Non-Participating Manufacturer Surety Bonds are required for producers of tobacco and tobacco-related products that do not comply with the 1998 Tobacco Master Settlement Agreement (MSA).
The MSA is legislation intended to facilitate the settlement of extensive healthcare costs and damages resulting from cigarette smoking, as well as reduce overall tobacco use in the United States through various prohibitions on manufacturers. These surety bonds are designed to compensate for the mandatory funding which the MSA requires states to contribute to healthcare costs directly influenced by tobacco use, through required quarterly payments. These funds may also be used to cover court actions or settlements brought against the manufacturer. Non-Participating Manufacturer Surety Bonds ensure tobacco producers compliance with all applicable laws and regulations.