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This rule proposes to change the regulations for SBA’s Surety Bond Guarantee Program in four areas. First, as a condition for participating in the Prior Approval Program, the proposal would clarify that a Surety must directly employ an underwriting staff sufficient to oversee this function. Second, the proposed rule would require all Sureties to directly employ sufficient staff to perform all claims functions, and to vest final settlement authority for claims and recovery only in salaried employees of the Surety. Third, the proposal would provide that all costs incurred by the Surety’s salaried claims staff are ineligible for reimbursement by SBA, but the Surety may seek reimbursement for amounts paid for specialized services that are provided by outside consultants in connection with the processing of a claim. Fourth, the rule proposes to modify the criteria for determining when a Principal that caused a Loss to SBA is ineligible for a bond guaranteed by SBA.