(a) Before performing the duties of a trustee under AS 34.20.070 and 34.20.080, a person shall obtain a surety bond in the amount of $100,000 to protect the trustors and beneficiaries of trust deeds against fraud or defalcation by the trustee in the performance of the duties.
(b) The bond required by (a) of this section must be a bond that is terminable at any time by the surety by sending written notice by first class United States mail to the obligee and the principal at the address for each that is last known by the surety, and to the department. The bond terminates when 45 days have expired after the date the notice is mailed. The surety is not liable for an act or omission of the principal that occurs after the termination. The surety is not liable after the termination for more than the face amount of the bond, regardless of the number of claims made against the bond or the number of years the bond remains in force. A revision of the amount of the bond is not cumulative.
(c) If a bond terminates under (b) of this section, the person who obtained the bond under (a) of this section shall give notice of the bond's termination to the department and may not act as a trustee until the person obtains another bond under (a) of this section.
(d) Each year, a trustee shall file evidence of the bond with the department. The department shall verify that the evidence is satisfactory to indicate the existence of the bond, keep an updated list of trustees who are bonded, and make the evidence and the list available to the public for inspection. The department may charge the trustee a reasonable fee for verifying the existence of the bond and maintaining the records required by this subsection.
(e) The bonding requirements of this section do not apply to
(1) a state agency, including the Alaska Housing Finance Corporation and the Alaska Industrial Development and Export Authority; or
(2) an attorney who is licensed to practice law in this state and is an active member of the Alaska Bar.
(f) In this section, “department” means the Department of Commerce, Community, and Economic Development.
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