According to the Agent Reporting Agreement, what is the minimum financial instrument amount a new ARC accredited agency must provide to ARC?

According to the Agent Reporting Agreement, what is the minimum financial instrument amount a new ARC accredited agency must provide to ARC?

• A. $5,000
• B. $50,000
• C. $20,000
• D. $100,000

Answer: (C)

In the Agent Reporting Agreement, a newly accredited ARC agency must post a financial instrument to guarantee its settlement obligations with ARC and the airlines. This security provides ARC with a cushion against potential uncollected or unreconciled funds as the new agency ramps up. The minimum amount set for this instrument is twenty thousand dollars, which strikes a balance between offering meaningful protection and not imposing an excessive hurdle for smaller, new agencies. The instrument can take acceptable forms such as a letter of credit, a bond, or another ARC-approved security. This requirement remains in place to protect all parties while the agency maintains accreditation and complies with ARC rules.

In the Agent Reporting Agreement, a newly accredited ARC agency must post a financial instrument to guarantee its settlement obligations with ARC and the airlines. This security provides ARC with a cushion against potential uncollected or unreconciled funds as the new agency ramps up. The minimum amount set for this instrument is twenty thousand dollars, which strikes a balance between offering meaningful protection and not imposing an excessive hurdle for smaller, new agencies. The instrument can take acceptable forms such as a letter of credit, a bond, or another ARC-approved security. This requirement remains in place to protect all parties while the agency maintains accreditation and complies with ARC rules.