Indiana introduces PEO surety bond requirement

PEO

Indiana Code 27-16-6 was passed during the 2013 regular session of the Indiana General Assembly. This legislation creates a surety bond requirement for PEOs (professional employer organizations). IC 27-16-6 states the following:

Financial requirements
Sec. 1. (a) A PEO or PEO group shall do one (1) of the following:

(1) Maintain positive working capital, as reflected in the
financial statement submitted to the department by the PEO or
PEO group under IC 27-16-4.
(2) If the PEO or PEO group does not meet the requirement of
subdivision (1), maintain any of the following with a minimum
aggregate value in an amount that is at least sufficient to
eliminate the PEO’s or PEO group’s negative working capital
plus one hundred thousand dollars ($100,000):

(A) A surety bond.
(B) An irrevocable letter of credit.
(C) Cash.
(D) A combination of items listed in clauses (A) through (C).”

This means that if an Indiana PEO agent or organization does not maintain a positive working capital, they must obtain a surety bond in order to continue their services.

To read the full text of IC 27-16, click here.

If you’re in need  of a surety bond in Indiana or any other state, contact SuretyBonds.com online 24/7 or by phone at 1 (800) 308-4358 Monday through Friday between 8 a.m. and 7 p.m. CST. Our surety experts are on hand, ready to answer your questions and provide you with fast, easy and accurate bonding services. Get your free, no-obligation bond quote today!

About the Author

Jon Gottschalk
Jon Gottschalk is the Educational Outreach Director for Suretybonds.com and regularly blogs at the Surety Bond Insider to keep consumers informed on new legislation and updates in the commercial surety industry. He is also a licensed property & casualty insurance producer in Missouri.