You should have recently received a mailing from us asking you to update your application with us. While I believe the intentions of this mailing were good, it was a very poorly worded letter that did not at all convey the message that we intended. All of us here at Construction Services sincerely apologize for any anger or resentment this letter may have caused. This letter implied that your bond would be cancelled and your license suspended if this application was not returned by January 9, 2008. This is absolutely NOT the case.
This mailing was sent on our behalf by Surety Company of the Pacific (SCP), the insurance carrier that your bond is placed with. Please allow me to explain why they need this updated application and when they need it by. After almost 40 years of being nearly the only surety company in California not to run credit checks, SCP is undergoing a change in their underwriting procedure and will run credit checks on new and renewal business. This change will most likely occur in June or July of 2009. This means that any bond that is up for renewal past this time will need to have an updated application turned in so that a credit check can be run. Unfortunately, if an updated application is not received, the rate on renewal will be quite high. On the bright side, most bonds will actually have a lower premium when the new underwriting procedure takes place.
The application that you used to obtain your bond does not authorize SCP to run a credit check, and this is why they need a new application. Other than the additional wording authorizing SCP to gather credit information, this is nearly the same Indemnity Agreement that you signed when you first obtained your bond from us. The authorization to run a credit check is the only reason that you are being asked to sign an updated application. No payment is due at this time.
It pains us that we need to ask our most loyal customers for this additional information and we apologize for any inconvenience this has caused you. If you have already returned an application to us or SCP, thank you very much for taking the time to do this. If you have not, we have enclosed an application for you to use. You can either return it to us in the supplied return envelope, or fax it to our office at (916) 856-5020. The fax number given last time was to SCP. They were not ready for the volume of faxes that they received and we apologize if you experienced trouble faxing your application to them.
If you would prefer not to include your social security number on this application, you can return it to us without this information and we will call you when we receive the application to get your social security number. Unfortunately, a credit check cannot be run without the social security number, so we do need it before we will be able to renew your bond at a reasonable premium. A proper credit check can not be run with a FEIN number, so even companies that are corporations need to provide the social security number of the president of the corporation.
Once again, I’d like to apologize for the inconvenience this has caused you as well as any misunderstandings from the last poorly worded letter you received from us. If you have any questions please do not hesitate to contact us at (800) 675-2000.
Sincerely,
Construction Services Insurance Agency
