Home / General / I guess his word is literally his bond

I guess his word is literally his bond

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At some point you just have to laugh:

The little-known insurance company that rescued Donald Trump by providing a last-minute $175 million bank fraud bond isn’t just unlicensed in New York; it hasn’t even been vetted by a voluntary state entity that would verify it meets minimum “eligibility standards” to prove financial stability.

Perhaps even more troubling, the legal document from Knight Specialty Insurance Company doesn’t actually promise it will pay the money if the former president loses his $464 million bank fraud case on appeal. Instead, it says Trump will pay, negating the whole point of an insurance company guarantee, according to three legal and bond experts who reviewed the contract for The Daily Beast.

“This is not common… the only reason this would be done is to limit the liability to the surety,” said N. Alex Hanley, an expert in how companies appeal enormous judgments.

The total number of bonds I’ve seen in which the the issuer of the bond wasn’t jointly and severally liable with the client is . . . let’s see here . . . three carry the one divided by . . . Wait a second . . .

It looks more like a piece of paper that says Donald Trump is going to pay you and if he doesn’t we don’t promise to do anything about that! HOW IS THIS A BOND EXACTLY?

Oh and there’s more. A lot more, as Marty DiBergi might say:

Just like federal regulators require financial institutions to have sufficient reserves in case of a run on the banks, New York law limits how much money state-regulated surety companies can post on a single bond to 10 percent of a firm’s total “capital and surplus.” However, a court filing by the company on Thursday showed that Knight Specialty only has $138 million in “surplus,” vastly exceeding the government-set cap because the Trump bond alone makes up 127 percent of the company’s reserves.

“Based on the financial statement provided, Knight Specialty is providing a bond that is one-third of its total assets and greater than its surplus, which is incomprehensible for a carrier to underwrite,” said Vullo, who was previously the superintendent of New York’s DFS.

Laugh or cry, I suppose.

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