ARC requires all ARC-listed travel agents to maintain a bond or irrevocable letter of credit (LOC) in favor of ARC. The ARC bond is a performance or financial guaranty type of bond. The LOC is a guarantee of payment issued by a federally insured lending institution. A bond or LOC serves as a financial screen, assuring ARC carriers of the financial credit worthiness of travel agents. ARC's bond/LOC requirement also protects ARC carriers from financial loss if a travel agency defaults.
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