Connecticut Lottery Sales Agent Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Connecticut Lottery Sales Agent Bond
At a Glance:
- Lowest Cost: 1.5% of the bond amount per year based on the applicant’s credit
- Bond Amount: Determined on a case by case basis (more on this later)
- Who Needs it: Connecticut lottery sales agents (retailers) who do not meet the lottery corporation’s financial responsibility requirements
- Purpose: To ensure the public will receive compensation if the sales agent fails to remit all funds owed to the Lottery Corporation
- Who Regulates Lottery Sales Agents In Connecticut: The Connecticut Lottery Corporation
Background
Connecticut statute 12-813 grants the lottery corporation the authority to require sales agents to purchase a surety bond prior to receiving a retailer license. The Connecticut legislature enacted the bonding requirement to ensure that the lottery corporation receives all funds owed to them by retailers. The bond amount is determined on a case-by-case basis and is set by the lottery corporation.
What is the Purpose of the Connecticut Lottery Sales Agent Bond?
Connecticut requires certain lottery sales agents to be bonded prior to obtaining a retailer license. The bond ensures that the lottery corporation will receive all funds owed to them by retailers, even if they don’t have the ability to pay. The Connecticut Lottery Sales Agent bond does not protect the retailer who purchases it, but rather the Connecticut Lottery Corporation.
How Can an Insurance Agent Obtain a Connecticut Lottery Sales Agent Bond?
BondExchange makes obtaining a Connecticut Lottery Sales Agent surety bond easy. Simply log in to your account and use our keyword search to find the “lottery” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How is the Bond Amount Determined?
Connecticut statute 12-813 grants the lottery corporation the authority to determine the required bond amount for each individual retailer on a case by case basis. The lottery corporation will examine the retailer’s application, and then set a bond amount based on the retailer’s creditworthiness and business financial responsibility. The lottery corporation will ensure that the bond’s limit covers all potential losses the corporation may suffer.
Is a Credit Check Required for the Connecticut Lottery Sales Agent Bond?
Surety companies will run a credit check on the sales agent to determine eligibility and pricing for the Connecticut Lottery Sales Agent bond. Agents with excellent credit and work experience can expect to receive the best rates. Agents with poor credit will likely be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the agent’s credit.
How Much Does the Connecticut Lottery Sales Agent Bond Cost?
The Connecticut Lottery Sales Agent surety bond can cost anywhere between 1.5% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.
$10,000 Lottery Sales Agent Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $150 | $15 |
| 650 – 799 | $200 | $20 |
| 600 – 649 | $500 | $50 |
Who is Required to Purchase a Bond?
The Connecticut Lottery Corporation will determine whether a sales agent needs to purchase a bond after reviewing their license application. When examining an agent’s application, the lottery corporation will examine factors such as the applicant’s creditworthiness and business financial responsibility to determine whether or not they need a bond. If the sales agent has poor credit and financial responsibility, then the lottery corporation may require them to purchase a bond in an amount large enough to ensure they do not suffer any losses if the agent is unable to pay all funds owed.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Retailers Apply for a Lottery License in Connecticut?
Lottery sales agents in Connecticut must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application packet for details on the process.
License Period – All Connecticut Lottery Retail Licenses expire on March 31 and must be renewed before their expiration date
Step 1 – Complete the Application
All Connecticut Lottery Retailer License applications should be mailed to the following address:
Connecticut Lottery Corporation/Retailer Services
777 Brook Street
Rocky Hill, CT 06067
Step 2 – Submit the Additional Documents
Once the lottery corporation has received the agent’s application, they will mail them instructions on how to proceed with the application process. The lottery corporation will require the applicant to submit the following documents:
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- Bank letter verifying the applicant’s applicable bank account(s)
- Auto-pay and wire transfer form
- Letter of closing or bill of sale (only if the business is being transferred)
- Business lease
Step 3 – Purchase a Surety Bond
After reviewing the agent’s application and creditworthiness, the lottery corporation will determine whether or not the applicant needs to purchase a surety bond. If the applicant is required to purchase a bond, they must buy one in an amount set by the lottery corporation.
How Do Connecticut Lottery Sales Agents Renew Their License?
Sales agents should mail their completed renewal application to the following address:
Connecticut Lottery Corporation/Retailer Services
777 Brook Street
Rocky Hill, CT 06067
All Connecticut Lottery Retail Licenses expire on March 31 and must be renewed before their expiration date.
What Are the Insurance Requirements for the Connecticut Lottery Retailer License?
Connecticut does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. Retailers with poor credit and business financials may need to purchase a surety bond in an amount set by the lottery corporation.
How Do Connecticut Lottery Sales Agents File Their Bond?
Lottery sales agents should mail their completed bond form, including the power of attorney, to the following address:
Connecticut Lottery Corporation/Retailer Services
777 Brook Street
Rocky Hill, CT 06067
The Connecticut Lottery Sales Agent surety bond requires signatures from both the surety company that issues the bond and a representative from the retail organization. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
- Witness signatures for the principal and surety company
What Can Connecticut Lottery Sales Agents Do to Avoid Claims Against Their Bond?
To avoid claims against their bond, lottery sales agents in Connecticut must ensure that they remit all funds owed to the lottery corporation.
What Other Insurance Products Can Agents Offer Lottery Sales Agents in Connecticut?
Connecticut does not require lottery sales agents to obtain any form of liability insurance as a prerequisite to obtaining a retailer license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Connecticut Lottery Sales Agent Customers?
Connecticut conveniently provides a public database to search for active lottery sales agents in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services