If a cash deposit is given instead of a bond, how long must it be held by the department?

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Multiple Choice

If a cash deposit is given instead of a bond, how long must it be held by the department?

A cash deposit posted instead of a bond is kept by the department to guarantee payment of any claims during the license period and for a fixed tail period after expiration. The correct retention is for the life of the license and four years after expiration, ensuring funds are available to satisfy any post-expiration claims. Five years or two years after expiration don’t cover the full tail required, and “until claim is resolved” implies an indefinite period, which isn’t the policy.

A cash deposit posted instead of a bond is kept by the department to guarantee payment of any claims during the license period and for a fixed tail period after expiration. The correct retention is for the life of the license and four years after expiration, ensuring funds are available to satisfy any post-expiration claims. Five years or two years after expiration don’t cover the full tail required, and “until claim is resolved” implies an indefinite period, which isn’t the policy.

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