|
November 29, 2012 (Special Meeting) Page 1306
<br />there not to be a gap in the office such that services of the register of
<br />deeds would not be available to the citizens.
<br />White: Cause it sounds like what you're - what you're, what you've explained
<br />to us is very similar to a life insurance or medical insurance in regards to
<br />a prior existing condition. Cause if you have a prior existing condition
<br />that you don't notify the insurance company of, and they find out about it,
<br />they can say "Well we're not going to insure you." You know if I'm a smoker
<br />and I'm insured, but I don't tell them I smoke and then all of a sudden I get
<br />cancer, they could say "Well I'm not gonna insure you." That's in essence
<br />what you're telling us, isn't it?
<br />Koch: I would say it's very similar, yes.
<br />White: And the difference is that now I'm having to pay for my own medical
<br />bills, or in this instance, unfortunately - if something were to
<br />unfortunately happen - then those who go forth would have to pay for that
<br />expense if it happened once up to $50,000, if it happened four times up to
<br />$200,000.
<br />Koch: I think it is very similar and there are certainly other instances in
<br />the law where if you - if it's determined that information which was in your
<br />knowledge or in your possession, was not given to a person or entity that has
<br />obligated itself to stand good for some duty or obligation, then that person
<br />who has obligated themselves in that way, whether it by being a surety or in
<br />any other capacity, could come back and say "You didn't tell me something
<br />that I should have known about, that would have affected my decision as to
<br />whether to oblige myself - or obligate myself - for that risk; and therefore,
<br />because you didn't tell me and you had reason to believe or think that that
<br />might affect my decision, I'm going to not honor that commitment to obligate
<br />myself for what you had asked me to do." And that arises in a number of
<br />areas of the law, it's a pretty common concept.
<br />White: Now in regards to the county bonding company, who provided the
<br />information to the county bonding company as to the application, do we know?
<br />I mean, I know somebody knows, but -
<br />Koch: Well Mr. Small filled out an application and submitted it to the
<br />county, which in turn - I believe this is right - submitted it to the county,
<br />who in turn, turned it in to - I think it was either our agent - help me Tony
<br />on that one - turned it in to the agent. Most of these surety companies work
<br />through local or regional agents, as I understand it, so-
<br />White: Mr. Harris?
<br />Harris: Yes, we - once we received the application we submitted it to our
<br />agent, who in turn submitted it a broker.
<br />White: Is that something we can look at?
<br />Harris: The application, yes. I have the application.
<br />White: Would we have the ability to compare that (inaudible) to the
<br />application that was given to CNA /Western or to Western Insurance?
<br />Harris: If we have received it, if we receive a copy of his application,
<br />yes.
<br />White: Mr. Koch, couple more questions. If you will turn to 58- 72 -60.
<br />Koch: Yes, sir.
<br />White: The second line after the comma it says "insufficient in the penal
<br />sum or in the security thereof ".
<br />Koch: Yes.
<br />White: Would you please, define or give me an understanding about what those
<br />independent statements are? You know when it says that "Every commissioner
<br />who approves an official bond, which he knows to be, or which by reasonable
<br />diligence he could have discovered to have been, insufficient in the penal
<br />sum, or in the security thereof, shall by liable..." So what does it mean to be
<br />"insufficient in the penal sum "?
<br />Koch: "The penal sum" refers to the face amount of the bond and that would
<br />go, in my reading of the statute, would go to whether Western Surety Company
<br />had sufficient assets to be able to stand good for $50,000. We have - I have
<br />no reason to believe based on checking that they're in good standing with the
<br />Department of Insurance - and just past experience with them that that would
<br />be an issue. I mean they're required to certify that they have sufficient
<br />reserves to be able to respond to any claims that are made on any bond that
<br />they have. And that's something that I can't profess to be an expert on what
<br />the requirements of the Department of Insurance are, but they're fairly
<br />strict in terms of what they have to show to their satisfaction that they
<br />have sufficient assets to be able to - to handle claims.
<br />White: Well, let's stop right there. When you're saying it's up to $50,000
<br />per claim, so if you have one claim it's 50, if you have a hundred claims
<br />it's 500,000. Excuse me, if you have a hundred claims it's 500,000, right?
<br />Koch: Yes, sir.
<br />White: So that's - I just want to make sure -
<br />Poole: If ten claims, it's 500,000.
<br />White: Right. Yeah, ten claims it's 500,000. A hundred claims it's
<br />5,000,000. And then how about -
<br />Koch: And they've - they've got - the commissioners, the commissioner of
<br />insurance has requirements where they evaluate that and we usually I think
<br />can rely on the way that they calculate that.
<br />
|