RULE 054.00.92-003 - Regulation of Bail Bond Business
RULE 054.00.92-003. Regulation of Bail Bond Business
SECTION 1. PURPOSE
The purpose of this Rule and Regulation ("rule" J is to sat specific requirements that should be followed by companies engaged in the bail bond business in this State, pursuant to Act 417 of.1989, codified as Ark. Code Ann. § 17-17-101 et sen.
SECTION 2. AUTHORITY
This rule is issued pursuant to the authority vested in the Commissioner under Ark. Code Ann. §§ 25-15-201, et sea., 17-17-106 (Supp. 1991), 23-51-108 (1987), and all other applicable provisions of Arkansas law.
SECTION 3. EFFECTIVE DATE AND APPLICABILITY
This rule shall be effective January 8, 1992 and shall be applicable to all qualified professional bail bond companies and their licensees and all applicants for a professional bail bond company or individual bail bondsman license.
SECTION 4. DEFINITIONS
The following definitions as used in this rule shall have the fallowing meaning:
A. "Department" shall mean the Arkansas Insurance Department:;
B. "Commissioner" shall mean the Commissioner of Insurance;
C. "Company" shall mean a professional bail bond company as defined by Ark. Code Ann. § 17-17-101(7);
D. Bail bondsman" shall mean a professional bail bondsman as defined by Ark. Code Ann. § 17-17-101(6);
E. "Premium" shall mean the money paid to a bail bondsman or professional bail bond company for release of an arrestee;
F. "Arrestee" shall mean any person actually detained or subject to detention in custody whose release may lawfully be effected by bail;
G. "Licensee" shall mean a professional bail bond- comnany or a professional bail bondsman;
H. "Bail bond" shall mean a bond for a specified monetary amount executed by the defendant or principal and a qualified licensee which is issued to a court, magistrate, or authorized officer as security for the subsequent court appearance of the defendant upon his release from actual custody pending the appearance;
I. "Jail" shall mean any police station, sheriff's office or other place vhere persons in the custody of the law are detained;
J. "Principal" shall mean the person(s) paying the bail bond premium and/or giving the collateral.
SECTION 5. BAIL BOND FORM
Every bail band issued by a professional bail bond company or its licensee(s) shall be substantially in the form prescribed in Appendix "A" of this rule.
SECTION 6. QUALIFYING POtfER OF ATTORNEY FORM
A. Each company, upon either an initial or renewal application for a company license, must submit to this Department a Qualifying Power of Attorney from the company, specifying the authority limits of each of its licensees.
B. The Qualifying Power of Attorney shall be executed in the form prescribed in Appendix "B" of this rule.
C. Those companies operating as sole proprietorships shall not be required to execute and file a Qualifying Power of Attorney form unless such a company has licensees other than the sale proprietor.
SECTION 7. REGULAR POffER OF ATTORNEY FORM
Every bond executed by a bail bondsman shall have attached to it a numbered power of attorney indicating a valid appointment from a professional bail bond company and referring to that company. The power of attorney shall be in the form prescribed in Appendix "C of this rule. A sole proprietor of a company shall attach to bonds he executes an affidavit of sole proprietorship in the form prescribed by Appendix "D" of this rule.
SECTION 8. COMPANY CODES
A. Upon issuance of a license to a professional bail bond company, the Department shall assign an alpha code which will be particular to that company. For each individual licensee of that company, the Department will assign a consecutive numerical code.
B. All codes assigned by the Department shall appear in the upu-er right hand comer of any bail bands, powers of attorney, collateral receipts, quarterly reports or premium receipts executed by the licensee, and may be printed or written in ink.
SECTION 9. QUARTERLY REPORTS
A. Every company shall file with the Department a quarterly report as required by Ark. Code Ann. § 17-17-303(c). The report shall be made in the form as prescribed in Appendix "E" of this rule. The form may be either printed or computer generated. Bonds required to be listed should be listed in sequential number order.
B. The first: quarterly report will be for the period ending June 30, 1989. Subsequent due dates are as follows:
July I - September 30
October 1 - December 31
January 1 - March 31
April 1 - June 3 0
C. quarterly reports must be received by the Department- on the above referenced due dates by 5:00 p.m.
D. Companies may request an extension of time for filing a Quarterly Report from the Finance Division. Such request must be written, received, and approved in advance of the due date, and must be for good cause shown.
SECTION 10. SECURED BAIL BONDS
A "secured" bail bond is one which is secured by a grant of an interest in identifiable tangible property. A promissory note, whether or not co-signed, will not be considered security. A bail bond is only secured up to an amount equal to the fair market value of the interest granted in tangible property. If the amount of the bond exceeds the value of the security, that amount so exceeding the value of the security shall be considered unsecured.
SECTION 11. UNSECURED BOND COMMITMENT; PENALTIES
A. If a professional bail bond company exceeds the unsecured bond commitment amount prescribed by Ark. Code Ann. § 17-17-304, such company will have twenty (20) days from receipt of written notice from the Commissioner to bring its unsecured bond commitment into compliance with Cade requirements, provided, however, no unsecured bonds shall be written by any company while such company is out of compliance.
B. Any company on notice that it is out of compliance shall submit proof within twenty (20) days that it has rectified the violation by the posting of an additional certificate of deposit or clean irrevocable letter of credit for an additional amount.
C. The license of any company which fails to cure its violations of Ark. Coda Aim. § 17-17-304 may be suspended by order of the Commissioner, and a hearing to show cause why the license should not be revoked shall be held within ten (10) days of the suspension. If after hearing, the Commissioner finds that an unrectified violation exists, he may revoke the license of the offending company.
SECTION 12. CLEAN IRREVOCABLE LETTER OF CREDIT
Every company posting a clean irrevocable letter of credit with the Department pursuant to Ark. Code Ann. § 17-17-205(a)(2) (A) shall post such letter using the form approved by the Commissioner and contained in Apoendix; "F" of this rule. Copies of the clean irrevocable letter of credit may be obtained from the License Division of the Department. Substituted forms from financial institutions are not acceptable.
SECTION 13. CERTIFICATES OF DEPOSIT
Any certificate of deposit filed with the Commissioner pursuant to Ark. Code Ann. § 17-17-205(a)(1) shall be a certificate of deposit issued by an Arkansas or federally chartered bank located in Arkansas.
SECTION 14. LICENSE REQUIRED
A. Any licensed bail bondsman or company who permits any person not so licensed to solicit or engage in the bail bond business in his/her/its behalf, shall be deemed in violation of Ark. Code Ann. § 17-17-201.
B. The definition of bail bond business shall not include those individuals employed solely for the performance of clerical, stenographic, investigative or other administrative duties if the employee's compensation is not related to the number of bail bonds written.
SECTION 15. LICENSE RENEWAL, HEARINGS, REVOCATION OR SUSPENSION Or LICENSE
By reference, the provisions contained in Ark. Code Ann. §§ 23-61-301 through 23-61-306 and § 25-15-211 shall he applicable to the licenses issued by the Commissioner under Ark. Code Ann. §§ 17-17-201, et. seq. and the proceedings authorized thereunder.
SECTION 16. LICENSE DENIAL
A bail bondsman's license shall not be issued or renewed to any individual if that individual is:
A. Regularly or frequently employed by:
(1) A court of lav; or
(2) A public law enforcement agency.
B. An attorney licensed by the State of Arkansas or an employee of any such attorney.
C. A person or entity whose license has been previously revoked.
SECTION 17. FINANCIAL STATEMENTS; GUIDELINES
A. Any assets listed on the financial statement of a corporation seeking to be licensed or relicensed shall be assets directly owned by the corporation and held in the name of such corporation. Assets listed on the financial statement of a partnership seeking licensure or relicensure as a professional bail bond company shall be those assets owned by the partnership; assets owned individually by one partner may also be listed as long as such assets are identified separately on the financial statement. Assets of the sole proprietor shall be those personally owned and held by such proprietor.
B. Certificates of Deposit which are filed with the Commissioner pursuant to Ark. Code Ann. § 17-17-205(a) (1) must be identified on financial statements.
C. Any real or personal property listed as an asset must be property not subject to the exemption laws of this state, unless a waiver to said exemption has been properly executed and filed with the financial statement. Notes receivable from arrestees and principals shall not be considered an asset. Property held as collateral on a bond shall not be considered an asset.
D. The Commissioner may request any documentation to verify the worth of any asset listed or to show the extent of any encumbrance or the lack of any encumbrance. Any real or personal property valued at over 510,000.00 shall be shown at its current appraised valuation unless such asset is in the form of cash or bank deposits; then the value shall be their actual value, or in the case of bonds or publicly traded stock, the actual market value. Licensees listing stacks issued by closely held corporations and/or which are not publicly traded must include a written statement of the stock valuation from a corporate officer and a current audited financial statement. Any appraisal, or financial statement submitted shall be from a qualified, independent and objective source.
SECTION 18. CERTIFICATE OF DEPOSIT AND CLEAN IRREVOCABLE LETTER OF CREDIT; RELEASE
Any company desiring the release of a certificate of deposit or clean irrevocable letter of credit which has been filed with the Commissioner shall comply with either of the following requirements:
A. A company seeking release of a certificate of deposit or a clean irrevocable letter of credit may file with the Commissioner a replacement security in equal or greater amount to the security for which release is sought, which is specifically retroactive to the date the original security was issued.
B. If a company vishes to procure the release of a clean irrevocable letter of credit or of a certificate of deposit, it must present a statement in writing from each court of each county in which the company was engaged in business to write bail bonds, that the company has satisfied all its outstanding liabilities, both actual and potential; that no outstanding forfeitures against the company remain; and that all bail bonds which were issued by the company have been discharged; and that all civil judgments as to forfeitures on bonds issued by the licensee have been paid in full.
SECTION 19. COLLATERAL; FIDUCIARY RELATIONSHIP
Any licensee who receives collateral in connection with a bail transaction shall receive such collateral in a fiduciary capacity, and prior to any forfeiture of bail shall keep it separate and apart from any other funds or assets of such bail bondsman.
SECTION 20. RETURN OF EXCESS COLLATERAL ON FORFEITURE
If collateral received is in excess of the bail forfeited, such excess shall be returned to the person who placed the collateral with the licensee immediately upon the application of the collateral to the forfeiture. Documented reasonable expenses incurred due to a breach of the bail bond contract or Court Order may be deducted from the collateral, if the Court does not allow a remission from the sum specified in the bail bond.
SECTION 21. REFUND OF PREMIUM
The principal shall be entitled to a refund of his premium when the arrestee is surrendered by his bail bondsman at any time prior to the final termination of the liability on the band provided that the arrestee has not committed any of the following:
A. left the jurisdiction of the court without written consent of the court for a period in excess of twenty-four (24) hours;
B. moved from his place of residence without notifying his bail bondsman;
C. was arrested for an offense other than a traffic violation;
D. violated any substantive provision in the bail bond contract.
SECTION 22. ALLOWABLE CHARGES
A. The ^premium allowed by Ark. Code Ann. § 17-17-301 is the maximum amount a bail bondsman may charge for writing a bond. The following separate charges are not allowable and shall not be charged by a company or any licensee:
(1) Operating expenses
(3) Telephone calls
(4) Photo fees
(5) Extra personnel fees
(7) Prepaid recovery expenses
B. Allowable charges do include any expenses such as filing fees for documents or other fees which are expenses incurred by the person executing any documents in order to procure coverage by a bail bond.
C. Any rebating or discounting of premiums by any company or licensee is strictly prohibited.
SECTION 23. FORFEITURES; MISREPRESENTATIONS
No bail bondsman shall purposely make any misleading or untrue representations to any court or to any public official for the purpose of avoiding or preventing a forfeiture of bail or having set aside a forfeiture which has occurred.
SECTION 24. UNPAID FORFEITURES AND MISCONDUCT; LICENSE SANCTIONS
A. If it is found that any licensee has been found guilty of misconduct or malfeasance and upon notice from the aggrieved party of damages due to the licensee's misconduct, the Commissioner may notify the licensee by certified mail of the claim.
(1) If the verified amount due the aggrieved party is not paid within twenty (20) days of receipt of notice, the Commissioner may suspend the license and immediately withdraw the allowable amount from the posted certificate of deposit or maintain a civil action on the letter of credit.
(2) The license of the malefactor shall remain suspended until the amount of damage is paid.
(3) If the amount remains unpaid after suspension, the Commissioner may order a hearing for the licensee to show cause why his license should not be revoked.
B. when a final unpaid civil judgment of forfeiture is forwarded to the Commissioner pursuant to Ark. Code Arm. § 17-17-208(b)(1), the Commissioner shall notify the licensee involved by certified mail. If the forfeiture judgment remains unpaid for ten (10) days following receipt of notice, the Commissioner may automatically suspend the license and make claim against the licensee's security deposit up to the allowable amount of ten thousand dollars ($10,000.00).
SECTION 25, BAIL BOND COMPLAINT FORM AND PROCEDURES
Any person desiring to make a complaint concerning an alleged violation of Ark. Code Ann. §§ 17-17-201, et seq., by any company or individual bondsman shall use the bail bond complaint form prescribed in Appendix "G" of this rule. A copy of the complaint form may be obtained from the Legal Division of the Arkansas Insurance Department. The form must be signed by the complaining party under penalty of perjury and notarized.
SECTION 25. GIFTS PROHIBITED
No licensee shall give, directly or indirectly, any gift of any kind to any public official, any candidate for public office, or any employee of a governmental agency who has duties or responsibilities with respect to the administration of justice or a place wherein detention of a person charged with a crime may occur or to any prisoner in any jail. Items which are distributed generally far the purposes of advertising and political contributions lawfully given shall not be considered gifts for the purposes of this section.
SECTION 27. NOTICE OF CHANGE OF ADDRESS; COOPERATION
A. Every bail bandsman and professional bail bond company shall notify the Arkansas Insurance Department in writing of any change of his/her/its principal business address and/or his/her residence address within ten (10) days of such change.
B. Every bail bondsman and company shall promptly resoand to all correspondence, request far information, or otherwise, directed to the bondsman or company by the Arkansas Insurance Department or an employee thereof. Every professional bail bondsman and/or company duly licensed shall fully cooperate with any examination or investigation conducted by the Department.
C. Failure on the part of any company or its licensees to make ail financial and business records available for inspection or examination upon request by the Arkansas Insurance Department, or failure to otherwise cooperate with the requirements of subsections (A) or (B) of this section, shall be grounds for automatic suspension according to the procedures set out in Section 11(C) of this rule.
SECTION 28. WRITTEN STATEMENT OF BAIL TRANSACTION; CONTENTS
Every bail bondsman shall at the time of obtaining the release of an arrestee an bail, deliver (and keep a copy for his own records) to such arrestee or to the principal a numbered document signed by the arrestee containing the following information:
(1) the name and address of the bail bondsman;
(2) the name of the professional bail bond company;
(3) the name of the arrestee;
(4) the date of arrest;
(5) the date of release of the arrestee;
(6) the date, time and place of the arrestee's required appearance, if known;
(7) the amount of bail;
(8) the offenses with which the arrestee is charged;
(9) the premium for the bail bond;
(10) the amount received;
(11) the unpaid balance, if any; and
(12) a description of and receipt number for any collateral received.
SECTION 29. EXAMINATIONS
Any person who, after proper application for an exam permit, passes the required exam for licensure as a professional bail bondsman shall have one (1) year from the date that the exam result is certified to apply for a license. If no application is made within one (1) year, such person, if desiring to be licensed, shall be required to retake and pass the examination.
SECTION 30. RECORD RETENTION
All records required herein shall be maintained for a period of five (5) years at one central location. If the records are kept at a location other than the mailing address on file at the Department, then such address must be submitted to the Department in writing with a notation that is where the records are maintained.
SECTION 31. COMPANY APPOINTMENT
A professional bail bondsman can represent no more than one professional bail bond company at a time.
SECTION 32. SEVERABILITY
Any section or provision of this rule held by the court to be invalid or unconstitutional will not affect the validity of any other section or provision.(1/22/1992)
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