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[Utah Administrative Code Table of Contents]
[Title R590. Table of Contents]
R590-186-1 Purpose.
This rule establishes uniform criteria and procedures for the initial and renewal licensing, of a bail bond surety company, and sets standards of conduct for those in the bail bond surety business in the State of Utah.
R590-186-2 Authority.
This rule is promulgated pursuant to:
(1) Section 31A-35-104 which requires the commissioner to adopt by rule specific certification guidelines and standards of conduct for the bail bond business;
(2) Subsection 31A-35-301 (1) which authorizes the commissioner to adopt rules necessary to administer Chapter 35 of Title 31A;
(3) Subsection 31A-35-401 (1)(c) which allows the commissioner to adopt rules governing the granting of certificates of authority for bail bond surety companies;
(4) Subsection 31A-35-401 (2) which allows the commissioner to require by rule additional information from bail bond applicants applying for certificates of authority;
(5) Subsection 31A-35-406 (1)(b) which allows the commissioner to establish by rule the annual renewal date for the renewal of a certificate of authority.
R590-186-3 Scope and Applicability.
This rule applies to any person engaged in the bail bond surety business.
R590-186-4 Initial Company License.
(1) Persons desiring to become licensed as bail bond surety companies shall file with the Bail Bond Surety Oversight Board (Board) the application packet for a Certificate of Authority as a bail bond surety company which can be obtained from the Insurance Department and requires the following information:
(a) the name, address, and telephone number of the bail bond surety company;
(b) the name, date of birth, social security number of the principals or officers in the company;
(c) a statement whether the applicant:
(i) is doing business under only one name in the State of Utah and has complied with state and local business regulations, including filing with the appropriate authority, if doing business under an assumed name;
(ii) has ever been refused a license or had a license revoked by any public authority;
(iii) has engaged in any unprofessional conduct as described in this rule;
(iv) is the subject of any outstanding civil judgement, or has been convicted of any felony or of any misdemeanor that involves the misappropriation of money or property, dishonesty or perjury;
(v) has failed to report, or to preserve, or to retain separately, any collateral taken as security on any bond to the principal, indemnitor, or depositor of such collateral;
(vi) has an outstanding judgement on a bail forfeiture, which judgement is or has been subject to execution; and
(vii) is the holder of real or personal property within the state.
(d) a statement of the number of years the applicant has done business as a bail bond agent or as a bail bond surety company in this or another state;
(e) a statement affirming that the applicant has not willfully misstated or negligently reported any material fact in the application or procured a misstatement in the documents supporting the application.
(2) The applicant shall pay the annual license fee of $500 and provide at least one of the following:
(a) If the applicant relies on a letter of credit as the basis for issuing a bail bond, the applicant shall provide an irrevocable letter of credit with a minimum face value of $250,000 assigned to the State of Utah from a an entity qualified by state or federal regulators to do business as a financial institution in the state of Utah.
(b) If the applicant relies on the ownership of real or personal property located in Utah as the basis for issuing bail bonds, the applicant shall provide a financial statement reviewed by a certified public accountant as of the end of the most current fiscal year. The financial statement must show a net worth of at least $250,000, including a minimum of $50,000 in liquid assets. The applicant shall also provide a copy of the applicant's federal income tax returns for the prior two years and, for each parcel of real property owned by the applicant and included in the applicant's net worth calculation, a preliminary title report dated not more than one month prior to the date of the application and an appraisal dated not more than two years prior to the date of the application.
(c) If the applicant relies on their status as the agent of a bail bond surety insurer as the basis for issuing bail bonds, the applicant shall provide:
(i) a Qualifying Power of Attorney issued by the bail bond surety insurer; and
(ii) a copy of the bail bond surety insurer's Utah Certificate of Authority indicating that the insurance company is in good standing and is authorized to write bail bond policies in this state.
(3) Applications approved by the Board will be forwarded to the insurance commissioner for the issuance of a certificate of authority.
(4) Applications disapproved by the Board may be appealed to the insurance commissioner within 15 days of mailing the notice of disapproval.
R590-186-5 Company License Renewal.
A licensed bail bond surety company shall renew its Certificate of Authority on or before July 15 of each year by meeting the following requirements:
(1) file with the insurance commissioner a renewal application packet in a form approved by the commissioner and pay the required annual licensing fee. The renewal packet contains all of the information required in the initial application packet described in R590-186-4(1), plus the additional information described in this section;
(2) if the applicant relies on the ownership of real or personal property as the financial basis for issuing bail bonds, a statement that no material changes have occurred negatively affecting the property's title, including any liens or encumbrances that have occurred since the last license renewal;
(3) property bail bond surety companies shall also provide:
(a) a financial statement reviewed by a certified public accountant as of the end of the most current fiscal year showing a net worth of at least $250,000, at least $50,000 of which must consist of liquid assets and a copy of the applicant's federal income tax return for the prior year; and
(b) every third renewal, a preliminary title report dated not more than one month prior to the date of the renewal application for each parcel of real property owned by the applicant; or
(c) every sixth renewal, a preliminary title report and a current appraisal dated not more than one month prior to the date of the renewal application for each parcel of real property owned by the applicant.
R590-186-6 Agent License and Renewal.
(1) Bail bond surety companies and insurers are required to issue bail bonds only through licensed bail bond agents that have been contracted with and appointed by the bail bond surety company or insurer for whom they are issuing bail bonds.
(2) All persons doing business as bail bond agents must be licensed in accordance with Chapter 23 of Title 31A and applicable department rules regarding individual agent licensing. Bail bond agent licenses are individual limited line licenses. These licenses are issued for a two year period and require no licensing examination or continuing education.
(3) Individual bail bond agent licenses must be renewed at the end of the two year licensing period in accordance with Chapter 23 of Title 31A and applicable department rules regarding individual agent licensing renewal.
R590-186-7 Unprofessional Conduct.
Persons in the bail bond surety business may not engage in unprofessional conduct. For purposes of this rule, unprofessional conduct means the violation of any applicable insurance law, rule, or valid order of the commissioner, or the commission of any of the following acts by bail bond sureties, by bail bond surety agents or by bail bond enforcement agents:
(1) having a license as a surety revoked in this or any other state;
(2) being involved in any transaction which shows unfitness to act in a fiduciary capacity or a failure to maintain the standards of fairness and honesty required of a trustee or other fiduciary;
(3) willfully misstating or negligently reporting any material fact in the initial or renewal Certificate of Authority application or procuring a misstatement in the documents supporting the initial or renewal application;
(4) being the subject of any outstanding civil judgment which would reduce the surety's net worth below the minimum required for licensure, or being convicted of any felony or of any misdemeanor that involves the misappropriation of money or property, dishonesty or perjury. If the bail bond surety company or one of its bail bond surety agents or bail bond enforcement agents has been convicted of such an offense or the subject of any such judgment, they may present evidence regarding the circumstances of the conviction or judgment. The Board may take this evidence into consideration in determining whether such conviction requires referral to the commissioner;
(5) failing to report any collateral taken as security on any bond to the principal, indemnitor, or depositor of such collateral;
(6) failing to preserve, or to retain separately, or both, any collateral taken as security on any bond;
(7) failing to return collateral taken as security on any bond to the depositor of such collateral, or the depositor's designee, within ten business days of having been notified of the exoneration of the bond and upon payment of all fees owed to the bail bond agent, whichever is later;
(8) having an outstanding judgment on a bail forfeiture, which judgment is or has been subject to execution;
(9) failing to advise the insurance commissioner of any change that has reduced the surety's net worth below the minimum required for licensure;
(10) using a relationship with any person employed by a jail facility to obtain referrals;
(11) offering consideration or gratuities to jail personnel or peace officers under any circumstances which would permit the inference that said consideration was offered to induce bonding referrals or recommendations;
(12) failing to deliver to the incarcerated person, or the person arranging bail on behalf of the incarcerated person, prior to the time the incarcerated person is released from jail, a one page disclosure form which at a minimum includes:
(a) the amount of the bail;
(b) the amount of the surety's fee, including bail bond premium, preparation fees, and credit transaction fees;
(c) the additional collateral, if any, that will be held by the surety;
(d) the incarcerated person's obligations to the surety and the court;
(e) the conditions upon which the bond may be revoked;
(f) any additional charges or interest that may accrue
(g) any co-signors or indemnitors that will be required; and
(h) the conditions under which the bond may be exonerated and the collateral returned.
(13) using an unlicensed bail bond agent or unlicensed bail bond enforcement agent;
(14) using a bail bond agent not contracted and appointed by the bail bond surety company;
(15) charging excessive or unauthorized premiums, excessive fees or other unauthorized charges;
(16) requiring unreasonable collateral security;
(17) failing to provide an itemized statement of all expenses deducted from collateral, if any;
(18) requiring as a condition of his executing a bail bond that the principal agree to engage the services of a specified attorney;
(19) preparing or issuing fraudulent or forged bonds or power of attorney;
(20) signing, executing, or issuing bonds by an unlicensed person;
(21) executing bond without countersignature by a licensed agent at time of issue;
(22) failing to account for and to pay any premiums held by the licensee in a fiduciary capacity to the bail bond surety company, bail bond surety insurer or other person who is entitled to receive them; and
(23) failing to comply with the provisions of the laws of this state, or rule, or order of the insurance commissioner for which issuance of the certificate of authority could have been refused had it then existed and been known to the Board.
R590-186-8 Investigating Unprofessional Conduct.
The Board shall investigate allegations of unprofessional conduct on the part of any bail bond surety, bail bond surety agent, or bail bond surety enforcement agent. Complaints alleging unprofessional conduct shall be made in writing, signed by the complainant, and addressed to the Board at the Department of Insurance.
1. Investigations performed by the Board shall be completed in the following manner:
a. Upon receipt of a complaint of unprofessional conduct, the Board shall provide a copy of the complaint to the person against whom the complaint was made, and if warranted to the person's surety. The Board may make redactions to the copy of the complaint mailed under this subsection that may be necessary to protect the identity or interests of the person making the complaint if the complainant so requests.
b. The subject of the complaint shall provide to the Board a written response to the complaint within 15 days of the date the complaint was mailed to him.
c. At the next meeting of the Board after the expiration of 15 days after mailing the complaint or after receiving the response to the complaint, which ever is earlier, the Board shall review the complaint and the response to determine whether the allegations appear to have merit. If the Board determines that the complaint has no merit, it may close its file on the matter without further action. If the Board determines that the allegations appear to have merit, the Board shall conduct further investigation of the matter.
d. In investigating allegations that appear to have merit, the Board may take and record witness statements under oath and may request any documents or other evidence from any person, including necessary financial records. Witnesses may be compensated for their appearances as specified in 31A-2-301. The Board may request a Subpoena from the Commissioner to compel the production of documents or other evidence or to compel the testimony of a witness.
e. After the Board completes its investigation, it shall:
i. close the investigation without further action if the allegations have been shown to be unfounded or if the matter complained of is satisfactorily resolved and the Board believes that no further action is necessary; or
ii. if the investigation shows that unprofessional conduct did occur that requires the imposition of sanctions, it shall compile the evidence necessary to pursue the matter in an administrative proceeding by the Department of Insurance, and shall make a written report of its findings and of its recommendations for the penalties to be applied, and forward the report and evidence to the Commissioner for further action within 15 days of the conclusion of the investigation.
2. Except for matters referred to the Commissioner for further proceedings, the Board shall retain a file on each of the investigations it conducts concerning unprofessional conduct for a period of 5 years. Files regarding investigations conducted by the Board shall be classified as protected under Governmental Records Access and Management Act (GRAMA).
R590-186-9 Bonding Limits.
(1) An insurance bondsman may not maintain outstanding bail bond obligations in excess of the amount allowed by the insurance company.
(2) A letter of credit bondsman and/or a property bondsman may not maintain outstanding bail bond obligations in excess of the amounts provided in the table below:
Months Licensed Ratio of Outstanding Bond In Utah Obligations to Letter of Credit Limit or Net Worth 0 to 36 5 to 1 Over 36 10 to 1
R590-186-10 Publication of Licensed Bail Bond Surety Companies.
On or before September 1 of each year, the Board shall publish a list of bail bond surety companies licensed to do business in the State of Utah.
R590-186-11 Penalties.
Violations of this rule are punishable pursuant to Section 31A-2-308.
R590-186-12 Severability.
If any provision or clause of this rule or its application to any person or situation is held invalid, such invalidity may not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this and the provisions of this rule are declared to be severable.
[Indexing]
KEY: insurance
September 25, 1998
[Editor's note: Below are references
to the Utah Code that are listed by the
agency making this rule as authority
for the rule.]
31A-35-104
31A-35-301
31A-35-401
31A-35-406
