Clock Ticks On ARC Bond Renewals

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BY FRAN DURBIN

WASHINGTON -- Approximately 1,500 travel agencies have been facing an April 1 deadline to get new Airlines Reporting Corp. bonds, and the message from ARC is "Move quickly."

The situation occurred because Hartford Insurance Co., the largest underwriter of ARC bonds, is pulling out of the market and is not renewing bonds on their anniversary dates.

ARC president David Collins said his staff sent out a number of reminders, including a pink postcard, and have been making personal calls to the agents to urge them not to wait until the last minute to apply for new bonds.

"These things take more than one day," Collins said in an interview.

Under the ARC contract, ARC has the right immediately to pick up the ticket stock and plates of an agency whose bond or letter of credit has lapsed. If the agency fails to get a replacement surety within 30 days, ARC will terminate its accreditation.

"We'd prefer not to be out picking up stock when April 1 comes along. We're doing everything we can to remind the agents that we need them to move quickly, and time is running out," Collins said.

The next major anniversary dates for Hartford bonds are June 1 and Sept. 1, which will affect an estimated 2,200 agencies.

Hartford had been issuing bonds through the Washington-based brokerage firm Seabury and Smith under the ASTA bonding program.

ASTA has endorsed a Seabury and Smith program with a different insurance company, as well as a second bonding program through the brokerage firm of Hess Egan Hagerty and L'Hommedieu of Chevy Chase, Md.

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