Which entities are exempt from bond requirements?

State and local government agencies are exempt from bond requirements because they are public entities established by law to serve the public interest. These agencies often have the backing of the government, which provides a level of assurance and stability that private individuals or businesses do not have. As a result, the law recognizes that the accountability and oversight mechanisms already in place for government agencies diminish the need for a bond.

In contrast, private businesses, trust companies, and individual fiduciaries typically face bond requirements as a safeguard for the protection of the assets they manage. Bonds serve to ensure that fiduciaries act in accordance with the law and that they have some form of insurance or financial backing in case of misconduct or mismanagement. Therefore, the special status of state and local government agencies allows them to operate without the additional requirement of a bond.