South Carolina Appraisal Management Company Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a South Carolina Appraisal Management Company bond.
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $25,000
- Who Needs it: Appraisal management companies operating in South Carolina that do not wish to provide a detailed statement describing their organization’s financial condition
- Purpose: To ensure the public will receive compensation for any damages if the appraisal management company violates registration law
- Who Regulates Appraisal Management Companies in South Carolina: The South Carolina Real Estate Appraisers Board
Background
South Carolina Statute 40-60-330 requires all appraisal management companies operating in the state to register with the Real Estate Appraisers Board. The South Carolina legislature enacted the registration requirement to ensure that appraisal management companies engage in ethical business practices. To provide financial security for the enforcement of the registration law, appraisal management companies that do not wish to provide a statement detailing their financial condition must purchase and maintain a $25,000 surety bond to be eligible for registration.
What is the Purpose of the South Carolina Appraisal Management Company Bond?
South Carolina requires appraisal management companies that elect not to provide a financial statement to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the company fails to comply with the regulations set forth in South Carolina Statute 40-60-310 et seq. Specifically, the bond protects appraisers in the event the company fails to pay them for any work performed. In short, the bond is a type of insurance that protects the appraisers if the appraisal management company does not pay them.
How Can an Insurance Agent Obtain a South Carolina Appraisal Management Company Surety Bond?
BondExchange makes obtaining a South Carolina Appraisal Management Company bond easy. Simply login to your account and use our keyword search to find the “Appraisal” 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 (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the South Carolina Appraisal Management Company Bond?
No, a credit check is not required for the South Carolina Appraisal Management Company bond. Because the bond is considered relatively low risk, the same low rate is offered to all appraisal management companies operating in the state, regardless of their credit history.
How Much Does the South Carolina Appraisal Management Company Bond Cost?
The South Carolina Appraisal Management Company bond costs either $250 per year or $25 per month.
Who is Required to Purchase the Bond?
South Carolina requires appraisal management companies that do not wish to provide a financial statement to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase South Carolina Statute 40-60-320, an appraisal management company is an organization that performs one or more of the following activities:
- Recruits, selects, and retains appraisers
- Contracts with licensed/certified appraisers to perform appraisal services
- Manages the appraisal process
- Reviews and verifies the work of individual appraisers
Exemptions to this definition include:
- Companies that employ appraisers rather than hire them as contractors
- Departments/units within financial institutions directly regulated by a government agency
- Persons hiring appraisers for single appraisals
- Appraisal management companies with appraisal panels that consist of:
- Less than 16 South Carolina appraisers
- Less than 25 appraisers across the US
- Subsidiaries of financial institutions regulated by federal agencies
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 South Carolina Appraisal Management Companies Apply for a Registration?
Appraisal management companies in South Carolina must navigate several steps to secure a business registration. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
License Period – All South Carolina Appraisal Management Company registrations expire on June 12 of every other year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Appraisal management companies must purchase and maintain a $25,000 surety bond or submit a detailed statement describing their organization’s financial condition.
Step 2 – Complete the Application
All South Carolina Appraisal Management Company Registration applications should be mailed to the following address:
South Carolina Real Estate Appraisers Board
P.O. Box 11329
Columbia, SC 29211-1329
Appraisal management companies must complete the application in its entirety and submit the following items:
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- Corporate resolution giving Controlling Person Authority (if applicable)
- Copy of the controlling person’s driver’s license or other valid ID
- National social security based criminal background check for all persons with at least a 10% ownership stake in the company
Companies must pay a $1,000 fee when submitting their applications.
How do South Carolina Appraisal Management Companies Renew Their Registrations?
Before the expiration date, appraisal management companies will receive a renewal notice containing instructions on how to renew their registrations. All South Carolina Appraisal Management Company registrations expire on June 12 of every other year and must be renewed before the expiration date.
What are the Insurance Requirements for Appraisal Management Companies in South Carolina?
South Carolina does not require appraisal management companies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Appraisal management companies that choose not to provide a financial statement must purchase and maintain a $25,000 surety bond.
How Do South Carolina Appraisal Management Companies File Their Bonds?
Appraisal management companies should mail their completed bond forms, including the power of attorney, to the following address:
South Carolina Real Estate Appraisers Board
P.O. Box 11329
Columbia, SC 29211-1329
The surety bond requires signatures from both the surety company that issues the bond and a representative of the appraisal management company. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name
- The company’s license term
- Date the bond is signed
What Can South Carolina Appraisal Management Companies do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, appraisal management companies in South Carolina must follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Pay all funds owed to appraisers
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Appraisal Management Companies in South Carolina?
South Carolina does not require appraisal management companies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of 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 South Carolina Appraisal Management Company Customers?
South Carolina conveniently provides a public database of active appraisal management companies in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.