[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR115.15]

[Page 184]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 115_SURETY BOND GUARANTEE--Table of Contents
 
           Subpart A_Provisions for All Surety Bond Guarantees
 
Sec.  115.15  Underwriting and servicing standards.

    (a) Underwriting. (1) Sureties must evaluate the credit, capacity, 
and character of a Principal using standards generally accepted by the 
surety industry and in accordance with SBA's Standard Operating 
Procedures on underwriting and the Surety's principles and practices on 
unguaranteed bonds. The Principal must satisfy the eligibility 
requirements set forth in Sec.  115.13. The Surety must reasonably 
expect that the Principal will successfully perform the Contract to be 
bonded.
    (2) The terms and conditions of the bond and the Contract must be 
reasonable in light of the risks involved and the extent of the Surety's 
participation. The bond must satisfy the eligibility requirements set 
forth in Sec.  115.12(b). The Surety must be satisfied as to the 
reasonableness of cost and the feasibility of successful completion of 
the Contract.
    (b) Servicing. The Surety must ensure that the Principal remains 
viable and eligible for SBA's Surety Bond Guarantee Program, must 
monitor the Principal's progress on bonded Contracts guaranteed by SBA, 
and must request job status reports from Obligees of Final Bonds 
guaranteed by SBA. Documentation of the job status requests must be 
maintained by the Surety.