Delaware General Assembly

Lieu/Substituted 6/6/13

The General Assembly has ended, the current status is the final status.

HS 1 for HB 151

5/30/13

Keeley

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO BAIL BOND AGENTS.

Revisions to the bail bond statutes are necessary in order to curb abuses of the bail bond system, and better serve the citizens and courts of the State of Delaware. Under the statutes, the Insurance Department regulates a large contingent of bail bond agents. The statutes cover both surety bond bail agents, who post surety bonds issued by an insurance company, and property or cash bail agents, who post cash or property bails. Many agents operate both as surety bond bail agents and cash or property bail agents. This bill clarifies and expands the definition of property bail agent by including any person who charges a fee or a makes a business of furnishing property bail in court proceedings. This bill will allow the Department and the courts to monitor more closely bail agents by requiring them all to be residents of the State of Delaware. A number of states currently have similar provisions requiring bail agents to be residents of the licensing state. Delaware residency may be established under the bill by maintaining a principal place of business in the State. Nonresident bail agents who currently are licensed and who wish to renew their licenses will be required to establish residency and successfully pass the Delaware bail agent examination when their non-resident licenses come up for renewal in 2013. This bill will restrict participation by unlicensed persons in the bail bond business by requiring disclosure to the Commissioner of the identity of each person having or seeking to acquire a ten percent or greater financial interest in a bail agent’s business or any bail bond, and by requiring any person who acquires a ten percent or greater financial interest in a bail agent’s business or a bail bond to be licensed as a bail agent. The bill also provides that any unlicensed person acting as a bail agent is guilty of a class F felony. This penalty is the same as the one imposed by 24 Del. C. § 5515(b) upon any unlicensed person acting as a bail enforcement agent. This bill will also more clearly authorize the Commissioner to impose the same sanctions upon bail agents that the Commissioner may impose on all insurance producers under Title 18, section 1712, in the event of agent misconduct. Going forward the State will require criminal background checks from both the FBI and SBI in connection with initial applications for licensure, and for each biennial renewal. The current statute requires only a background check from the SBI, and only upon the initial application. The bill also establishes tighter standards for solicitation, record retention, reporting requirements, and accounting for premiums that allow for stronger regulatory oversight by the Department. Uniform standards of record retention to ensure that the Department has access to tangible records when conducting market conduct examinations of bail agents is also required. These requirements will result in more transparency in the industry. Under current law, the premiums for surety bail bonds and the commissions and other charges for cash bails must be filed with, and approved by, the commissioner. However, unscrupulous bail agents engage in a practice of “undercutting:” where in order to get business, they obtain only a limited portion of the filed rate of commission, and do not enter into a written agreement, before posting the bond. This practice allows defendants to post bond and leave detention at potentially much lower rates than the courts would expect based on the rates, charges and commissions filed with the commissioner. Under the bill, bail agents are required to collect a minimum of 7% of a surety bond amount, or 20% of a cash bail, and to enter into a written agreement before posting a bond. Also, this bill will establish clearer standards for the return of collateral to persons pledging the collateral, prohibit any bail agent from using more than two trade names, and make minor corrections and changes to the current law.

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Takes effect upon being signed into law

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