Form E-857 (v. 20180619)
Phone: (602) 364-3450
Attn: Service Company Permit Team
Arizona Department of Insurance
100 North 15th Avenue, Suite 261
Phoenix, Arizona 85007-2630
Email: ebowsher@azinsurance.gov
BOND OF SERVICE COMPANY
KNOW ALL MEN BY THESE PRESENTS, that we,
, as Principal and Applicant for a Service Company's Permit (hereinafter "the Principal"), and
, a corporate surety authorized to
transact business in the State of Arizona, as Surety, (hereinafter "the Surety"), are held and firmly bound unto
the State of Arizona, as Obligee, for the benefit and protection of Arizona service contract holders, in the
amount of $ , lawful money of the United States of America, for the payment whereof,
the said Principal and Surety bind themselves and their heirs, administrators, executors, successors and
assigns, jointly and severally, firmly by these presents.
WHEREAS, the Principal desires to sell and hereafter sell certain service contracts in Arizona pursuant to the
provisions of Title 20, Chapter 4, Article 11 of the Arizona Revised Statutes; and
WHEREAS, Section 20-1095.04 of said Article 11 stipulates that the Principal shall assure faithful performance
of its obligations to contract holders.
NOW, THEREFORE, the conditions of this obligation are such that if the said Principal shall faithfully perform
(his/her/its) duties as Service Company and fulfill all obligations imposed upon said Principal by the provisions
of Title 20, Chapter 4, Article 11, Arizona Revised Statutes, then this bond shall be void, otherwise to remain in
full force and effect, subject to the following conditions:
1. In the event the Principal becomes insolvent or fails to pay any valid service contract claim, the service
contract holder shall be deemed to be an insured of the Surety and may, in addition to any other remedy
that he/she may have, bring action in his/her own name on this bond for the recovery of damage sustained
by him under the terms of the service contract.
2. The total aggregate liability of the surety hereon shall be limited to the sum of $ .
3. This bond shall be deemed continuous in form and shall remain in full force and effect unless terminated or
cancelled in a manner hereinafter provided.
4. This bond covers all service contracts issued or sold by Principal during the policy term excluding those
contracts for which a motor vehicle manufacturer is financially responsible.
5. In the event Surety is placed into receivership, service contract holders of the Principal shall be deemed to
be policyholders for purpose of receivership.
6. This bond may not be terminated for any reason without 30 days written notice to the State of Arizona,
Director of Insurance, by registered mail.
7. In the event the Principal’s service contract holders are deemed to be insureds of the company under the
provisions of this bond, the terms of the bond shall provide that any failure on the part of the Principal to
pay any amount due and owing under a service contract or warranty plan shall be covered by this bond to
the same extent as the coverage provided by the service or warranty plan.
8. In the event this bond is terminated for any reason, the Surety shall remain liable for all sums arising out of
any service contract or warranty plan covered by this bond prior to the effective date of the bond
termination.
9. No act, error or omission of the Principal shall prejudice this bond as respects the Principal’s service
contract holders. However, the terms of this provision shall not inure to the benefit of the Principal.
