North Carolina Collection Agency Bond
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How much does a collection agency bond cost in North Carolina?
The North Carolina Department of Insurance requires new collection agencies to file financial responsibility surety bonds in varying amounts depending on the applicant’s status. Domestic collection agencies (incorporated within North Carolina) and foreign collection agencies (incorporated outside of North Carolina) must post $10,000 initial surety bonds. Alien collection agencies (operating outside of the United States) must post $20,000 initial surety bonds.
Initial domestic collection agency bonds are issued instantly, starting at $100. Foreign and alien collection agency bonds, as well as domestic agency renewal bonds, are subject to underwriting consideration.
Why do I need this bond?
North Carolina collection agency financial responsibility surety bonds benefit any person, firm or corporation for whom or which the principal (collection agency) collects money on behalf of. By posting the bond, the principal agrees to uphold all rules and regulations of the state while engaged in the collection of accounts. By underwriting the principal’s bond, the surety assumes liability for the losses incurred if the principal conducts unlawful business. The principal must reimburse the surety for all damages paid out.
What’s the fine print?
Collection agency bonds in North Carolina remain in full force during the principal’s permit period and remain in effect until all monies collected by the agency on behalf of third parties have been accounted for.
The surety can cancel the bond by providing written notice of cancellation to both the principal and the Commissioner of Insurance at least 30 days prior to the effective termination date.
How to start a collection agency in North Carolina
To become a new collection agency in North Carolina, applicants must adhere to the following requirements:
- Pay the $1,050 licensing fee
- Obtain a license for each business location
- Submit all required supporting documents
- Provide proof of a trust account
- Post a surety bond in the proper amount
To renew a license, the licensee is responsible for the following:
- Renew their license by June 30
- Pay the $1,040 license fee
- Make all changes to addresses, telephone numbers, branch offices, corporate name and email addresses, if applicable
- Post a surety bond in the proper amount
Collection Agency Bonds Nationwide
Many collection agencies operate in multiple states, meaning they may be required to have multiple surety bonds. Get more information about other states’ collection agency bond requirements by selecting a state on the map below.
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Additional Resources
North Carolina Department of Insurance New Applicants and Existing Licenses Collection Agency FAQs
North Carolina Department of Insurance New/Initial Application Submission Collection Agency
North Carolina Department of Insurance Collection Agency Licensure Initial Application
North Carolina Department of Insurance Collection Agency License Renewal
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