Nevada Insurance Commissioner Alice Molasky-Arman has ordered
Global Bonding and its principal, Robert Joe Hanson to pay administrative fines of $60,000 each for reportedly acting as an unauthorized insurer in the state of Nevada.
The order was a result of a public hearing held on Feb. 26, 2004 at the Division’s offices. Neither Hanson nor representatives for Global Bonding appeared at the hearing.
In December 2003, Molasky-Arman ordered Global and Hanson to cease and desist operating in and from Nevada for allegedly selling unlicensed surety bonds in Nevada and other states. State regulators in Georgia and Florida issued similar cease and desist orders against Global and Hanson shortly thereafter.
Global was registered with the Secretary of State as a Nevada corporation with a physical address in Las Vegas at 6402 McLeod Drive, Suite 5. Additional locations are in Fort Worth, Texas and Albuquerque, New Mexico.
State and other public agencies typically require contractors to buy surety bonds, which guarantee work will be performed according to contract specifications. If the contractor defaults, the surety company is responsible for completing contract obligations. Unlike legitimate, licensed surety companies, in the case of unauthorized surety business, there is no way for regulators or consumers to determine whether assets truly exist to back the bonds.
A new Nevada law, which became effective on Oct. 1, 2003, states that any person or entity who knowingly represents or aids an unauthorized insurer is guilty of a category C felony. Persons committing subsequent violations are subject to a category B felony. Those individuals and entities could also be held personally liable. The Division of Insurance is only authorized to take administrative action, such as the issuance of cease and desist orders and the sanction of administrative fines and penalties.
Global Bonding and Hanson have the right to file for reconsideration or a petition for judicial review.
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