Oklahoma § 59-2007 - Bond or letter of credit required

§ 59-2007. Bond or letter of credit required

A. 1. Every health spa, before it enters into a health spa

contract or membership agreement or accepts an initiation or

prepayment fee in excess of Fifty Dollars ($50.00), shall file and

maintain with the Administrator, in form and substance satisfactory

to him, a bond with a corporate surety, from a company authorized to

transact business in this state or a letter of credit from a bank

insured by the Federal Deposit Insurance Corporation in the amounts

indicated below:

Number of unexpired

Amount of bond

contracts or membership agreements

or letter of

exceeding six (6) months

credit

500 or less

$30,000.00

501 to 1000

$40,000.00

1001 to 1500

$50,000.00

1501 to 2000

$60,000.00

2001 or more

$70,000.00

2. The number of unexpired contracts or membership agreements

exceeding six (6) months shall be separately calculated for each

location where health spa services are offered.

3. Each separate location where health spa services are offered

shall be considered a separate health spa and shall file a separate

bond or letter of credit with respect thereto, even though the

separate locations are owned or operated by the same owner.

4. No owner shall be required to file with the Administrator

bonds or letters of credit in excess of Seventy Thousand Dollars

($70,000.00). If the seventy-thousand-dollar limit is applicable,

then the bonds or letters of credit filed by such owner shall apply

to all health spas owned or operated by the same owner.

B. The bond or letter of credit required by this section shall

be in favor of the state for the benefit of:

1. any buyer injured by having paid money to the health spa

posting the bond or letter of credit for health spa services in a

facility which fails to open within sixty (60) days after the date

Oklahoma Statutes - Title 59. Professions and Occupations

upon which the buyer and the health spa entered into a contract or

membership agreement or goes out of business prior to the expiration

of the buyer's health spa contract or membership agreement; or

2. any buyer injured as a result of a violation of the Oklahoma

Health Spa Act by the health spa posting the bond or letter of

credit.

C. The aggregate liability of the bond or letter of credit to

all persons for all breaches of the conditions of the bond or letter

of credit shall in no event exceed the amount of the bond or letter

of credit. The bond or letter of credit shall not be canceled or

terminated except with the consent of the Administrator.

Added by Laws 1987, c. 217, § 9, eff. Nov. 1, 1987. Amended by Laws

1988, c. 215, § 6, eff. Nov. 1, 1988. Renumbered from Title 15, §

775.7 by Laws 1988, c. 215, § 12, eff. Nov. 1, 1988; Laws 1991, c.

96, § 7, eff. Sept. 1, 1991.