196
13 CFR Ch. I (1–1–06 Edition)
§ 115.69
§ 115.69 Imminent Breach.
(a) No prior approval requirement. SBA
will reimburse a PSB Surety for the
guaranteed portion of payments the
Surety makes to avoid or attempt to
avoid an Imminent Breach of the terms
of a Contract covered by an SBA guar-
anteed bond. The PSB Surety does not
need SBA approval to make Imminent
Breach payments.
(b) Amount of reimbursement. The ag-
gregate of the payments by SBA under
this section cannot exceed 10% of the
Contract amount, unless the Adminis-
trator finds that a greater payment
(not to exceed the guaranteed portion
of the bond penalty) is necessary and
reasonable. In no event will SBA make
any duplicate payment under any pro-
vision of these regulations in this part.
(c) Recordkeeping requirement. The
PSB Surety must keep records of pay-
ments made to avoid Imminent Breach.
§ 115.70 Claims for reimbursement of
Losses.
(a) How claims are submitted. A PSB
Surety must submit claims for reim-
bursement on a form approved by SBA
no later than 1 year from the date the
Surety paid the amount. Loss is deter-
mined as of the date of receipt by SBA
of the claim for reimbursement, or as
of such later date as additional infor-
mation requested by SBA is received.
Subject to the offset provisions of part
140, SBA pays its share of Loss within
90 days of receipt of the requisite infor-
mation. Claims for reimbursement and
any additional information submitted
are subject to review and audit by
SBA.
(b) Surety responsibilities. The PSB
Surety must take all necessary steps
to mitigate Losses when legal action
against a bond has been instituted,
when the Obligee has declared a de-
fault, and when the Surety has estab-
lished a claim reserve. The Surety may
dispose of collateral at fair market
value only. Unless SBA notifies the
Surety otherwise, the Surety must
take charge of all claims or suits aris-
ing from a defaulted bond, and com-
promise, settle or defend the suits. The
Surety must handle and process