Report Title:

Bail Agents; Regulation

 

Description:

Establishes grounds for the denial, nonrenewal, suspension, or revocation of a bail agent's insurance producer's license. Establishes fiduciary responsibilities for bail agents. Prohibits an attorney who is a bail agent from representing a person to whom the attorney has furnished bail for compensation. Defines terms "bail agent" and "on the board". (SB1961 CD1)

 


THE SENATE

S.B. NO.

1961

TWENTY-FOURTH LEGISLATURE, 2007

S.D. 1

STATE OF HAWAII

H.D. 1

 

C.D. 1

 

 

A BILL FOR AN ACT

 

 

RELATING TO BAIL.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Chapter 431, Hawaii Revised Statutes, is amended by adding a new article to be appropriately designated and to read as follows:

"article . Bail agents; sureties

431: -A Definitions. As used in this article:

"Bail agent" means a licensed insurance producer under article 9A who is appointed by an authorized surety insurer, furnishes bail for compensation in any court in this State, and has the power of attorney to execute or countersign bail bonds in connection with judicial proceedings. "Bail agent" shall not include a person who is a full-time salaried officer or employee of an insurer or a person who pledges United States currency, a United States postal money order, a cashier's check, or other property as security for a bail bond in connection with a judicial proceeding, whether for compensation or otherwise.

"On the board" means that the name of a bail agent has been publicly posted or disseminated by a court as being ineligible to write bail bonds.

431: -B License denial, nonrenewal, suspension, or revocation. In addition to causes in section 431:9A-112, the commissioner may deny, place on probation, suspend, revoke, or refuse to issue or renew a bail agent's license and may levy a civil fine or penalty in accordance with articles 2 and 9A, or any combination of these actions, for any of the following causes:

(1) Failing to satisfy, pay, or otherwise discharge a bail forfeiture judgment after having the bail agent's name placed on the board for more than forty-five consecutive days for the same forfeiture;

(2) Failing to report, to preserve without use and retain separately, or to return collateral taken as security on any bond to the principal or depositor of the collateral;

(3) Failing to pay a final, nonappealable judgment award for failure to return or repay collateral received to secure a bond;

(4) Continuing to execute bail bonds in any court in this State while on the board, where the bail forfeiture judgment that resulted in being placed on the board has not been paid, stayed, vacated, exonerated, or otherwise discharged; or

(5) Paying, directly or indirectly, any commission, service fee, brokerage, or other valuable consideration to any person selling, soliciting, or negotiating bail within this State unless, at the time the services were performed, the person was a duly licensed bail agent for the performance of the services.

431: -C Fiduciary responsibilities. (a) In addition to the requirements of section 431:9A-123.5, bail agents shall have the responsibilities of a trustee for all premium, return premium funds, and collateral or security received or collected under this article.

(b) All premiums received, less commissions if authorized, shall be remitted to the insurer on or before the contractual due date or, if there is no contractual due date, within forty-five days after receipt.

(c) All returned premiums received from or credited by insurers to the account of the bail agent shall be remitted to or credited to the account of the person entitled thereto within thirty days after the receipt or credit.

(d) An insurer having knowledge that a bail agent has failed to account for any collected premium to the insurer more than forty-five days after the contractual due date or, if there is no contractual due date, more than ninety days after receipt, shall promptly report the failure to the commissioner in writing.

(e) Every insurer shall remit unearned premium funds to the person entitled thereto or shall otherwise credit the account of the bail agent as soon as is practicable after entitlement to the premium funds has been established, but in no event more than forty-five days after the effective date of any cancellation or termination effected by the insurer or after the date of entitlement thereto, as established by notification of cancellation or of termination or as otherwise established. A bail agent having knowledge of a failure on the part of any insurer to comply with this subsection shall promptly report the failure to the commissioner in writing.

(f) No bail agent shall commingle premiums belonging to insurers and return premiums received or held by the bail agent or persons entitled to such funds with the bail agent's personal funds or with any other funds except those directly connected with the bail agent's bail business.

431: -D Bail agent not to act as attorney. A bail agent who is also an attorney shall not represent a person to whom the attorney has furnished bail for compensation in any proceeding for which the attorney has furnished bail. The commissioner may place on probation, suspend, revoke, or refuse to renew a bail agent's license and may levy a civil fine or penalty in accordance with articles 2 and 9A, or any combination of these actions, for violation of this section."

SECTION 2. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 3. This Act shall take effect on July 1, 2008.