REFERENCE TITLE: bail bond agents; requirements; prohibitions
State of Arizona
Second Regular Session
Senator McComish: Representative McLain
Amending sections 20‑340.01 and 20‑340.03, Arizona Revised Statutes; renumbering sections 20‑340.05 and 20-340.06, Arizona Revised Statutes, as sections 20‑340.06 and 20‑340.07, respectively; Amending title 20, chapter 2, article 3.4, Arizona Revised Statutes, by adding a new section 20‑340.05; relating to bail bond agents.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-340.01, Arizona Revised Statutes, is amended to read:
20-340.01. Bail bond agents; licensure; business entities; place of business; receipt; maintenance of records
A. A person shall not act as a bail bond agent in this state unless the person is licensed by the director in accordance with this article. An applicant for a bail bond agent license shall submit an affidavit attesting to the applicant's residency in this state for at least one year immediately preceding the date of application.
B. Each applicant for a bail bond agent license shall submit a full set of fingerprints to the department of insurance for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The department of insurance shall not issue a license until it receives the state and federal criminal history records check and the applicant is qualified for licensure.
C. The director shall not license a resident business entity as a bail bond agent unless each owner and shareholder is individually licensed as a bail bond agent.
D. A person who is licensed as a bail bond agent in this state is not authorized in this state to transact civil bonds in connection with contracts, administrative proceedings or other noncriminal matters on behalf of a surety insurer unless the bail bond agent is also licensed as a property and casualty producer in this state.
E. Each bail bond agent shall have and maintain a place of business in this state that is accessible to the public and where the bail bond agent principally conducts transactions under the agent's license.
F. As a minimum requirement for permanent office records, each bail bond agent and general lines agent who is engaged in the bail bond business shall maintain a daily bond register that is the original and permanent record of all bonds or undertakings executed by the licensee and that states the:
1. Number of the power of attorney form.
2. Date the bond was executed.
3. Name of the principal.
4. Amount of the bond.
5. Premium charged.
6. Premium reported to the surety company.
7. Security or collateral received.
8. Date the security or collateral was received and the date released.
9. Indemnity agreements.
10. Disposition of the bond.
11. Date of disposition.
G. Each bail bond agent and general lines agent who is engaged in the bail bond business and who accepts monies or any other consideration for any bail bond undertaking shall for each payment received, including the payment of fees and expenses, give to the person paying the monies or giving the consideration a prenumbered receipt as evidence of payment. The receipt must state the date, the name of the principal, a description of the consideration or amount of monies received and the purpose for which received, the number of the power of attorney form attached to the bond, the penal sum of the bond, the name of the person making the payment or giving the consideration and the terms under which the monies or other consideration shall be released. Each bail bond agent shall retain a duplicate copy of each receipt issued as part of the agent's records.
H. The bail bond agent shall keep at the agent's place of business the usual and customary records pertaining to transactions made under the license. The licensee shall keep all the records as to any particular transaction available and open to the inspection of the director at any business time during the three years immediately after the date of completion of the transaction.
I. The bail bond agent shall hold all collateral in a fiduciary capacity for the sole purpose of securing a bond. The bail bond agent shall maintain adequate insurance that protects all personal property received and held by the bail bond agent from loss or destruction. The bail bond agent is responsible for any insurance deductible owed when an indemnitor's collateral is damaged, lost, stolen or disposed of while in the possession of the bail bond agent and a claim is filed. Any weather damage to an indemnitor's personal property that occurs while the property is being stored by the bail bond agent is the responsibility of the indemnitor.
J. A bail bond agent is required to deposit all cash collateral received and held in the course of business in an account separate from any of the agent's business operating accounts.
K. A bail bond agent shall provide a fee disclosure statement that includes all premium and fee schedules to a potential indemnitor.
I. L. The director may examine the business practices, books and records of any bail bond agent as often as the director deems appropriate. The bail bond agent shall pay the costs incurred for the examination.
M. The director may suspend or revoke a bail bond agent license if a licensee's individual fees charged to an indemnitor are more than the maximum fees allowable or if the licensee violates any provision of law or rule in the course of doing business.
Sec. 2. Section 20-340.03, Arizona Revised Statutes, is amended to read:
20-340.03. Bail bond agent prohibitions
A. A bail bond agent shall not:
1. Suggest or advise the employment of or name for employment any particular attorney to represent the agent's principal.
2. Solicit business in or around any place where prisoners are confined or in or around any court.
3. Receive or collect for an attorney any monies or other items of value for any attorney fee, cost or other purpose on behalf of an arrestee, unless a receipt is given.
4. For any purpose, directly or indirectly, enter into an arrangement of any kind or have an understanding with any person to inform or notify any bail bond agent directly or indirectly of any of the following:
(a) The existence of a criminal complaint.
(b) The fact of an arrest.
(c) The fact that an arrest of any person is pending or contemplated.
(d) Any information pertaining to matters described in this paragraph or to the persons involved.
5. Participate in the capacity of an attorney at a trial or hearing of a person on whose bond the bail bond agent is the surety.
6. Accept anything of value from a principal except the premium and expenses. The bail bond agent may accept collateral security or other indemnity from the principal or on behalf of the principal that the bail bond agent shall return on final termination of liability on the bond unless the collateral has been forfeited because the defendant did not appear in court. The collateral security or other indemnity required by the bail bond agent must be reasonable in relation to the amount of the bond.
7. Give, authorize, sign or countersign in blank any power of attorney to bonds unless the authorized person is a licensed bail bond agent directly employed by the bail bond agent giving the power of attorney.
8. Advertise as or claim to be a surety company.
9. Employ or assist in the employment of any person who has been convicted in any jurisdiction of theft or of any felony or of any crime involving carrying or the possession of a deadly weapon or dangerous instrument. This paragraph does not apply to a person whose felony conviction has been set aside or whose civil rights have been restored because of a felony conviction, except for a conviction of theft or of any crime involving carrying or the possession of a deadly weapon or dangerous instrument.
B. For the purposes of subsection A, paragraph 9 this paragraph, "employment" means working for a salary, a commission or under contract or owning, operating or controlling any business or agency that solicits, services or assists in any way in dealing in bail bonds.
10. Charge a fee or expense that is not in the fee agreement disclosure in connection with any bail transaction if the fee or expense is solely for the benefit of the bail bond agent and is not justifiable as a necessary expense.
11. Indemnify a bail bond or secure the release of a person, unless the person is the bail bond agent or a person related to the bail bond agent by consanguinity or affinity to the second degree, without a bail bond contract and a fee agreement signed before posting a secured appearance bond.
C. B. Law enforcement, adjudication and prosecution officials and the officials' employees, attorneys‑at‑law, officials authorized to admit to bail and state and county officers shall not be bail bond agents and shall not directly or indirectly receive any benefits from the execution of any bail bond. This section does not prohibit a bail bond agent from hiring counsel or asking assistance of a law enforcement officer.
D. C. In any bail transaction or in connection with any bail transaction, a bail bond agent shall not directly or indirectly charge or collect monies or other valuable consideration from any person except for the following purposes:
1. To pay the premium at the rates that are established by the surety insurer and that are approved by the director.
2. To provide collateral.
3. To be reimbursed for actual and reasonable expenses incurred in connection with the individual bail transaction.
Sec. 3. Renumbering
A. Section 20‑340.05, Arizona Revised Statutes, is renumbered as section 20‑340.06.
B. Section 20‑340.06, Arizona Revised Statutes, is renumbered as section 20‑340.07.
Sec. 4. Title 20, chapter 2, article 3.4, Arizona Revised Statutes, is amended by adding a new section 20-340.05, to read:
20-340.05. Premiums; renewal