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What is a Lost Stock Certificate Surety Bond?




lost stock certificate bondA Lost Stock Certificate Surety Bond is required by the issuing company of the stock, through its transfer agent. The purpose of the bond is to protect the corporation and the agent in case the lost certificate is somehow redeemed by another party at a later date.

Regardless of whether a shareholder loses his or her stock certificate, that person still owns the shares. There are a number of steps required in order to replace the stock certificate and the lost instrument bond is just one step.  To replace a lost stock certificate the shareholder must:

  • Contact the company’s stock transfer agent. One can usually find the name and contact information of the transfer agent on the website of the company that issued the stock.
  • The shareholder must describe the loss and any facts surrounding the loss in an affidavit. The insurance company underwriting the lost stock certificate bond will require a copy of this affidavit.
  • The transfer agent will place what is called a “stop transfer” on the certificate to prevent others from cashing it in. This is much like the stop payment that you might place on a check at your local bank.
  • The transfer agent or the broker-dealer will then notify the SEC of the lost or missing certificates.

Here at Surety1, we write these bonds starting off at anywhere between 1% to 3% of the bond amount. The bond amount required for these bonds is always the present day value of the Stock, however the bonds are usually considered “open penalty”. This means the actual potential loss on the surety bond would be based on the value of the stock at the time of the loss.

If you need a Lost Stock Certificate Surety Bond, apply here. Once we receive your application, we will get back to you with a firm quote, usually within a few hours of applying. (If during normal business hours).




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14 thoughts on “What is a Lost Stock Certificate Surety Bond?”

  1. david c delaney says:

    I am looking to acquire a lost certificate bond with a current face value of approximately $50,000. Can u tell me what your rate would be.

    1. John Page says:

      Open penalty stock certificate is 1.5% of the current value of the stock.

  2. Arthur Doohickey says:

    I am owner of a lost stock certificate with value of $33,000. Originally, I was a joint tenant on the lost certificate, but the other joint tenant died about four years ago. The transfer agent says I need to obtain an open penalty surety bond to obtain a new certificate (book entry) in my name. How much do you expect such a bond will cost me?

  3. Dana Foust says:

    In 1967, Federal Insurance Company (chubb) was the Surety Bond Agent for a transaction between National Distillers and Holland House Brands. I own 76 medallion stamped certificates out of 2500 shares of capital stock of Holland House Products inc. , (a subsidiary of Holland House Brands)purchased by my Grandfather in 1938. I am trying to Value the shares! Does Federal Insurance Company have this information or is there a Depository Bank or Transfer Agent that needs to be found?

    1. John says:

      Wish I could help you out here. Chubb is an insurer, they are still around but I am not sure how they would be involved in the transaction you mention. That is the only information I can provide you, sorry not to be of more help.

  4. David Zimmerman says:

    My aunt recently passed away and has 1628 shares of Sensient Technologies Corp. (SXT) held in certificate form. We cannot find the stock certificates and have notified Equinity, which has placed a stop transfer order against the certificates. The company is requiring an Open Penalty Indemnity bond from a surety company. What is your rate to indemnify securites worth approximately $105, 000, and are there ancillary costs involved? What is your AM Best rating?

    1. John says:

      1.5% of the value of the stock at the time the stop notice was issued by the transfer agent. We are a broker and represent several markets, all with n AM best rating of A-10 or better.

  5. Jim Feagle says:

    Approx. 1 year ago, I lost a stock certificate for CITIGROUP, paid approx. $500 for a lost security bond so that the stock could be sold. Cleaning up my wife and I found the original stock certificate. Can I submit the original certificate to the bonding company for a partial refund of the bond since the risk they are insuring against is no longer there or is the bonding fee really just an up front fee not tied to future risk. Thoughts appreciated.

    1. John says:

      The certificates have already been replaced after that much time so I doubt the surety would allow for a refund.

  6. Stewart says:

    Is there an expiration date on a lost stock certificate bond with an open penalty?

  7. richard stanfield says:

    I have a question about open penalty surety bond: I need to obtain one to replace some old Trigon shares that were lost over the years. The transfer agent “Computershare” is requiring the bond to indemnify both the obilgee and the principal and the surety bonding company has dug their heels in and are refusing to write the bond indemnifying both parties against any and all losses, does that make sense or is someone being unreasonable or unrealistic?

    Thank you for any input you might have as I”m a newbie and hope to never go through this again.

    1. John says:

      First, I will start by saying Computershare is the most difficult transfer agent to work with. We have had bonds rejected on a particular form and then the next week, we are told we used the wrong form and they want us to use the form that was just rejected the week before. I think there are a lot of individuals that do not understand the purpose of the surety bond and they seem to make the rules up as they go along. That said, we have a lot of experience with Computershare and have never not be able to get the bond in a form acceptable to them. You can apply https://surety1.com/lost-instrument-bond-application/ or feel free to fax over the application you have already completed and we will get the bond placed for you.

      That said,

    2. John says:

      First, I will start by saying Computershare is the most difficult transfer agent to work with. We have had bonds rejected on a particular form and then the next week, we are told we used the wrong form and they want us to use the form that was just rejected the week before. I think there are a lot of individuals that do not understand the purpose of the surety bond and they seem to make the rules up as they go along. That said, we have a lot of experience with Computershare and have never not be able to get the bond in a form acceptable to them. You can apply https://surety1.com/lost-instrument-bond-application/ or feel free to fax over the application you have already completed and we will get the bond placed for you.

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