Bill Text: DE HB203 | 2015-2016 | 148th General Assembly | Draft
Bill Title: An Act To Amend Title 18 Of The Delaware Code Relating To Bail Bond Agents.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2015-06-18 - Introduced and Assigned to Judiciary Committee in House [HB203 Detail]
Download: Delaware-2015-HB203-Draft.html
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SPONSOR: |
Rep. Keeley & Sen. Henry |
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Reps. Kowalko, Viola |
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HOUSE OF REPRESENTATIVES 148th GENERAL ASSEMBLY |
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HOUSE BILL NO. 203 |
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AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO BAIL BOND AGENTS. |
Section 1.Amend Section 4332, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4332.Definitions.
(2) "Bail
agent business Business entity" shall mean a corporation,
association, partnership, limited liability company, limited liability
partnership, or other legal entity that advertises and acts as a bail
agent.
(13) "Property bail agent" means any person who pledges property bail as security or surety for a bail bond in connection with a judicial proceeding and receives or is promised therefor money or other things of value.All of the following are deemed property bail agents and are subject to the provisions of this subchapter:
a. Any person who charges a fee for or makes a
business of furnishing property bail in any court proceeding,.
b. Any person or who furnishes property bail in
4 or more court cases in any 1 year whether for compensation or otherwise.
c. Unless expressly exempted pursuant to this subchapter, any person who provides or loans the funds to property bail agents or bail agent business entities for purposes of furnishing property bail in court proceedings, regardless of whether the provision of funds is classified as a personal or business loan.
, shall be deemed a property bail agent and shall be
subject to the provisions of this subchapter.
Section 2.Amend Section 4333, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4333. Application for license as a bail agent and licensure.
(c) Before approving the application, the Commissioner shall find that the individual:
(3) Has not committed any of the following acts:
(l)Knowingly accepted surety bond
business from an individual who is not licensed, whose license has been
suspended or revoked, or who has been barred from acting as a bail agent by any
court;
(d)(1)A person applying for, or having been granted, a bail agent license, shall disclose to the Commissioner the identity of each person that provides or will provide funds or loans or will loan funds to such applicant or licensee for bail bonds pledged by or on behalf of the applicant or licensee and each person having or seeking to acquire a 10% or greater financial interest in:
a. The bail agent's business; or
b. Any 1 or more bail bonds pledged by or on behalf of the applicant or licensee.
(2)Before any person may provide or loan funds to property bail agents or bail agent business entities for purposes of furnishing property bail in court proceedings, whether such provision of funds or loan is classified as a personal or business loan, and before any person may acquire or maintain a 10% or greater financial interest in:
a.A bail agent's business; or
b. any 1 or more bail bonds;
such person must be licensed as a bail agent under this section.
(3)No applicant for a license or licensee shall accept funds from any person for purposes of furnishing property bail in court proceedings, whether such provision of funds or loan is classified as a personal or business loan, unless the person providing or loaning such funds is licensed as a bail agent under this subchapter.
(3)
(4) No applicant for a license or licensee shall allow a person to
acquire or maintain a 10% or greater financial interest in:
a.A bail agent's business; or
b. Any 1 or more bail bonds;
unless the person seeking to acquire such interest is licensed as a bail agent under this subchapter.
(5)The provisions in this subchapter requiring the licensure of any person providing or loaning funds to any applicant or licensee shall not apply to banks and financial institutions supervised and regulated under Title 5 of the Delaware Code.
(g) All collateral, premiums, return premiums or other funds received in any manner by a bail agent or bail agent business entity shall be held in a fiduciary capacity and shall be accounted for by such bail agent or bail agent business entity.
Section 3.Amend Section 4333B, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4333B. Additional application requirements for property bail agents.
(b)A property bail agent and bail agent business entity shall have a continuing duty:
(1) To advise the Commissioner in writing under oath of any material change in such property bail agent's or bail agent business entity's assets or liabilities affecting such property bail agent's or bail agent business entity's responsibility as a property bail agent or bail agent business entity; and
(2)At any time, upon request of the Commissioner, furnish the Commissioner with a statement under oath of such property bail agent's or bail agent business entity's assets and liabilities, including all bail bonds on which such property bail agent or bail agent business entity is obligated.The Commissioner may request, and the property bail agent or bail agent or business entity shall provide, financial statements and balance sheets, in the form requested by the Commissioner, bank statements and any other information requested by the Commissionerto allow the Commissioner to review the business operations of the bail agent or bail agent business entity.
Section 4.Amend Section 4334, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and redesignating accordingly:
§ 4334.Application for license as a bail agent business entity.
(a) A
business entity advertising and acting as a bail agent bail agent
business entity is required to obtain a bail producer agent business
entity insurance license. All surety bail bond contract transactions under the
bail agent business entity license must be completed by a licensed bail
agent of this State. Nonlicensed individuals may perform tasks that are
strictly clerical in nature such as assisting customers to complete
applications and taking payments and providing receipts or other documentation
to principal, indemnitors, customers or other persons, but only under the
supervision of a licensed agent who shall be responsible for any noncompliance
with this subchapter by the nonlicensed individual.
(b) Application for a bail agent business entity license shall be made using the Uniform Business Entity Application or on forms prescribed by the Commissioner for license types and lines of authority not available on the Uniform Business Entity Application.
(c)Before approving the application, the Commissioner shall find that:
(1) The bail agent business entity has paid the fees set forth in Chapter 7 of this title; and
(2) The bail agent business entity has designated a licensed bail agent or producer licensed under this chapter responsible for the bail agent business entity's compliance with the insurance laws, rules and regulations of this State.
(d) If the license of a bail agent business entity's designated bail agent is no longer active, whether due to expiration, suspension, revocation or otherwise, the license of such bail agent business entity shall be immediately suspended until such time as a licensed bail agent in good standing is designated as such bail agent business entity's responsible agent.In addition, a bail agent business entity's designated bail agent shall be subject to the same penalties as the bail agent business entity for the bail agent business entity's failure to comply with the insurance laws, rules and regulations of this State.
Section 5.Amend Section 4335, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4335. License renewal.
(b)In addition, such person shall be required to
show that since the last renewal or initial application in this State, neither
the person nor any business in which the person is or was an owner, partner,
officer or director, or member or manager of a limited liability
company, has not been suspended or prohibited in this State or any other
jurisdiction from acting as a bail agent by any court, or otherwise been
involved in an administrative proceeding regarding any professional or
occupational license, or registration at the time of renewal.
Section 6.Amend Section 4338, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4338.Issuance of license; notice of refusal to issue license; fees not refundable.
(d)If the applicant for a bail agent license
fails to meet the requirements of this subchapter or any applicable regulation,
the Department shall refuse to issue the license and shall notify the applicant
of such refusal stating the grounds for the refusal.The notice of refusal shall constitute an
order of the Commissioner as provided in §323 of this title.The applicant may make written demand
upon the Commissioner within 10 days for a hearing before the Commissioner to
determine the reasonableness of the Commissioner's action.The hearing shall be held pursuant to the
Administrative Procedures Act, Chapter 101 of Title 29, and such additional
implemented regulations as may be published by the Commissioner.
(g)Licensees shall inform the Department by any
means approved by the Department of a change of address within 30 days of the
change.Failure to timely inform the Department
of a change in legal name or address shall result in a penalty pursuant to §
1712(d) of this title.
Section 7.Amend Section 4341, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4341.Records.
(b)Each licensee, as a minimum requirement for office records shall maintain:
(1)A daily bond register which shall be the original and permanent record
of all bonds or undertakings executed by the licensee, which shall state the
number of the power of attorney form, date bond was executed, the state, county
and court in which the bond was executed, the case docket number ifassigned, name of principal, amount of bond,
premium charged, premium reported to surety company, security or collateral
received, indemnity agreements, a copy of the court receipt for the property
bail, the name of the lender or provider of funds for the bail if
applicable, the bank account information from which the funds were received or
a notation that the funds were provided in cash, disposition of bond, and
date of disposition, and date that funds were repaid to the lender or
provider of such funds and the method of repayment of those funds including
relevant bank account information.
(2) An individual file for each principal for whom bond is made which shall contain the original application for bail bond or undertaking, copy of premium receipt, copy of collateral receipt, copy of a bond discharge if issued, security or collateral affidavit, where security or collateral is located, information as to any security or consideration received by the agency or licensee in connection with each particular bail bond or undertaking and purpose for which it was received, receipt or release executed by the person or persons posting security or collateral evidencing the return of such security or collateral and indemnity agreement as executed by any co-indemnitors.
(3) For each bail bond, policy or contract placed or countersigned by or through the licensee, names of the insurers, principals, insureds, bond or policy number, expiration date thereof, premium payable under the terms of the bond, policy or contract.
(4) With respect to those licensees who are providing loans or funds to other bail agents or bail agent business entities, a daily register which shall include:
a. Information relating to each bond for which funds were provided and the date the funds were provided to the bail agent or business entity;
b. The bail agent or business entity to whom the funds were provided;
c. The case docket number for the bond;
d. The amount of funds provided and the method by which they were provided;
e. The charge applied to such loan; and
f. The date the loan or funds were repaid and the method of repayment of those funds including relevant bank account information.
Section 8. Amend Section 4344, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§
4344 Bail agents and designated responsible bail agents: special
requirements.
(a) A
bail bond agent may be concurrently employed or licensed by a surety bail bond
agent, and property bail agent or bail bond agent business entities. A
bail bond agent shall not concurrently be employed or licensed by 2 surety bail
bond agents, or 2 property bail bond agents or bail bond agent business
entities.
Section 9. Amend Section 4350, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 4350.Prohibited acts; persons who may not be bail agents.
(e) No
bail agent, bail bond agent business entity or bail bond
property entity shall conduct any business or advertise in this State under
any firm or trade name that:
(1) Is false, misleading or deceptive;
(2) Implies any connection with any government agency; or
(3) Is not registered, licensed, and approved by the Department.
Any
advertisement shall prominently display the registered name and license number
of the bail agent, bail bond agent business entity or bail
bond property entity. No advertisement may use terms such as
"discounted" rates. No bail agent may use more than 2 trade names.
Section 10. Amend Section 4352, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
(a) A bail agent, and the bail agent's managing general agent or surety insurer, shall report to the Department in writing:
(1) Any administrative action taken against the bail agent in another jurisdiction or by another governmental agency in this State within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order or other relevant legal documents.
(2) Any bankruptcy proceeding, action, or order in this
State or another jurisdiction concerning such bail agent or licensed bail
agent business entity not later than 30 days after initiation of such
proceeding, action or order. The written notice required under this subsection
shall be accompanied by all supporting documentation.
SYNOPSIS
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This bill clarifies the original intent of House Bill No. 151 of the 147th General Assembly, which substantially revised the law relating to bail agent licensure and oversight, that individuals or businesses that loan or otherwise provide funds to bail agents for purposes of furnishing bail are themselves required to be licensed as bail agents.Section 3 of this bill clarifies that the duties of bail agents as set forth in Section 4333B(b) apply both to individual property bail agents and business entity licensees and also grants the Commissioner the authority to request from licensees financial statements and balance sheets in a form required by the Commissioner, bank statements and other information deemed necessary by the Commissioner in her review of the business operations of licensees under this Chapter.Section 4 of this bill (i) requires the automatic suspension of a bail entity's license if such entity's designated responsible individual licensee is no longer in good standing and (ii) dictates that a designated responsible individual licensee is responsible for the business entity's failure to comply with the relevant insurance laws.Sections 5 and 6 of this bill correct a typographical error in the original statute.Section 6 also sets forth the procedure for requesting a hearing in connection with a license application denial, which is consistent with the procedures set forth in Chapter 17 of the Insurance Code for producers.Section 7 of this bill includes additional record maintenance requirements in connection with the use of bail funders. The bill creates a standard term ("bail agent business entity") to refer to business entities that advertise and act as bail agents and standardizes the use of the phrase throughout the subchapter. |
