NY State Senate Bill 2013-S6970

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 09, 2014	referred to insurance

2013-S6970 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd Ins L, generally

2013-S6970 (ACTIVE) - Summary

Relates to bail bonds; amends the definitions of such term; relates to revoked licensees; requires every holder of an agent license to notify the superintendent of a change of address or name change

2013-S6970 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6970

TITLE OF BILL:  An act to amend the insurance law, in relation to bail
bonds

Purpose:

This bill would amend the Insurance Law to enable the Department of
Financial Services ("DFS") to more effectively regulate licensed bail
agents.

Summary of Provisions:

Section 1 of the bill would amend Insurance Law § 6801(a) and (b) to
make technical changes and would amend § 6801(c) to define "insurer,"
"bail agent," "bail bond," "criminal proceeding," "principal,"
"collateral," and "indemnitor."

Section 2 would amend Insurance -Law § 6802(a) to provide that any
person, firm, corporation, or other entity, or any officer or employee
thereof, that does a bail business without a license will be subject
to a penalty not to exceed $1,000 for each transaction, and also would
make technical changes to subsections (d) and (e).

Section 2 would also amend Insurance Law § 6802(k) to provide that the
Superintendent of Financial Services ("Superintendent") may revoke or

suspend a bail license if the licensee or any sublicensee has: (1)
obtained or attempted to obtain a license through misrepresentation or
fraud; (2) improperly withheld, misappropriated, or converted any
monies or properties received in the course of business in New York
State or elsewhere; (3) had a bail agent license or its equivalent
revoked in any other state, province, district, or territory; (4)
forged another person's name to an application for a bail bond or any
other document related to bail transactions; (5) failed to comply with
an administrative or court order imposing a child support obligation;
(6) failed to pay state income tax or comply with any administrative
or court order directing the payment of state income tax; or (7)
failed to return collateral to an indemnitor in accordance with
Insurance Law § 6812.

Section 2 would also amend the title of Insurance Law § 6802 to remove
the term "professional bondsmen" and replace it with "bail agents" and
make other technical changes.

Section 3 would amend the title of Insurance Law § 6803 to remove the
word "bond."

Section 4 would amend Insurance Law § 6804(b) to state that a person
or corporation may not charge, collect, or receive any fee or
consideration from an indemnitor other than the premium based on rates
in current use, except provided in § 6804(c). Section 4 also would add
a new Insurance Law § 6804(c) to provide that a bail agent may charge
an indemnitor a maximum fee of $100 for the apprehension or surrender
of a principal in a criminal proceeding unless Insurance Law § 6812(c)
applies.


Section 5 would add new Insurance Law §§ 6806 through 6813. Section
6806 would add new provisions with respect to revoked licenses.
Section 6807 would require that each place of business, including any
headquarters location and any satellite office, established by the
holder of a bail agent license issued pursuant to Insurance Law
6802, be under the supervision of one or more persons licensed under
such section. Section 6808 would provide that a holder of a bail agent
license must inform the Superintendent by a means acceptable to the
Superintendent of a change of address within 30 days of the change.
Section 6809 would provide that every holder of a bail agent license
must notify the Superintendent upon changing his, her, or its legal
name. Except for an individual licensee's own legal name, a licensee
may not use any name in conducting a business regulated by Insurance
Law Article 68 that the Superintendent has not previously approved.

Section 6810 would provide that a holder of a bail agent license must
report to the Superintendent any administrative action taken against
the licensee in another jurisdiction or by another governmental agency
in New York State within 30 days of the final disposition of the
matter. The report must include a copy of the order, consent to the
order, or other relevant legal documents. In addition, the licensee
must report to the Superintendent any criminal prosecution of the
licensee taken in any jurisdiction within 30 days of the initial
pretrial hearing date. The report must include a copy of the initial
complaint filed, the order resulting from the hearing, and any other
relevant legal documents.

Section 6811 would provide that the terms "insurance. agent" and
"insurance producer" include a bail agent for the purposes of
Insurance Law § 6812.

Section 6812(a) would provide that every bail agent is responsible in
a fiduciary capacity for all funds, collateral, or anything else of
value received or collected as a bail agent. Collateral received by a
bail agent must be held in the insurer's name. Prior to any forfeiture
of bail within the meaning of Criminal Procedure Law § 540.10, a bail
agent may not mingle any such funds, collateral, or other things of
value with the bail agent's own funds or with funds held by the bail
agent in any other capacity.

Section 6812(b) would provide that a bail agent may not use collateral
for personal benefit or gain. All collateral received from an
indemnitor by a bail agent or an insurer must be returned to the
indemnitor in the same condition as received no later than 30 days
after receipt of notice of exoneration of bail, unless there is a
forfeiture of bail within the meaning of Criminal Procedure Law
540.10, or unless Insurance Law Article 68 or regulations promulgated
thereunder specifically authorize deductions from collateral. If a
bail agent fails to return collateral to an indemnitor, then the
insurer will be liable for such collateral.

Section 6812(c) would provide that where there has been a forfeiture
of the bail bond, a bail agent or insurer may charge an indemnitor the
actual and reasonable costs necessary to apprehend and surrender a
principal in a criminal proceeding.


Section 6812(d) would provide that an insurer must promptly refund the
entire premium charged for a bail bond when the insurer had no
liability under the bail bond because the principal in the criminal
proceeding does not come under the jurisdiction of the court to which
the defendant is returnable, the principal is not released from
custody, or the bail bond is not posted with the court.

Section 6813(a) would provide that upon issuance of a bail bond, the
bail agent shall provide to the principal and, if applicable, to the
indemnitor, an informational notice that must include: a statement
noting with particularity the restrictions, if any, placed on the
principal as a condition of the bond; a statement of the bail agent's
authority relating to the cancellation of the bond and recommitment of
the principal; the name, address, telephone number, and website
address of DFS for complaints or inquiries; and such other information
the Superintendent may require.

Section 6813(b) would provide that any bail agent that surrenders or
recommits a principal shall provide the principal with a statement of
surrender. The statement must be signed by the bail agent and state
the reason for the surrender. A copy of the statement must be provided
to the court at the time the principal is surrendered and a copy
maintained by the bail agent in the principal's file for at least six
years from the date of surrender.

Section 6 would state that the bill takes effect the first of January
next succeeding the date on which it shall become law and that
effective immediately, the Superintendent may promulgate any rules and
regulations necessary for the implementation of this bill on its
effective date.

Existing Law:

Insurance Law Article 68 provides the statutory requirements
applicable to the regulation of bail agents. Under current law, there
is neither a prohibition nor a restriction on a licensed bail agent
employing a person whose bail agent license has been revoked by the
Superintendent, and there is no prohibition on a person whose bail
agent license has been revoked from becoming a shareholder in a
corporation that is licensed as a bail agent. Consequently, bail
agents whose licenses have been revoked have remained in the bail
business.

There also is no statutory fiduciary responsibility imposed on
licensed bail agents with respect to collateral they hold or a
statutory prohibition on mingling collateral money with other funds.
The absence of such a responsibility imposed by statute is likely a
factor in the large number of complaints involving the misuse of
collateral money.

In addition, nothing requires that a place of business established by
the holder of a bail agent license be under the supervision of a
person licensed as a bail agent. This has led to licensed bail agents
having places of businesses that are under the supervision of
unqualified people. There also is nothing that requires a licensed
bail agent to timely report to the Superintendent administrative
actions taken against the bail agent by other governmental agencies,


or a criminal prosecution taken against the bail agent. This has led
to bail agents being subject to administrative actions by other New
York State agencies or by other states, or being prosecuted for
serious crimes, without the Superintendent being informed.

Article 68 does not prohibit a licensed bail agent from conducting
business in a name other than the agent's own legal name, and does not
require a bail agent to obtain the Superintendent's approval when
using any other name. This has led to licensed bail agents using
multiple names, making it difficult for consumers to complain to DFS
and for DFS to process the complaints.

Legislative History:

This bill is new.

Statement in Support:

Between 2005 and 2013, there has been a significant increase in the
number of complaints made to DFS against licensed bail agents,
including allegations of misuse of collateral money posted with bail
agents, the charging of improper fees, and fraud. Currently, the
Superintendent's ability to effectively regulate the bail industry and
to protect consumers has been hindered by certain deficiencies in
Insurance Law Article 68, which governs bail agents.

This bill would address the deficiencies in Insurance Law Article 68,
make it more analogous to Insurance Law Article 21, which governs
insurance producers, and enable the Superintendent to more effectively
regulate the bail industry and protect consumers.  Specifically, the
bill would clarify certain issues that Article 68 currently does not
address with specificity. Unscrupulous licensed bail agents have
exploited this lack of specificity, which has resulted in harm to
consumer. The lack of specificity has enabled bail agents to create
excuses for failing to return premium or collateral, or failing to
timely return collateral.

The issues that this bill would clarify include: whether fees may be
charged incidental to the posting of a bail bond in addition to the
premium; the permissible fees that a bail agent may charge for
returning a defendant to court custody when there has not been a
forfeiture of bail; whether any premium or other compensation may be
charged if a bail bond is posted but a defendant is not released from
court custody; whether a bail agent may charge any fees if a bail bond
is not posted; and whether there is a specified time period by which a
bail agent or insurer is required to return collateral after a
criminal case is completed.

This bill, together with subsequent regulations, would provide greater
protection to consumers and raise the standards of integrity in the
bail industry.

Budget Implications:

None.

Local impact:


None.

Effective Date:

This bill would take effect on the first of January next succeeding
the date on which it shall become law, and that effective immediately,
the Superintendent may promulgate any rules and regulations necessary
for the implementation of the bill on its effective date.

2013-S6970 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6970

                            I N  S E N A T E

                              April 9, 2014
                               ___________

Introduced  by Sen. SEWARD -- (at request of the Department of Financial
  Services) -- read twice and ordered printed, and when  printed  to  be
  committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to bail bonds

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 6801 of the insurance law, subsections (a) and  (b)
as  amended  by  chapter  181 of the laws of 2012, is amended to read as
follows:
  S 6801. Bail [bond] business; DEFINITIONS.
  (a) (1) Any person, firm [or], corporation  OR  OTHER  ENTITY  in  any
court having criminal jurisdiction or in any criminal action or proceed-
ing  who  shall for another deposit money or property as bail or execute
as surety any bail bond who within a period of one month  prior  thereto
shall have made such a deposit or given such bail in more than two cases
not  arising  out  of the same transaction shall be deemed to be doing a
bail business and doing an insurance  business  as  defined  in  article
eleven of this chapter.
  (2)  Except  for a corporation authorized to write fidelity and surety
insurance and to do a bail business pursuant to the provisions of  arti-
cle  eleven  of  this chapter and otherwise in compliance with all other
requirements of this chapter to do such business or  a  charitable  bail
organization holding a certificate issued by the superintendent pursuant
to section six thousand eight hundred five of this article and otherwise
in  compliance  with  all  other requirement of this chapter, no person,
firm [or], corporation, OR OTHER ENTITY shall engage in a bail  business
in this state.
  (b)  (1)  No  person,  firm [or], corporation OR OTHER ENTITY shall in
this state do an insurance business or a bail  business  as  defined  in
subsection (a) of this section unless authorized by a license issued and
in force as provided under article eleven of this chapter.
  (2)  The  superintendent  may  authorize a property/casualty insurance
company which is authorized to write fidelity and surety insurance to do
a bail business in accordance with the provisions of article  eleven  of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD14074-04-4

S. 6970                             2

this  chapter,  but no individual OR ENTITY shall be licensed to do such
business.
  (C) DEFINITIONS. IN THIS ARTICLE:
  (1)  "INSURER" MEANS ANY PERSON, FIRM, CORPORATION, OR OTHER ENTITY IN
ANY COURT HAVING CRIMINAL JURISDICTION OR  IN  ANY  CRIMINAL  ACTION  OR
PROCEEDING  WHO  SHALL  FOR ANOTHER DEPOSIT MONEY OR PROPERTY AS BAIL OR
EXECUTE AS SURETY ANY BAIL BOND WHO WITHIN A PERIOD OF ONE  MONTH  PRIOR
THERETO  SHALL  HAVE MADE SUCH A DEPOSIT OR GIVEN SUCH BAIL IN MORE THAN
TWO CASES NOT ARISING OUT OF THE SAME TRANSACTION, BUT SHALL NOT INCLUDE
A CHARITABLE BAIL ORGANIZATION  HOLDING  A  CERTIFICATE  ISSUED  BY  THE
SUPERINTENDENT  PURSUANT  TO  SECTION SIX THOUSAND EIGHT HUNDRED FIVE OF
THIS ARTICLE.
  (2) "BAIL AGENT" MEANS ANY PERSON, FIRM, CORPORATION OR OTHER  ENTITY,
OR  ANY OFFICER OR EMPLOYEE THEREOF, THAT ACTS IN THIS STATE AS AN AGENT
OR SOLICITOR OF AN INSURER OR CHARITABLE BAIL ORGANIZATION DOING A  BAIL
BUSINESS  IN SOLICITING, NEGOTIATING OR EFFECTUATING ANY SUCH DEPOSIT OR
BAIL BOND.
  (3) "BAIL BOND" SHALL HAVE THE MEANING SET FORTH IN SUBDIVISION  THIR-
TEEN OF SECTION 500.10 OF THE CRIMINAL PROCEDURE LAW.
  (4) "CRIMINAL PROCEEDING" SHALL HAVE THE MEANING SET FORTH IN SUBDIVI-
SION EIGHTEEN OF SECTION 1.20 OF THE CRIMINAL PROCEDURE LAW.
  (5) "PRINCIPAL" SHALL HAVE THE MEANING SET FORTH IN SUBDIVISION ONE OF
SECTION 500.10 OF THE CRIMINAL PROCEDURE LAW.
  (6)  "COLLATERAL"  MEANS  ANYTHING OF VALUE RECEIVED AS SECURITY BY AN
INSURER OR BY A BAIL AGENT IN CONNECTION WITH THE EXECUTION OF BAIL IN A
CRIMINAL PROCEEDING.
  (7) "INDEMNITOR" MEANS AN INDIVIDUAL OR ENTITY WHO  HAS  PAID  A  BAIL
BOND PREMIUM TO OR DEPOSITED COLLATERAL WITH, AN INSURER OR A BAIL AGENT
IN  CONNECTION WITH THE EXECUTION OF AN INSURANCE COMPANY BAIL BOND IN A
CRIMINAL PROCEEDING.
  S 2. The section heading and subsections (a),  (d),  (e)  and  (k)  of
section  6802 of the insurance law, subsection (a) as amended by chapter
181 of the laws of 2012, are amended to read as follows:
  [Professional bondsmen] BAIL AGENTS; licensing.  (a) No  person,  firm
[or],  corporation  OR OTHER ENTITY, or any officer or employee thereof,
shall act in this state as [an] A BAIL agent or solicitor of an  insurer
or  charitable  bail  organization  doing a bail business in soliciting,
negotiating or effectuating any such deposit or bail bond by such insur-
er or charitable bail organization unless licensed by the superintendent
as [an] A BAIL agent pursuant to the provisions of this  section.    Any
person,  firm or corporation so acting without being duly licensed shall
be guilty of a misdemeanor AND SHALL BE SUBJECT  TO  A  PENALTY  NOT  TO
EXCEED ONE THOUSAND DOLLARS FOR EACH TRANSACTION.
  (d) Any such license issued to a firm [or corporation] shall authorize
only  the members named in such license as sublicensees, to act individ-
ually as agents thereunder. Any [sublicense] LICENSE issued to a  corpo-
ration  shall  authorize  only  the officers and directors named in such
license as sublicensees,  to  act  individually  as  agents  thereunder.
Every  sublicensee,  acting  as  [insurance]  BAIL  agent  pursuant to a
license issued to a firm or corporation, shall be authorized to act only
in the name of such firm or corporation.
  (e) Before the issuance of a license every applicant shall satisfy the
superintendent as to his  OR  HER  trustworthiness  and  competence  and
otherwise  comply  with  the  conditions  set forth in this section. The
superintendent may refuse to issue any such  license  if  in  [his]  THE

S. 6970                             3

SUPERINTENDENT'S  judgment  such refusal will best promote the interests
of the people of this state.
  (k) The superintendent may, upon notice and after a hearing, revoke or
suspend,  for  such period as [he] THE SUPERINTENDENT may determine, any
such license or sublicense issued pursuant to  the  provisions  of  this
section  if, after notice and hearing as specified in this chapter, [he]
THE SUPERINTENDENT determines that the licensee or  any  sublicensee  or
any member of a firm or corporation [which] THAT is so licensed has:
  (1)  violated  any  provision  of,  or any obligation imposed by, [the
insurance law] THIS CHAPTER, or has violated any other law of the state;
  (2) has made a material  misstatement  in  the  application  for  such
license;
  (3)  has been guilty of any fraudulent or dishonest practices or other
misconduct or malfeasance;
  (4) has charged or received, as premium or compensation for the making
of any deposit or bail bond, any [sum in excess of that] FEE OR  CONSID-
ERATION EXCEPT AS permitted by law;
  (5)  has required, as a condition of [his] executing a bail bond, that
the principal agree to engage the services of a specified attorney; [or]
  (6) has demonstrated [his] incompetency or untrustworthiness to act as
a licensee;
  (7) OBTAINED OR ATTEMPTED TO OBTAIN  A  LICENSE  THROUGH  MISREPRESEN-
TATION OR FRAUD;
  (8)  IMPROPERLY  WITHHELD,  MISAPPROPRIATED OR CONVERTED ANY MONIES OR
PROPERTIES RECEIVED IN THE COURSE OF BUSINESS IN  THIS  STATE  OR  ELSE-
WHERE;
  (9)  HAD  A  BAIL AGENT LICENSE OR ITS EQUIVALENT REVOKED IN ANY OTHER
STATE, PROVINCE, DISTRICT, OR TERRITORY;
  (10) FORGED ANOTHER PERSON'S NAME TO AN APPLICATION FOR  BAIL  OR  ANY
OTHER DOCUMENT RELATED TO BAIL TRANSACTIONS;
  (11) FAILED TO COMPLY WITH AN ADMINISTRATIVE OR COURT ORDER IMPOSING A
CHILD SUPPORT OBLIGATION;
  (12)  FAILED TO PAY STATE INCOME TAX OR COMPLY WITH ANY ADMINISTRATIVE
OR COURT ORDER DIRECTING THE PAYMENT OF STATE INCOME TAX; OR
  (13) FAILED TO RETURN COLLATERAL TO AN INDEMNITOR IN  ACCORDANCE  WITH
THE  REQUIREMENTS  OF  SECTION SIX THOUSAND EIGHT HUNDRED TWELVE OF THIS
ARTICLE.
  S 3. The section heading of section 6803  of  the  insurance  law,  as
amended  by  chapter  181  of  the  laws  of 2012, is amended to read as
follows:
  Bail [bond] business; cities in excess  of  one  hundred  seventy-five
thousand.
  S  4.  Section 6804 of the insurance law, subsection (a) as amended by
chapter 400 of the laws of 1997, is amended to read as follows:
  S 6804. Premium or compensation.  (a) The premium or compensation  for
giving  bail  bond  or  depositing  money  or property as bail shall not
exceed ten per centum of the amount of such bond  or  deposit  in  cases
where  such  bonds  or  deposits do not exceed the sum of three thousand
dollars. Where such bonds or deposits exceed the sum of  three  thousand
dollars,  the premium shall not exceed ten per centum of the first three
thousand dollars and eight per centum of the excess  amount  over  three
thousand  dollars  up  to ten thousand dollars and six per centum of the
excess amount over ten thousand dollars. In cases where  the  amount  of
the  bond  or deposit is less than two hundred dollars a minimum premium
of ten dollars may be charged.
  (b) (1) No person or corporation shall:

S. 6970                             4

  [(1)] (A) charge, COLLECT, or receive,  directly  or  indirectly,  any
[greater  compensation  for making a deposit for bail or giving bail, or
act in such business as aforesaid without obtaining a license,]  FEE  OR
CONSIDERATION  FROM  AN INDEMNITOR OTHER THAN THE PREMIUM BASED ON RATES
IN CURRENT USE, EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION; or
  [(2)]  (B)  accept  any fee or compensation for obtaining a license or
for obtaining a bondsman or bail bond.
  (2) Such person or corporation shall be guilty of a misdemeanor and in
addition shall in any action brought to recover any such  overcharge  be
liable for treble damages.
  (c) A BAIL AGENT MAY CHARGE AN INDEMNITOR A MAXIMUM FEE OF ONE HUNDRED
DOLLARS  FOR  THE APPREHENSION OR SURRENDER OF A PRINCIPAL IN A CRIMINAL
PROCEEDING UNLESS SUBSECTION (C) OF SECTION SIX THOUSAND  EIGHT  HUNDRED
TWELVE OF THIS ARTICLE APPLIES.
  (D) Any member of the bar having any financial interest by which he OR
SHE  is to profit from the giving of bail shall be guilty of a misdemea-
nor.
  S 5. The insurance law is amended by adding eight new  sections  6806,
6807, 6808, 6809, 6810, 6811, 6812 and 6813 to read as follows:
  S 6806. REVOKED LICENSES. (A) (1) NO INDIVIDUAL, CORPORATION, PARTNER-
SHIP,  ASSOCIATION,  FIRM,  OR OTHER ENTITY SUBJECT TO THE PROVISIONS OF
THIS CHAPTER WHOSE LICENSE UNDER THIS ARTICLE HAS BEEN REVOKED, OR WHOSE
LICENSE TO ENGAGE IN BAIL BUSINESS IN ANY CAPACITY HAS BEEN  REVOKED  BY
ANY OTHER STATE OR TERRITORY OF THE UNITED STATES, SHALL BECOME EMPLOYED
FOR  SERVICES OR SHALL BE APPOINTED AS AN OFFICER, DIRECTOR, MANAGER, OR
CONTROLLING PERSON BY ANY INDIVIDUAL, CORPORATION, PARTNERSHIP,  ASSOCI-
ATION, FIRM, OR ENTITY SUBJECT TO THE PROVISIONS OF THIS CHAPTER WITHOUT
THE PRIOR WRITTEN APPROVAL OF THE SUPERINTENDENT.
  (2)    NO  INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, FIRM, OR
OTHER ENTITY SUBJECT TO THE PROVISIONS OF THIS CHAPTER  SHALL  KNOWINGLY
APPOINT ANY PERSON OR ENTITY WHOSE LICENSE ISSUED UNDER THIS ARTICLE HAS
BEEN REVOKED OR WHOSE LICENSE TO ENGAGE IN BAIL BUSINESS IN ANY CAPACITY
HAS BEEN REVOKED BY ANY OTHER STATE OR TERRITORY OF THE UNITED STATES AS
AN OFFICER, DIRECTOR, MANAGER, OR CONTROLLING PERSON WITHOUT THE WRITTEN
APPROVAL OF THE SUPERINTENDENT.
  (3)    NO  INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, FIRM, OR
OTHER ENTITY SUBJECT TO THE PROVISIONS OF THIS CHAPTER  SHALL  KNOWINGLY
EMPLOY  FOR SERVICES ANY PERSON OR ENTITY WHOSE LICENSE UNDER THIS ARTI-
CLE HAS BEEN REVOKED OR WHOSE LICENSE TO ENGAGE IN BAIL BUSINESS IN  ANY
CAPACITY  HAS BEEN REVOKED BY ANY OTHER STATE OR TERRITORY OF THE UNITED
STATES WITHOUT THE PRIOR WRITTEN APPROVAL OF THE SUPERINTENDENT.
  (4) NO CORPORATION OR PARTNERSHIP SUBJECT TO THE  PROVISIONS  OF  THIS
CHAPTER  SHALL  KNOWINGLY  PERMIT  ANY PERSON WHOSE LICENSE ISSUED UNDER
THIS ARTICLE HAS BEEN REVOKED TO BE A SHAREHOLDER OR HAVE AN INTEREST IN
SUCH CORPORATION OR PARTNERSHIP, NOR SHALL  ANY  SUCH  PERSON  BECOME  A
SHAREHOLDER  OR  PARTNER IN SUCH CORPORATION OR PARTNERSHIP, WITHOUT THE
PRIOR WRITTEN APPROVAL OF THE SUPERINTENDENT.
  (5) FOR THE PURPOSE OF THIS SECTION, A "CONTROLLING PERSON" MEANS  ANY
PERSON  WHO  OR  THAT  DIRECTLY OR INDIRECTLY HAS THE POWER TO DIRECT OR
CAUSE TO BE DIRECTED THE  MANAGEMENT,  CONTROL,  OR  ACTIVITIES  OF  THE
LICENSEE.
  (B)  THE  SUPERINTENDENT  MAY  APPROVE THE EMPLOYMENT, APPOINTMENT, OR
PARTICIPATION OF ANY SUCH PERSON WHOSE LICENSE HAS BEEN REVOKED:
  (1) IF THE SUPERINTENDENT DETERMINES THAT THE DUTIES AND  RESPONSIBIL-
ITIES  OF  SUCH  PERSON  ARE SUBJECT TO APPROPRIATE SUPERVISION AND THAT
SUCH DUTIES AND RESPONSIBILITIES SHALL NOT HAVE AN ADVERSE  EFFECT  UPON

S. 6970                             5

THE  PUBLIC, OTHER LICENSEES, OR THE LICENSEE PROPOSING THE EMPLOYING OR
APPOINTMENT OF SUCH PERSON; OR
  (2)  IF  SUCH PERSON HAS FILED AN APPLICATION FOR RELICENSING PURSUANT
TO THIS ARTICLE  AND  THE  APPLICATION  FOR  RELICENSING  HAS  NOT  BEEN
APPROVED  OR  DENIED  WITHIN  ONE HUNDRED TWENTY DAYS FOLLOWING THEREOF,
UNLESS THE SUPERINTENDENT DETERMINES  WITHIN  THE  SAID  TIME  THAT  THE
EMPLOYMENT OR APPOINTMENT OF SUCH PERSON BY A LICENSEE IN THE CONDUCT OF
AN INSURANCE BUSINESS WOULD NOT BE IN THE PUBLIC INTEREST.
  (C) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO THE OWNERSHIP OF
SHARES  OF  ANY  CORPORATION  LICENSED  PURSUANT  TO THIS ARTICLE IF THE
SHARES  OF  SUCH  CORPORATION  ARE  PUBLICLY  HELD  AND  TRADED  IN  THE
OVER-THE-COUNTER  MARKET  OR  UPON  ANY  NATIONAL OR REGIONAL SECURITIES
EXCHANGE.
  (D) THE PROVISIONS  OF  THIS  SECTION  SHALL  APPLY  TO  RELATIONSHIPS
CREATED  OR PROPOSED ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, AS
WELL AS TO ANY PERSON WHOSE LICENSE IS REVOKED ON OR AFTER SUCH DATE.
  S 6807. DUTY TO HAVE AN AGENT AT EACH PLACE OF BUSINESS. EACH PLACE OF
BUSINESS, INCLUDING ANY HEADQUARTERS LOCATION AND ANY SATELLITE  OFFICE,
ESTABLISHED  BY  THE  HOLDER  OF A BAIL AGENT LICENSE ISSUED PURSUANT TO
SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THIS ARTICLE, SHALL  BE  UNDER
THE  SUPERVISION  OF  ONE  OR  MORE PERSONS LICENSED UNDER SUCH SECTION.
WRITTEN NOTICE SHALL BE  GIVEN  TO  THE  SUPERINTENDENT  CONTAINING  THE
LOCATION  OF  A SATELLITE OFFICE WITHIN TEN DAYS OF THE ESTABLISHMENT OF
ANY SUCH OFFICE, AND SUCH NOTICE SHALL CONTAIN THE NAME OF THE  LICENSED
PERSON OR PERSONS SUPERVISING SUCH OFFICE.
  S  6808.  CHANGE  OF  ADDRESS. A HOLDER OF A BAIL AGENT LICENSE ISSUED
PURSUANT TO SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THIS ARTICLE SHALL
INFORM THE SUPERINTENDENT BY A MEANS ACCEPTABLE TO THE SUPERINTENDENT OF
A CHANGE OF ADDRESS WITHIN THIRTY DAYS OF THE CHANGE.
  S 6809. USE OF NAMES. EVERY HOLDER OF  A  BAIL  AGENT  LICENSE  ISSUED
PURSUANT TO SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THIS ARTICLE SHALL
NOTIFY  THE  SUPERINTENDENT  UPON  CHANGING HIS, HER, OR ITS LEGAL NAME.
EXCEPT FOR AN INDIVIDUAL LICENSEE'S OWN LEGAL NAME,  NO  LICENSEE  SHALL
USE ANY NAME IN CONDUCTING A BUSINESS REGULATED BY THIS ARTICLE THAT HAS
NOT BEEN PREVIOUSLY APPROVED BY THE SUPERINTENDENT.
  S  6810.  REPORTS OF ADMINISTRATIVE ACTIONS AND CRIMINAL PROSECUTIONS.
(A) A HOLDER OF A BAIL AGENT LICENSE  ISSUED  PURSUANT  TO  SECTION  SIX
THOUSAND  EIGHT  HUNDRED  TWO OF THIS ARTICLE SHALL REPORT TO THE SUPER-
INTENDENT ANY ADMINISTRATIVE ACTION TAKEN AGAINST THE LICENSEE IN ANOTH-
ER JURISDICTION OR BY ANOTHER GOVERNMENTAL AGENCY IN THIS  STATE  WITHIN
THIRTY  DAYS  OF  THE FINAL DISPOSITION OF THE MATTER. THIS REPORT SHALL
INCLUDE A COPY OF THE ORDER, CONSENT TO THE  ORDER,  OR  OTHER  RELEVANT
LEGAL DOCUMENTS.
  (B) WITHIN THIRTY DAYS OF THE INITIAL PRETRIAL HEARING DATE, THE HOLD-
ER OF A BAIL AGENT LICENSE ISSUED PURSUANT TO SECTION SIX THOUSAND EIGHT
HUNDRED TWO OF THIS ARTICLE SHALL REPORT TO THE SUPERINTENDENT ANY CRIM-
INAL  PROSECUTION OF THE LICENSEE TAKEN IN ANY JURISDICTION. THIS REPORT
SHALL INCLUDE A COPY OF THE INITIAL COMPLAINT FILED, THE ORDER RESULTING
FROM THE HEARING, AND ANY OTHER RELEVANT LEGAL DOCUMENTS.
  S 6811. CERTIFICATES OF APPOINTMENT TO ACT  AS  AGENT  AND  NOTICE  OF
TERMINATION. FOR THE PURPOSES OF SECTION TWO THOUSAND ONE HUNDRED TWELVE
OF  THIS  CHAPTER,  "INSURANCE  AGENT"  AND  "INSURANCE  PRODUCER" SHALL
INCLUDE A BAIL AGENT.
  S 6812. COLLATERAL. (A) EVERY BAIL AGENT ACTING AS SUCH IN THIS  STATE
SHALL  BE RESPONSIBLE IN A FIDUCIARY CAPACITY FOR ALL FUNDS, COLLATERAL,
OR ANYTHING ELSE OF VALUE RECEIVED OR COLLECTED AS A BAIL AGENT. COLLAT-

S. 6970                             6

ERAL RECEIVED BY A BAIL AGENT SHALL BE HELD IN THE INSURER'S NAME. PRIOR
TO ANY FORFEITURE OF BAIL WITHIN THE MEANING OF SECTION  540.10  OF  THE
CRIMINAL  PROCEDURE  LAW,  A BAIL AGENT SHALL NOT MINGLE ANY SUCH FUNDS,
COLLATERAL  OR  OTHER THING OF VALUE, WITH THE BAIL AGENT'S OWN FUNDS OR
WITH FUNDS HELD BY THE BAIL AGENT IN ANY OTHER CAPACITY.
  (B) A BAIL AGENT SHALL NOT USE  COLLATERAL  FOR  PERSONAL  BENEFIT  OR
GAIN.  ALL  COLLATERAL RECEIVED FROM AN INDEMNITOR BY A BAIL AGENT OR AN
INSURER SHALL BE RETURNED TO THE INDEMNITOR IN  THE  SAME  CONDITION  AS
RECEIVED  NO  LATER THAN THIRTY DAYS AFTER RECEIPT OF NOTICE OF EXONERA-
TION OF BAIL, UNLESS THERE IS A FORFEITURE OF BAIL WITHIN THE MEANING OF
SECTION 540.10 OF THE CRIMINAL PROCEDURE LAW, OR UNLESS DEDUCTIONS  FROM
COLLATERAL  ARE  SPECIFICALLY  AUTHORIZED BY THIS ARTICLE OR REGULATIONS
PROMULGATED THEREUNDER. IF A BAIL AGENT FAILS TO RETURN COLLATERAL TO AN
INDEMNITOR IN ACCORDANCE WITH THIS SECTION, THEN THE  INSURER  SHALL  BE
LIABLE  FOR THE COLLATERAL AND SHALL RETURN THE COLLATERAL TO THE INDEM-
NITOR OR, IN THE EVENT THAT THE INSURER CANNOT  LOCATE  THE  COLLATERAL,
THE  INSURER  SHALL  PAY  THE  INDEMNITOR IN ACCORDANCE WITH REGULATIONS
PROMULGATED BY THE SUPERINTENDENT.
  (C) WHERE THERE HAS BEEN A FORFEITURE OF THE BAIL WITHIN  THE  MEANING
OF SECTION 540.10 OF THE CRIMINAL PROCEDURE LAW, A BAIL AGENT OR INSURER
MAY  CHARGE  AN  INDEMNITOR THE ACTUAL AND REASONABLE COSTS NECESSARY TO
APPREHEND AND SURRENDER A PRINCIPAL IN A CRIMINAL PROCEEDING    PROVIDED
SUCH COSTS ARE DOCUMENTED BY CHECK OR RECEIPT.
  (D)  AN  INSURER  SHALL PROMPTLY REFUND THE ENTIRE PREMIUM CHARGED FOR
BAIL WHEN:
  (1) THE INSURER HAD NO LIABILITY UNDER THE BAIL BOND BECAUSE THE PRIN-
CIPAL IN THE CRIMINAL PROCEEDING DOES NOT COME UNDER THE JURISDICTION OF
THE COURT TO WHICH THE DEFENDANT IS RETURNABLE;
  (2) THE PRINCIPAL IS NOT RELEASED FROM CUSTODY; OR
  (3) THE BAIL BOND IS NOT POSTED WITH THE COURT.
  S 6813. NOTICE. (A) UPON ISSUANCE OF A BAIL BOND, THE BAIL AGENT SHALL
PROVIDE TO THE PRINCIPAL AND,  IF  APPLICABLE,  TO  THE  INDEMNITOR,  AN
INFORMATIONAL NOTICE THAT SHALL INCLUDE:
  (1)  A  STATEMENT  NOTING WITH PARTICULARITY THE RESTRICTIONS, IF ANY,
PLACED ON THE PRINCIPAL AS A CONDITION OF THE BOND;
  (2) A STATEMENT OF THE BAIL AGENT'S AUTHORITY RELATING TO THE  CANCEL-
LATION OF THE BOND AND RECOMMITMENT OF THE PRINCIPAL;
  (3)  THE  NAME,  ADDRESS, TELEPHONE NUMBER, AND WEBSITE ADDRESS OF THE
DEPARTMENT FOR COMPLAINTS OR INQUIRIES; AND
  (4) SUCH OTHER INFORMATION THE SUPERINTENDENT MAY REQUIRE.
  (B) A BAIL AGENT  THAT  SURRENDERS  OR  RECOMMITS  A  PRINCIPAL  SHALL
PROVIDE THE PRINCIPAL WITH A STATEMENT OF SURRENDER. THE STATEMENT SHALL
BE  SIGNED  BY THE BAIL AGENT AND SHALL STATE THE REASON FOR THE SURREN-
DER. A COPY OF THE STATEMENT SHALL BE PROVIDED TO THE COURT AT THE  TIME
THE  PRINCIPAL IS SURRENDERED AND A COPY MAINTAINED BY THE BAIL AGENT IN
THE PRINCIPAL'S FILE FOR AT LEAST SIX YEARS FROM THE DATE OF SURRENDER.
  (C) THE SUPERINTENDENT MAY PRESCRIBE FORMS TO EFFECTUATE THIS SECTION.
  S 6. This act shall take effect on the first of January next  succeed-
ing  the  date on which it shall have become a law, provided that effec-
tive immediately, the superintendent of financial services  may  promul-
gate  any  rules and regulations necessary for the implementation of the
provisions of this act on its effective date.

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Senate Bill S6970

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2013-S6970 (ACTIVE) - Details

2013-S6970 (ACTIVE) - Summary

2013-S6970 (ACTIVE) - Sponsor Memo

2013-S6970 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S6970

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Sponsored By

James L. Seward

Archive: Last Bill Status - In Senate Committee Insurance Committee

2013-S6970 (ACTIVE) - Details

2013-S6970 (ACTIVE) - Summary

2013-S6970 (ACTIVE) - Sponsor Memo

2013-S6970 (ACTIVE) - Bill Text download pdf

Comments