The Small Business Administration (SBA) is issuing this final rule to change the regulations for SBA's Surety Bond Guarantee Program in four areas. First, as a condition for participating in the Prior Approval and Preferred Surety Bond Programs, this rule clarifies that a Surety must directly employ underwriting and claims staffs sufficient to perform and manage these functions, and that final settlement authority for claims and recovery is vested only in salaried employees of the Surety. Second, this rule provides that all costs incurred by the Surety's salaried claims staff are ineligible for reimbursement by SBA, except the amounts actually paid for reasonable and necessary travel expenses. In addition, 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. Third, the rule modifies the criteria for determining when a Principal that caused a Loss to SBA is ineligible for a bond guaranteed by SBA. Fourth, the rule modifies the criteria for admitting Sureties to the Preferred Surety Bond Program by increasing the Surety's underwriting limitation, as certified by the U.S. Treasury Department on its list of acceptable sureties, from at least $2 million to at least $6.5 million.