Florida Money Services Bond: A Comprehensive Guide

April 21, 2021

Florida Money Services Bond

This guide provides information for insurance agents to help money services businesses obtain Florida Money Services Bonds

At a Glance:

  • Average Cost: Between 1% to 12.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: Based on the projections of the total dollar amount of funds transmitted during the applicant’s first year in business:

Table 1.1

Fund Transmissions Bond Amount
$0 – $50,000 $50,000
$50,001 – $100,000 $100,000
$100,001 – $150,000 $150,000
$150,001 – $200,000 $200,000
$550,001 – $600,000 $600,000
$1,950,001 – $2,000,000 $2,000,000

The bond limit ranges from $50,000 to $2 million and increases by $50,000 increments until the maximum limit is reached

  • Who Needs it: All money services businesses operating in Florida
  • Purpose: To ensure the public will receive compensation for any damages should the money services business fail to comply with the licensing regulations
  • Who Regulates Money Services Businesses in Florida: The Florida Office of Financial Regulation

Background

Florida Statute 560 requires all money services businesses operating in the state to register with the Office of Financial Regulation. The Florida legislature enacted the licensing laws and regulations to ensure that money services businesses engage in ethical business practices. In order to provide financial security for the enforcement of the law, money services businesses must purchase and maintain a surety bond (limits outlined in Table 1.1) to be eligible for licensure.

What is the Purpose of the Florida Money Services Bond?

Florida requires money services businesses to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the money services business fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the money services business breaks licensing laws.

Florida Money Services Bond Form

Florida Money Services Bond Form

How Can an Insurance Agent Obtain a Florida Money Services Surety Bond?

BondExchange makes obtaining a Florida Money Services Bond easy. Simply login to your account and use our keyword search to find the “money” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (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.

Is a Credit Check Required for the Florida Money Services Bond?

Surety companies will run a credit check on the owners of the money services business to determine eligibility and pricing for the Florida Money Services bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may 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 owner’s credit.

How Much Does the Florida Money Services Bond Cost?

The Florida Commercial Money Services surety bond can cost anywhere between 1% to 12.5% 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 $100,000 bond requirement.

$100,000 Money Services Bond Cost

Table 1.2

Credit Score Bond Cost (1 year)
720+ $1,000
680 – 719 $1,500
650 – 679 $2,000
600 – 649 $4,000
550 – 599 $7,500
500 – 549 $12,500

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Florida Define “Money Services Business?”

Florida Statute 560.103 defines a money services business as any business entity who acts as a payment instrument seller, foreign currency exchanger, check casher, or money transmitter.

How do Money Services Businesses Apply for a License in Florida?

Money services businesses in Florida must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.

License Period – The Florida Money Services Business License is valid for two years and expires on April 30 for money transmitters, and December 31 for check cashers and foreign currency exchangers

Step 1 – Determine the License Type

Florida requires money services businesses to obtain specific licenses corresponding to the nature in which their business operates. Below are the different types of the Florida Money Services Business License:

    • Part II: Required for payment instrument and funds transmission businesses
    • Part III: Required for check cashing and foreign currency exchange businesses

Step 2 – Meet the Net Worth Requirements (Part II Applicants Only)

Part II license applicants must have a company net worth (assets – liabilities) of at least $100,000 plus an additional $10,000 per branch location to a maximum of $2 million. Applicants must submit an audited financial statement verifying their net worth when submitting their license application.

Step 3 – Purchase a Surety Bond

Money services businesses must purchase and maintain a surety bond (limits outlined in Table 1.1)

Step 4 – Complete the Application

All Florida Money Services Business License applications can be filed electronically. Money services businesses must complete the application in its entirety, and pay the following fees:

    • $375 application fee for Part II license applicants
    • $188 application fee for Part III license applicants

How Do Florida Money Services Businesses Renew Their License?

Money services businesses can renew their license electronically here. The Florida Money Services Business License is valid for two years and expires on April 30 for money transmitters, and December 31 for check cashers and foreign currency exchangers.

What Are the Insurance Requirements for the Florida Money Services Business License?

The State of Florida does not require money services businesses to purchase any form of liability insurance as a prerequisite to obtaining a business license. Money Services Businesses must purchase and maintain a surety bond (limits outlined in Table 1.1).

How Do Florida Money Services Businesses File Their Bond?

Money services businesses should submit the completed bond form, including the power of attorney, electronically here. The money services surety bond requires signatures from both the surety company that issues the bond and a representative from the money services business. 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 and state of incorporation
    • Bond amount
    • Date the bond goes into effect
    • Date the bond is signed
    • Witness signatures for the principal and surety company

What Can Florida Money Services Businesses Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, money services businesses must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Properly account for all funds received from consumers
  • Do not engage in any acts of fraud

What Other Insurance Products Can Agents Offer Money Services Businesses in Florida?

Florida does not require money services businesses to purchase any form of liability insurance. 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 Florida Money Services Business Customers Customers?

Florida conveniently provides a public database to search for active money services businesses 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.

2021-12-28T15:20:59-05:00