[Code of Federal Regulations]

[Title 49, Volume 5]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 49CFR387.307]



[Page 294-295]

 

                        TITLE 49--TRANSPORTATION

 

                      DEPARTMENT OF TRANSPORTATION

 

PART 387_MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR CARRIERS

--Table of Contents

 

Subpart C_Surety Bonds and Policies of Insurance for Motor Carriers and 

                            Property Brokers

 

Sec. 387.307  Property broker surety bond or trust fund.



    (a) Security. A property broker must have a surety bond or trust 

fund in effect for $10,000. The FMCSA will not issue a property broker 

license until a surety bond or trust fund for the full



[[Page 295]]



limits of liability prescribed herein is in effect. The broker license 

shall remain valid or effective only as long as a surety bond or trust 

fund remains in effect and shall ensure the financial responsibility of 

the broker.

    (b) Evidence of Security. Evidence of a surety bond must be filed 

using the FMCSA's prescribed Form BMC 84. Evidence of a trust fund with 

a financial institution must be filed using the FMCSA's prescribed Form 

BMC 85. The surety bond or the trust fund shall ensure the financial 

responsibility of the broker by providing for payments to shippers or 

motor carriers if the broker fails to carry out its contracts, 

agreements, or arrangements for the supplying of transportation by 

authorized motor carriers.

    (c) Financial Institution--when used in this section and in forms 

prescribed under this section, where not otherwise distinctly expressed 

or manifestly incompatible with the intent thereof, shall mean--Each 

agent, agency, branch or office within the United States of any person, 

as defined by the ICC Termination Act, doing business in one or more of 

the capacities listed below:

    (1) An insured bank (as defined in section 3(h) of the Federal 

Deposit Insurance Act (12 U.S.C. 1813(h));

    (2) A commercial bank or trust company;

    (3) An agency or branch of a foreign bank in the United States;

    (4) An insured institution (as defined in section 401(a) of the 

National Housing Act (12 U.S.C. 1724(a));

    (5) A thrift institution (savings bank, building and loan 

association, credit union, industrial bank or other);

    (6) An insurance company;

    (7) A loan or finance company; or

    (8) A person subject to supervision by any state or federal bank 

supervisory authority.

    (d) Forms and Procedures--(1) Forms for broker surety bonds and 

trust agreements. Form BMC-84 broker surety bond will be filed with the 

FMCSA for the full security limits under subsection (a); or Form BMC-85 

broker trust fund agreement will be filed with the FMCSA for the full 

security limits under paragraph (a) of this section.

    (2) Broker surety bonds and trust fund agreements in effect 

continuously. Surety bonds and trust fund agreements shall specify that 

coverage thereunder will remain in effect continuously until terminated 

as herein provided.

    (i) Cancellation notice. The surety bond and the trust fund 

agreement may be cancelled as only upon 30 days' written notice to the 

FMCSA, on prescribed Form BMC 36, by the principal or surety for the 

surety bond, and on prescribed Form BMC 85, by the trustor/broker or 

trustee for the trust fund agreement. The notice period commences upon 

the actual receipt of the notice at the FMCSA's Washington, DC office.

    (ii) Termination by replacement. Broker surety bonds or trust fund 

agreements which have been accepted by the FMCSA under these rules may 

be replaced by other surety bonds or trust fund agreements, and the 

liability of the retiring surety or trustee under such surety bond or 

trust fund agreements shall be considered as having terminated as of the 

effective date of the replacement surety bond or trust fund agreement. 

However, such termination shall not affect the liability of the surety 

or the trustee hereunder for the payment of any damages arising as the 

result of contracts, agreements or arrangements made by the broker for 

the supplying of transportation prior to the date such termination 

becomes effective.

    (3) Filing and copies. Broker surety bonds and trust fund agreements 

must be filed with the FMCSA in duplicate.



[53 FR 10396, Mar. 31, 1988]