AFSB 151 Final Exam

AFSB 151 Final Exam A surety bond is a written document in which one party guarantees a second party's - ✔✔Performance to a third party for the second party's failure to fulfill an obligation. Which one of the these groups, for the most part, serves the market for fidelity and surety bonds in the United States? - ✔✔Multiline property-casualty insurers Sureties use what written document to authorize a producer to act as the surety's agent in bond production? - ✔✔A power of attorney While suretyship and banking both use a prequalification process to extend credit to their customers, suretyship is different from bank credit in that - ✔✔Suretyship guarantees performance as well as monetary obligations. Because most bonds are "joint and several liability" documents, the obligee can recover losses from - ✔✔The principal or the surety, or from both. A financial guarantee differs from performance and fidelity guarantees because it requires honesty, the ability to perform the contract, and - ✔✔The ability to pay money to meet the contractual obligation. A legal remedy that a surety can use against a defaulting bond principal, in which the surety exercises its right to force the principal to perform by exhausting the principal's resources instead of its own, is - ✔✔Exoneration In an unlimited cosurety arrangement, the obligee can collect - ✔✔The full loss from any of the cosureties up to the penal sum of the bond. A bond that guarantees that faulty work will be corrected and defective materials will be replaced for a period of one year or less and that is usually provided with a performance bond at no additional cost is a - ✔✔Maintenance bond A contract bond that guarantees the local governmental authority that a principal will complete a development in accordance with approved proposals and at the principal's expense is a - ✔✔Subdivision bond This classification of license and permit bonds poses the least risk to the surety and guarantees that the principal will conform with laws that govern the business or activity it conducts. Which bond classification is described? - ✔✔Compliance-only bonds Under a public official bond guaranteeing the honesty of a treasurer, - ✔✔He or she must account for the cash that he or she holds while in office. Bond losses occur when a fiduciary and its surety are held accountable because the fiduciary did not exercise reasonable care in notifying all heirs of an impending probate proceeding. This fiduciary is called - ✔✔An administrator A person who commences an action against another to obtain an equitable remedy may be required to post a bond before the court will proceed with the action. This bond is called - ✔✔A plaintiff bond The legally mandated hazardous waste facilities performance bond - ✔✔Can be posted only for hazardous waste facilities with permits,