Surety Bonds

Background

The Financial Management Service (FMS), is responsible for administering the surety bond program for the federal government under 31 U.S.C. 9304-9308. Companies who wish to (1) direct write federal bonds or (2) reinsure federal bonds or (3) be recognized as an Admitted Reinsurer for the companies in Categories 1 & 2 must make application to FMS.

Companies' applications are reviewed thoroughly to ensure that financially sound companies receive Treasury recognition. It is the responsibility of FMS to continually review and monitor the financial status of companies to be approved in all of the 3 categories listed above. Companies in categories 1 & 2 are published in the Circular 570, list of acceptable surety companies, every July 1, in the Federal Register.

Companies in category 3, above, are not published in the Federal Register as they cannot directly write a federal bond or reinsure an excess risk for a direct writer. Instead, the FMS publishes a separate list of Admitted Reinsurers (including Pools, Associations and Lloyds' of London Syndicates) every September 30th.