(1) If a contractor is secured, the department shall release its interest in the security three years after the contractor's last license expired. The department shall not release its interest, however, if an unsatisfied judgment or claim is outstanding against the contractor.

(2) The department shall in any case release its interest in the security if the contractor provides a surety bond in the same amount that covers all of the periods in which the contractor was licensed for the previous three years, plus for the contractor's current license period if applicable.