Article 5. Indemnity Bonds of California Financial Code >> Division 2. >> Chapter 3. >> Article 5.

Except as provided in subdivision (b) of Section 6203, all directors, officers, and employees of an association shall, before entering upon the performance of any of their duties, execute their individual bonds with adequate corporate surety payable to the association as an indemnity for any loss the association may sustain of money or other property by or through any fraud, dishonesty, forgery or alteration, larceny, theft, embezzlement, robbery, burglary, hold-up, wrongful or unlawful abstraction, misapplication, misplacement, destruction or misappropriation, or any other dishonest or criminal act or omission by the director, officer, or employee.

Associations that employ collection agents, who for any reason are not covered by a bond required under Section 6200, shall provide for the bonding of each of those agents in an amount equal to at least twice the average monthly collection of the agent. The agents shall be required to make settlement with the association at least monthly.

No indemnity bond coverage is required of any agent that is a financial institution insured by the Federal Deposit Insurance Corporation.

(a) The amounts and form of indemnity bonds and sufficiency of the surety shall be approved by the board of directors and by the commissioner.
  (b) In lieu of individual bonds, a blanket bond, protecting the association from loss through any act or acts of any director, officer, employee or agent, may be obtained.
  (c) A true copy of every indemnity bond shall be on file at all times at the association's home office.

Indemnity bonds shall provide that their cancellation either by the surety or by the insured shall not become effective unless and until 10 days' notice in writing first shall have been given to the commissioner, unless the cancellation is approved earlier by the commissioner.