchaser or holder and the claim or judgment
so paid. Whenever the principal sum of such bond or bonds is reduced by
one or more recoveries or payments thereon the licensee shall furnish a
new or additional bond or bonds under the provisions of this section, so
that the total or aggregate principal sum of such bond or bonds shall
equal the sum required pursuant to the provisions of this section, or
shall furnish an endorsement duly executed by the corporate surety
reinstating the bond or bonds to the required principal sum thereof. The
liability of the surety on such bond or bonds to the superintendent and
to the said purchasers and holders of New York instruments and New York
traveler's checks shall not be affected in any way by any
misrepresentation, breach of warranty or failure to pay the premium or
by any act or omission upon the part of the licensee nor by the
insolvency or bankruptcy of the licensee or the insolvency of the
licensee's estate, and in the event of the death or dissolution or
liquidation of the licensee, shall continue upon all transactions
entered into by the agents of such deceased, dissolved or liquidated
licensee within a period of thirty days after the death, dissolution or
liquidation of the licensee or termination of the bond or bonds,
whichever date shall first occur, provided, however, that such
transactions were entered into in good faith by such purchasers and
holders of New York instruments and New York traveler's checks. Every
such corporate surety bond shall provide that in the event that a
judgment recovered against the licensee or its legal representative or
successor by any such purchaser or holder on a claim arising or a
transaction entered into during the life of the bond shall remain
unsatisfied after the expiration of thirty days from the service of
notice of entry of judgment upon the licensee or upon his legal
representative or successor or upon the attorney for the licensee, and
upon the corporate surety, or in the event that the fund has become an
assignee of any claim arising or a transaction entered into during the
life of the bond, then an action may be maintained against the corporate
surety under the terms of the bond (1) by such purchaser or holder for
the amount of such judgment not exceeding the amount of the bond, except
during a stay of execution of such judgment against the licensee or his
legal representatives or successors, or (2) by the superintendent, on
behalf of the fund, for the amount of such claim, not exceeding the
amount of the bond. The bond may not be cancelled either by the licensee
or the surety except upon notice to the superintendent by registered or
certified mail with return receipt requested, the cancellation to be
effective not less than ten days after receipt by the superintendent of
such notice.

3. In lieu of such corporate surety bond or bonds, or of any portion
of the principal sum thereof as required by this section, applicants for
a license and other licensees may keep on deposit, or may be required to
keep on deposit by the superintendent, with such banks, trust companies,
national banks, savings bank, savings and loan associations, federal
savings associations, credit unions, or federal credit unions in the
state of New York as such applicants or licensees may designate and the
superintendent may approve, and in accordance with such rules and
regulations as the superintendent shall from time to time promulgate,
interest-bearing stocks and bonds, notes, debentures or other
obligations of the United States or any agency or instrumentality
thereof, or guaranteed by the United States, or of this state, or of a
city, county, town, village, school district or instrumentality of this
state, or guaranteed by this state, or dollar deposits, to an aggregate
amount, based upon principal amount or market value, whichever is lower,
in the case of the above-described securities, of not less than the
amount of the required corporate surety bond or bonds or portion or
portions thereof. Such securities or funds shall be deposited to secure
the same obligation or obligations as would the corporate surety bond or
bonds filed under this section. So long as it shall continue business in
the ordinary course, such licensee shall be permitted to collect
interest on the securities so deposited and from time to time to
exchange, examine and compare such securities. In the event of the
failure or insolvency of such licensee, the securities, any proceeds
therefrom and the funds deposited pursuant to this section shall
constitute a trust fund for the exclusive benefit of the purchasers and
holders of New York instruments or New York traveler's checks, as the
case may be, or, in the event such New York instruments are assigned to
the fund, the securities, any proceeds therefrom and the funds deposited
pursuant to this section for the benefit of the purchasers and holders
of New York instruments shall constitute a trust fund, for the benefit
of the fund.

4. Notwithstanding the foregoing provisions of this section, if the
superintendent shall find that a licensee has transacted the business of
money transmission in this state for a period of five consecutive years
and that such business has been conducted honestly, efficiently and
safely and that the licensee's financial condition is sound and that its
New York instruments are insured, the superintendent may dispense with,
modify or eliminate any of the foregoing requirements of this section
with respect to New York instruments; provided, however, that if at any
time subsequent thereto, the superintendent shall deem it necessary or
desirable for the protection of the purchasers and holders of New York
instruments, to reinstate any of the requirements of this section, he
may do so.