NAFCU Journal March April 2021

39 THE NAFCU JOURNAL March–April 2021 the purchase or renewal agreement and all attachments.” The rule requires that this designation rotate through the board, by prohibiting a board member from being the signatory on consecutive purchase or renewal agreements for the same policy. The regulation also states that the signa- tory cannot be an employee of the FICU. As for the FICU’s management, their level of involvement may vary from one FICU to another but generally includes being responsible for the day-to-day management of the policy. For example, at some FICUs, the management is heavily involved in reviewing the cover- age available and the FICU’s needs, and then making suggestions to the board of directors. In addition to the requirements in the FCU Act and NCUA regulations, the fidelity bond provider may have its own requirements that an FICU must satisfy to obtain coverage. Some providers require the FICU to have policies and procedures in place to prevent fraud as a condition for coverage. Bond issuers may also require the FICU to provide periodic training to the FICU’s directors. FICUs may want to check the agreement with their existing or prospective bond issuers to determine what additional requirements may apply. Finally, state-chartered FICUs may also want to check the laws and regulations in their state to determine if state law imposes any additional requirements for bond coverage. Nick St. John is compliance counsel for NAFCU.