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H.B. 376 Enrolled
AN ACT RELATING TO INSURANCE AND JUDICIAL PROCEDURE; MOVING THE
ADMINISTRATION OF BAIL BOND SURETIES FROM THE COURTS TO THE
INSURANCE DEPARTMENT, AND PROVIDING DEFINITIONS AND PROCEDURES
FOR ADMINISTRATION; PROVIDING COURT DISCRETION TO IMPOSE
REASONABLE CONDITIONS OF PRETRIAL RELEASE; AND REVISING PROCEDURES
FOR BAIL FORFEITURE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
31A-2-203, as last amended by Chapter 316, Laws of Utah 1994
31A-2-308, as last amended by Chapter 316, Laws of Utah 1994
31A-4-102, as last amended by Chapter 20, Laws of Utah 1995
31A-23-102, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
31A-23-204, as last amended by Chapter 316, Laws of Utah 1994
31A-23-219, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
31A-23-305, as last amended by Chapter 204, Laws of Utah 1986
31A-23-401, as last amended by Chapter 204, Laws of Utah 1986
31A-23-404, as last amended by Chapter 185, Laws of Utah 1997
77-20-1, as last amended by Chapter 252, Laws of Utah 1996
77-20-3, as enacted by Chapter 15, Laws of Utah 1980
77-20-4, as enacted by Chapter 15, Laws of Utah 1980
77-20-5, as last amended by Chapter 130, Laws of Utah 1994
77-20-7, as enacted by Chapter 15, Laws of Utah 1980
ENACTS:
31A-23-211.5, Utah Code Annotated 1953
31A-35-101, Utah Code Annotated 1953
31A-35-102, Utah Code Annotated 1953
31A-35-103, Utah Code Annotated 1953
31A-35-104, Utah Code Annotated 1953
31A-35-201, Utah Code Annotated 1953
31A-35-202, Utah Code Annotated 1953
31A-35-301, Utah Code Annotated 1953
31A-35-401, Utah Code Annotated 1953
31A-35-402, Utah Code Annotated 1953
31A-35-403, Utah Code Annotated 1953
31A-35-404, Utah Code Annotated 1953
31A-35-405, Utah Code Annotated 1953
31A-35-406, Utah Code Annotated 1953
31A-35-407, Utah Code Annotated 1953
31A-35-501, Utah Code Annotated 1953
31A-35-502, Utah Code Annotated 1953
31A-35-503, Utah Code Annotated 1953
31A-35-601, Utah Code Annotated 1953
31A-35-602, Utah Code Annotated 1953
31A-35-603, Utah Code Annotated 1953
31A-35-604, Utah Code Annotated 1953
31A-35-605, Utah Code Annotated 1953
31A-35-606, Utah Code Annotated 1953
31A-35-607, Utah Code Annotated 1953
31A-35-608, Utah Code Annotated 1953
31A-35-701, Utah Code Annotated 1953
31A-35-702, Utah Code Annotated 1953
31A-35-703, Utah Code Annotated 1953
31A-35-704, Utah Code Annotated 1953
77-20b-101, Utah Code Annotated 1953
77-20b-102, Utah Code Annotated 1953
77-20b-103, Utah Code Annotated 1953
77-20b-104, Utah Code Annotated 1953
REPEALS:
77-20-11, as last amended by Chapter 215, Laws of Utah 1997
77-20-12, as enacted by Chapter 130, Laws of Utah 1994
77-20-13, as enacted by Chapter 130, Laws of Utah 1994
77-20a-1, as last amended by Chapter 79, Laws of Utah 1996
77-20a-2, as enacted by Chapter 54, Laws of Utah 1983
77-20a-3, as enacted by Chapter 54, Laws of Utah 1983
77-20a-4, as enacted by Chapter 54, Laws of Utah 1983
77-20a-5, as enacted by Chapter 54, Laws of Utah 1983
77-20a-6, as enacted by Chapter 54, Laws of Utah 1983
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-2-203 is amended to read:
31A-2-203. Examinations and alternatives.
(1) (a) Whenever the commissioner considers it necessary in order to inform himself about
any matter related to the enforcement of this title, the commissioner may examine the affairs and
condition of:
(i) a licensee under this title;
(ii) an applicant for a license under this title;
(iii) a person or organization of persons doing or in process of organizing to do an insurance
business in this state; or
(iv) a person who is not, but should be, licensed under this title.
(b) When reasonably necessary for an examination under Subsection (1)(a), the
commissioner may examine the accounts, records, documents, or evidences of transactions of the
insurer or other licensee, so far as they relate to the examinee, of any officer or other person who has
executive authority over or is in charge of any segment of the examinee's affairs, or of any affiliate
of the examinee.
(c) On demand, each examinee under Subsection (1)(a) shall make available to the
commissioner for examination any of its own accounts, records, files, documents, or evidences of
transactions and, to the extent reasonably necessary for an examination, those of any persons under
Subsection (1)(b). Failure to make these documents available is concealment of records under
Subsection 31A-27-307 (7). However, if the examinee is unable to obtain accounts, records, files,
documents, or evidences of transactions from persons under Subsection (1)(b), that failure is not
concealment if the examinee immediately terminates the relationship with the other person.
(d) Neither the commissioner nor an examiner may remove any account, record, file,
document, evidence of transaction, or other property of the examinee from the examinee's offices
unless the examinee consents in writing or a court grants permission. The commissioner may,
however, make and remove copies or abstracts of the account, record, file, document, or evidence
of transaction.
(2) (a) The commissioner shall examine every insurer, both domestic and nondomestic, and
every licensed rate service organization, as needed and as otherwise required by law. The
commissioner shall examine insurers, both domestic and nondomestic, no less frequently than once
every five years, but the commissioner may use "in lieu" examinations under Subsection (4) to
satisfy this requirement.
(b) The commissioner shall revoke the certificate of authority of an insurer or the license of
a rate service organization that has not been examined, or submitted an acceptable "in lieu" report
under Subsection (4), within the past five years.
(c) Any 25 persons who are policyholders, shareholders, or creditors of a domestic insurer
may by verified petition demand a hearing under Section 31A-2-301 to determine whether the
commissioner should conduct an unscheduled examination of the insurer. Persons demanding the
hearing shall be given an opportunity in the hearing to present evidence that an examination of the
insurer is necessary. If the evidence justifies an examination, the commissioner shall order one.
(d) When the board of directors of a domestic insurer requests that the commissioner
examine the insurer, the commissioner shall examine the insurer as soon as reasonably possible. If
the requested examination is conducted within two years after completion of a comprehensive
examination by the commissioner, costs of the requested examination may not be deducted from
premium taxes under Section 59-9-102 unless the commissioner's order specifically provides for the
deduction.
(e) Bail bond surety companies as defined in Section 31A-35-102 are exempted from the
five-year examination requirement in Subsection (2)(a), the revocation under Subsection (2)(b), and
Subsections (2)(c) and (2)(d).
(3) In lieu of all or part of an examination under Subsections (1) and (2), or in addition to
it, the commissioner may order an independent audit or examination by technical experts, including
certified public accountants and actuaries. Any audit or evaluation under this Subsection (3) is
subject to Subsection (5), Section 31A-2-204 , and Subsection 31A-2-205 (4).
(4) (a) In lieu of all or any part of an examination under this section, the commissioner may
accept the report of an examination made by the insurance department of another state, another
government agency in this state, the federal government, or other state.
(b) An examination by the commissioner under Subsection (1) or (2) or accepted by the
commissioner under Subsection (4) may use:
(i) an audit already made by a certified public accountant; or
(ii) an actuarial evaluation made by an actuary approved by the commissioner.
(5) (a) An examination may be comprehensive or limited with respect to the examinee's
affairs and condition. The commissioner shall determine the nature and scope of each examination,
taking into account all relevant factors, including:
(i) the length of time the examinee has been licensed in this state;
(ii) the nature of the business being examined;
(iii) the nature of the accounting records available; and
(iv) the nature of examinations performed elsewhere.
(b) The examination of an alien insurer shall be limited to insurance transactions and assets
in the United States, unless the commissioner orders otherwise after finding that extraordinary
circumstances necessitate a broader examination.
(6) To effectively administer this section, the commissioner shall:
(a) maintain an effective financial condition surveillance system, including review of
insurance regulatory information system reports;
(b) employ a priority scheduling method that focuses on insurers most in need of
examination; and
(c) use examination management techniques similar to those outlined in the Financial
Condition Examination Handbook of the National Association of Insurance Commissioners.
Section 2. Section 31A-2-308 is amended to read:
31A-2-308. Enforcement penalties and procedures.
(1) (a) A person who violates any insurance statute or rule or any order issued under
Subsection 31A-2-201 (4) shall forfeit to the state twice the amount of any profit gained from the
violation, in addition to any other forfeiture or penalty imposed.
(b) (i) The commissioner may order an individual agent, broker, adjuster, or insurance
consultant who violates an insurance statute or rule to forfeit to the state not more than $2,500 for
each violation.
(ii) The commissioner may order any other person who violates an insurance statute or rule
to forfeit to the state not more than $5,000 for each violation.
(c) (i) The commissioner may order an individual agent, broker, adjuster, or insurance
consultant who violates an order issued under Subsection 31A-2-201 (4) to forfeit to the state not
more than $2,500 for each violation. Each day the violation continues is a separate violation.
(ii) The commissioner may order any other person who violates an order issued under
Subsection 31A-2-201 (4) to forfeit to the state not more than $5,000 for each violation. Each day
the violation continues is a separate violation.
(d) The commissioner may accept or compromise any forfeiture under this subsection until
after a complaint is filed under Subsection (2). After the filing of the complaint, only the attorney
general may compromise the forfeiture.
(2) Whenever a person fails to comply with an order issued under Subsection 31A-2-201 (4),
including a forfeiture order, the commissioner may file an action in any court of competent
jurisdiction or obtain a court order or judgment:
(a) enforcing the commissioner's order;
(b) directing compliance with the commissioner's order and restraining further violation of
the order, subjecting the person ordered to the procedures and sanctions available to the court for
punishing contempt if the failure to comply continues; or
(c) imposing a forfeiture in an amount the court considers just, up to $10,000 for each day
the failure to comply continues after the filing of the complaint until judgment is rendered.
(3) The Utah Rules of Civil Procedure govern actions brought under Subsection (2), except
that the commissioner may file a complaint seeking a court-ordered forfeiture under Subsection
(2)(c) no sooner than two weeks after giving written notice of his intention to proceed under
Subsection (2)(c). The commissioner's order issued under Subsection 31A-2-201 (4) may contain
a notice of intention to seek a court-ordered forfeiture if the commissioner's order is disobeyed.
(4) If, after a court order is issued under Subsection (2), the person fails to comply with the
commissioner's order or judgment, the commissioner may certify the fact of the failure to the court
by affidavit, and the court may, after a hearing following at least five days written notice to the
parties subject to the order or judgment, amend the order or judgment to add the forfeiture or
forfeitures, as prescribed in Subsection (2)(c), until the person complies.
(5) The proceeds of all forfeitures under this section, including collection expenses, shall be
paid into the General Fund. The expenses of collection shall be credited to the Insurance
Department's budget. The attorney general's budget shall be credited to the extent the Insurance
Department reimburses the attorney general's office for its collection expenses under this section.
(6) Forfeitures and judgments under this section bear interest at the rate then charged by the
United States Internal Revenue Service for past due taxes. Interest accrues from the later of the date
of entry of the commissioner's order under Subsection (1) or the date of judgment under Subsection
(2) until the forfeiture and accrued interest are fully paid.
(7) No forfeiture may be imposed under Subsection (2)(c) if, at the time the forfeiture action
is commenced, the person was in compliance with the commissioner's order, or if the violation of
the order occurred during the order's suspension.
(8) The commissioner may seek an injunction as an alternative to issuing an order under
Subsection 31A-2-201 (4).
(9) A person who intentionally violates, intentionally permits any person over whom he has
authority to violate, or intentionally aids any person in violating any insurance statute or rule of this
state or any effective order issued under Subsection 31A-2-201 (4) is guilty of a class B
misdemeanor. Unless a specific criminal penalty is provided elsewhere in this title, the person may
be fined not more than $10,000 if a corporation or not more than $5,000 if a person other than a
corporation. If the person is an individual, the person may, in addition, be imprisoned for up to one
year. As used in this subsection, "intentionally" has the same meaning as under Subsection
76-2-103 (1).
(10) When a licensee of the Insurance Department, other than a domestic insurer, persistently
or substantially violates the insurance law or violates an order of the commissioner under Subsection
31A-2-201 (4), if there are grounds for delinquency proceedings against the licensee under Section
31A-27-301 or Section 31A-27-307 , or if the licensee's methods and practices in the conduct of his
business endanger, or his financial resources are inadequate to safeguard, the legitimate interests of
his customers and the public, the commissioner may, after a hearing, in whole or in part, revoke,
suspend, place on probation, limit, or refuse to renew the licensee's license or certificate of authority.
Additional license termination or probation provisions for licensees other than insurers are set forth
in Sections 31A-19-303 , 31A-19-304 , 31A-23-216 , 31A-23-217 , 31A-25-208 , 31A-25-209 ,
31A-26-213 , [
(11) The enforcement penalties and procedures set forth in this section are not exclusive, but
are cumulative of other rights and remedies the commissioner has pursuant to applicable law.
Section 3. Section 31A-4-102 is amended to read:
31A-4-102. Qualified insurers.
[
person, through agents or brokers, or through the mail or any other method of communication,
except:
[
11, 13, or 14, within the limits of its certificate of authority;
[
[
[
certificate from the United States Department of Labor, or such other evidence as satisfies the
commissioner, that the laws of Utah are preempted with respect to specified activities of that person
by Section 514 of the Employee Retirement Income Security Act of 1974 or other federal law; or
[
31A-1-103 and all other applicable statutes.
(2) As used in this section, "insurer" includes a bail bond surety company, as defined in
Section 31A-35-102 .
Section 4. Section 31A-23-102 is amended to read:
31A-23-102. Definitions.
As used in this chapter:
(1) Except as provided in Subsection (3):
(a) "Escrow" is a license category that allows a person to conduct escrows, settlements, or
closings on behalf of a title insurance agency or a title insurer.
(b) "Insurance agent" or "agent" means a person who represents an insurer or insurers in
soliciting, negotiating, or placing insurance.
(c) "Insurance broker" or "broker" means a broker as defined in Subsection (5) or any other
person, firm, association, or corporation, that for any compensation, commission, or any other thing
of value acts or aids in any manner in soliciting, negotiating, or procuring the making of any
insurance contract on behalf of an insured other than himself or itself.
(d) "Limited license" means a license that is issued for a specific product of insurance and
limits an individual or agency to transact only for those products.
(e) "Search" is a license category that allows a person to issue title insurance commitments
or policies on behalf of a title insurer.
(f) "Title marketing representative" means a person who represents a title insurer in
soliciting, requesting, or negotiating the placing of title insurance or escrow, settlement, or closing
services and who does not have a search or escrow license.
(2) Except as provided in Subsection (3) and Subsection 31A-23-301 (1)(b), "insurance
consultant" or "consultant" means a person who advises other persons about insurance needs and
coverages, who is compensated by the person advised on a basis which is not directly related to the
insurance placed, and who is not compensated directly or indirectly by an insurer, agent, or broker
for the advice given.
(3) The following persons are not acting as agents, brokers, title marketing representatives,
or consultants when acting in the following capacities:
(a) any regular salaried officer, employee, or other representative of an insurer or licensee
under this chapter who devotes substantially all of his working time to activities other than those
described in Subsections (1), (2), and (3), including the clerical employees of persons required to be
licensed under this chapter;
(b) a regular salaried officer or employee of a person seeking to purchase insurance, who
receives no compensation that is directly dependent upon the amount of insurance coverage
purchased;
(c) a person who gives incidental advice in the normal course of a business or professional
activity, other than insurance consulting, if neither that person nor that person's employer receives
direct or indirect compensation on account of any insurance transaction that results from that advice;
(d) a person who, without special compensation, performs incidental services for another
at the other's request, without providing advice or technical or professional services of a kind
normally provided by an agent, broker, or consultant;
(e) (i) a holder of a group insurance policy, or any other person involved in mass marketing,
but only with respect to administrative activities in connection with that type of policy, including
the collection of premiums; and
(ii) only if the person receives no compensation for the activities described in Subsection
(3)(e)(i) beyond reasonable expenses including a fair payment for the use of capital; and
(f) a person who gives advice or assistance without direct or indirect compensation or any
expectation of direct or indirect compensation.
(4) "Actuary" means a person who is a member in good standing of the American Academy
of Actuaries.
(5) "Agency" means a person other than an individual, and includes a sole proprietorship by
which a natural person does business under an assumed name.
(6) "Bail bond agent" means any individual:
(a) appointed by an authorized bail bond surety insurer or appointed by a licensed bail bond
surety company to execute or countersign undertakings of bail in connection with judicial
proceedings; and
(b) who receives or is promised money or other things of value for this service.
[
corporation that for any compensation, commission, or other thing of value acts or aids in any
manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an
insured other than itself.
[
controlled by a broker.
[
insurer.
[
directly or indirectly has the power to direct or cause to be directed, the management, control, or
activities of a reinsurance intermediary.
[
similar persons are not insurers for purposes of Part 6 of this chapter:
(a) all risk retention groups as defined in the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499, and the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq., and Title
31A, Chapter 15, Part 2, Risk Retention Groups Act;
(b) all residual market pools and joint underwriting authorities or associations; and
(c) all captive insurers; for the purposes of this chapter, captive insurers are insurance
companies owned by another organization whose exclusive purpose is to insure risks of the parent
organization and affiliated companies or, in the case of groups and associations, insurance
organizations owned by the insureds whose exclusive purpose is to insure risks of member
organizations, group members, and their affiliates.
[
that manages all or part of the insurance business of an insurer, including the management of a
separate division, department, or underwriting office, and that acts as an agent for the insurer
whether it is known as a managing general agent, manager, or other similar term, and that, with or
without the authority, either separately or together with affiliates, directly or indirectly produces and
underwrites an amount of gross direct written premium equal to, or more than 5% of, the
policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year,
and that also either adjusts or pays claims in excess of an amount determined by the commissioner,
or that negotiates reinsurance on behalf of the insurer.
(b) Notwithstanding Subsection [
as managing general agent for the purposes of this chapter:
(i) an employee of the insurer;
(ii) a U.S. manager of the United States branch of an alien insurer; or
(iii) an underwriting manager which, pursuant to contract:
(A) manages all the insurance operations of the insurer;
(B) is under common control with the insurer;
(C) subject to Title 31A, Chapter 16, Insurance Holding Companies; and
(D) whose compensation is not based on the volume of premiums written; and
(c) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer
or inter-insurance exchange under powers of attorney.
[
and insurers.
[
(a) is organized or, in the case of a U.S. office of a foreign banking organization licensed,
under the laws of the United States or any state;
(b) is regulated, supervised, and examined by U.S. federal or state authorities having
regulatory authority over banks and trust companies; and
(c) has been determined by either the commissioner, or the Securities Valuation Office of
the National Association of Insurance Commissioners, to meet the standards of financial condition
and standing which are considered necessary and appropriate to regulate the quality of financial
institutions whose letters of credit will be acceptable to the commissioner.
[
reinsurance intermediary-manager as these terms are defined in Subsections [
(17).
[
employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or places
reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power
to bind reinsurance on behalf of the insurer.
[
corporation who has authority to bind or who manages all or part of the assumed reinsurance
business of a reinsurer, including the management of a separate division, department, or
underwriting office and who acts as an agent for the reinsurer whether he is known as a reinsurance
intermediary-manager, manager, or other similar term.
(b) Notwithstanding Subsection [
reinsurance intermediary-managers for the purpose of this chapter with respect to the reinsurer:
(i) an employee of the reinsurer;
(ii) a U.S. manager of the United States branch of an alien reinsurer;
(iii) an underwriting manager that, pursuant to contract, manages all the reinsurance
operations of the reinsurer, is under common control with the reinsurer, is subject to Title 31A,
Chapter 16, Insurance Holding Companies, and whose compensation is not based on the volume of
premiums written; and
(iv) the manager of a group, association, pool, or organization of insurers that:
(A) engage in joint underwriting or joint reinsurance; and
(B) are subject to examination by the insurance commissioner of the state in which the
manager's principal business office is located.
[
this state as an insurer with the authority to assume reinsurance.
[
to place insurance with unauthorized insurers in accordance with Section 31A-15-103 .
[
Section 5. Section 31A-23-204 is amended to read:
31A-23-204. License classifications.
Licenses issued under this chapter shall be issued under the classifications described under
Subsections (1) through (6). These classifications are intended to describe the matters to be
considered under any education, examination, and training required of license applicants under
Sections 31A-23-206 through 31A-23-208 .
(1) Agent and broker license classifications include:
(a) life insurance, including nonvariable annuities;
(b) variable annuities;
(c) disability insurance, including contracts issued to policyholders under Chapter 7 or 8;
(d) property/liability insurance, which includes:
(i) property insurance;
(ii) liability insurance;
(iii) surety and other bonds; and
(iv) policies containing any combination of these coverages; and
(e) title insurance under one of the following categories:
(i) search, including authority to act as a title marketing representative;
(ii) escrow, including authority to act as a title marketing representative;
(iii) search and escrow, including authority to act as a title marketing representative; and
(iv) title marketing representative only.
(2) Limited license product classification includes:
(a) credit life and credit disability insurance;
(b) travel; [
(c) motor club[
(d) bail bond agent.
(3) Consultant license classification includes:
(a) life insurance, including nonvariable annuities;
(b) variable annuities;
(c) disability insurance, including contracts issued to policyholders under Chapter 7 or 8;
and
(d) property/liability insurance, which includes:
(i) property insurance;
(ii) liability insurance;
(iii) surety and other bonds; and
(iv) policies containing any combination of these coverages.
(4) A holder of licenses under Subsections (1)(a) and (1)(c) has all qualifications necessary
to act as a holder of a license under Subsection (2)(a).
(5) Upon satisfying the additional applicable requirements, a holder of a brokers license may
obtain a license to act as a surplus lines broker. This type of license gives the holder the authority
to arrange insurance contracts with unauthorized insurers under Section 31A-15-103 , but only as to
the types of insurance under Subsection (1) for which he holds a brokers license.
(6) The commissioner may by rule recognize other agent, broker, limited license, or
consultant license classifications as to kinds of insurance not listed under Subsections (1), (2), and
(3).
Section 6. Section 31A-23-211.5 is enacted to read:
31A-23-211.5. Special requirements for bail bond agents and bail bond enforcement
agents.
(1) As used in this section, "bail bond agent" and "bail enforcement agent" have the same
definitions as in Section 31A-35-102 .
(2) A bail bond agent may not operate in this state without an appointment from one or more
authorized bail bond surety insurers or licensed bail bond surety companies.
(3) A bail bond enforcement agent may not operate in this state without an appointment from
one or more licensed bail bond agents.
Section 7. Section 31A-23-219 is amended to read:
31A-23-219. Appointment and listing of insurance agents.
(1) As used in this section, "insurer" includes bail bond surety companies as defined in
Section 31A-35-102 .
[
or managing general agent license to act as an insurance agent on its behalf prior to any agent doing
business for the insurer in this state.
(b) All insurers shall report to the commissioner, at intervals and in the form the
commissioner establishes by rule, all new appointments and all terminations of appointments.
(c) All insurers shall submit to the commissioner on or before July 1 of each odd-numbered
year a list of all agent appointments then in force in this state.
[
agent's appointment. The information provided to the commissioner shall remain confidential.
(b) An insurer is immune from civil action, civil penalty, or damages if the insurer complies
in good faith with Subsection [
agents' appointments. Notwithstanding any other provision in this section, an insurer is not immune
from any action or resulting penalty imposed on the reporting insurer as a result of proceedings
brought by or on behalf of the department if the action is based on evidence other than the report
submitted in compliance with Subsection [
[
or pay appointment reporting fees for natural person agents designated on the agency's agent's
license under Section 31A-23-212 .
[
department, and signed by the president and secretary of the insurer, a list of natural persons with
authority to appoint and remove the company's agents in this state. The insurer shall submit the
reports to the commissioner pursuant to Subsection [
[
(2), there is a rebuttable presumption that in placing a risk with the insurer the appointed licensee
or any of the licensee's licensed employees acted as the insurer's agent and not as a broker.
Section 8. Section 31A-23-305 is amended to read:
31A-23-305. Insurer liability.
(1) As used in this section, "insurer" includes bail bond surety companies as defined in
Section 31A-35-102 .
[
performed in this state that is within the scope of the agent's actual (express or implied) or apparent
authority, until the insurer has canceled the agent's appointment and has made reasonable efforts to
recover from the agent its policy forms and other indicia of agency. Reasonable efforts include a
formal demand in writing for return of the indicia, and notice to the commissioner if the agent does
not promptly comply with the demand. This Subsection (2) neither waives any common law defense
available to insurers, nor precludes the insured from seeking redress against the agent individually
or jointly against the insurer and agent.
[
insurer on a particular risk agrees to bind coverage on a particular risk, but fails to outwardly indicate
the insurer with which the risk is placed, and before the risk is placed with a particular insurer a loss
occurs, if there is no conclusive admissible evidence indicating the insurer with which the agent
exercised his binding authority, a court may equitably apportion the loss among all insurers with
which the agent had binding authority as to the particular type of risk.
Section 9. Section 31A-23-401 is amended to read:
31A-23-401. Compensation from insureds.
(1) As used in this section:
(a) "Commission compensation" includes funds paid to or credited for the benefit of an
agent or broker from:
(i) amounts deducted from insurance premiums on insurance sold by or placed through the
agent or broker; or
(ii) amounts received from an insurer, another agent, or a broker, acting in their professional
capacities, as a result of the sale or placement of insurance.
(b) "Noncommission compensation" includes all funds paid to or credited for the benefit of
an agent or broker other than commission compensation.
(2) (a) Except as provided in Subsection (3), no insurance agent or broker may receive, for
acting as an agent or broker, from an insured or from a person purchasing an insurance policy,
compensation other than commission compensation.
(b) As used in this section, "acting as an agent or broker" includes the negotiation or
procurement of any insurance contract made or negotiated in this state, and thereafter providing any
other services on account of that insurance contract, including the adjustment of claims arising from
that insurance contract.
(3) Subsection (2) does not apply to:
(a) a broker's receipt of noncommission compensation in connection with the actual sale or
placement of insurance, but only if the broker and the insured have agreed on the broker's
noncommission compensation, and the broker has disclosed to the insured the existence and source
of the commission compensation that accrues to the broker as a result of the transaction, which
agreement and disclosure shall be evidenced by:
(i) a written memorandum, signed by the broker and the insured, disclosing the existence
and source of commission compensation and providing that the insured will, in addition, pay the
noncommission compensation;
(ii) an application for insurance, signed by the insured, that specifies the amount of the
broker's noncommission compensation and discloses the existence and source of the commission
compensation; or
(iii) the insured's payment of an invoice from the broker for the noncommission
compensation, which invoice discloses the existence and source of the commission compensation
received by the broker with respect to the transaction;
(b) compensation received by an agent of a compensated corporate surety who under
procedures approved by a rule or order of the commissioner is paid by surety bond principal debtors
for extra services;
(c) compensation received by an insurance broker who is also licensed as a public adjuster
under Section 31A-26-203 , for services performed for an insured in connection with a claim
adjustment, so long as the broker does not receive or is not promised compensation for aiding in the
claim adjustment prior to the occurrence of the claim;
(d) compensation received by a consultant as a consulting fee, provided the consultant
complies with the requirements of Section 31A-23-301 ; or
(e) other compensation arrangements approved by the commissioner after a finding that they
do not violate Section 31A-23-301 and are not harmful to the public.
(4) This section does not alter the right of any agent or broker to recover from an insured the
amount of any premium due for insurance effected by or through that agent or broker or to charge
a reasonable rate of interest upon past-due accounts.
(5) This section does not apply to bail bond agents or bail enforcement agents as defined in
Section 31A-35-102 .
Section 10. Section 31A-23-404 is amended to read:
31A-23-404. Sharing commissions.
(1) (a) Except as provided in Subsection 31A-15-103 (3), a licensee under this chapter or an
insurer may only pay consideration or reimburse out-of-pocket expenses to a person if the licensee
knows that the person is licensed under this chapter to act as an agent or broker in Utah as to the
particular type of insurance.
(b) A person may only accept commission compensation or other compensation as an agent,
broker, or consultant that is directly or indirectly the result of any insurance transaction if that person
is licensed under this chapter to act as an agent or broker as to the particular type of insurance.
(2) (a) Except as provided in Section 31A-23-301 , a consultant may not pay or receive any
commission or other compensation that is directly or indirectly the result of any insurance
transaction.
(b) A consultant may share a consultant fee or other compensation received for consulting
services performed within Utah only with another consultant licensed under this chapter, and only
to the extent that the other consultant contributed to the services performed.
(3) This section does not prohibit the payment of renewal commissions to former licensees
under this chapter, former Title 31, Chapter 17, or their successors in interest under a deferred
compensation or agency sales agreement.
(4) In selling any policy of title insurance, no sharing of commissions under Subsection (1)
may occur if it will result in an unlawful rebate, or in compensation in connection with controlled
business, or in payment of a forwarding fee or finder's fee. A person may share compensation for
the issuance of a title insurance policy only to the extent that he contributed to the search and
examination of the title or other services connected with it.
(5) This section does not apply to bail bond agents or bail enforcement agents as defined in
Section 31A-35-102 .
Section 11. Section 31A-35-101 is enacted to read:
31A-35-101. Title.
This chapter is known as the "Bail Bond Surety Licensing Act."
Section 12. Section 31A-35-102 is enacted to read:
31A-35-102. Definitions.
As used in this chapter:
(1) "Bail bond" means a bond for a specified monetary amount which is:
(a) executed by a qualified certificate holder under this chapter; and
(b) 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.
(2) "Bail bond agent" means any individual:
(a) appointed by an authorized bail bond surety insurer or appointed by a licensed bail bond
surety company to execute or countersign undertakings of bail in connection with judicial
proceedings; and
(b) who receives or is promised money or other things of value for this service.
(3) "Bail bond surety" means a bail bond surety company or bail bond surety insurer
authorized by certificate under this chapter to issue bonds to secure:
(a) the release of a person from incarceration; and
(b) the appearance of that person at court hearings.
(4) "Bail enforcement agent" means an individual:
(a) who is employed or contracted with to enforce the terms and conditions of a defendant's
release on bail in a civil or criminal proceeding, to apprehend a defendant or surrender a defendant
to custody, or both, as is appropriate; and
(b) who receives or is promised monies or other things of value for these services.
(5) "Board" means the Bail Bond Surety Oversight Board created in Section 31A-35-201 .
(6) "Certificate" means a certificate of authority issued under this chapter to allow operation
as a bail bond surety.
(7) "Department" means the insurance department referred to under Title 31A, Chapter 2,
Part 1, The Insurance Department.
(8) "Indemnitor" means an entity or natural person who enters into an agreement with a
surety to hold the surety harmless from loss incurred as a result of executing a bond.
(9) "Insurance bail bond surety company" means any sole proprietor or entity who:
(a) is the agent of an authorized bail bond surety insurer which issues a bail bond in
connection with judicial proceedings; and
(b) receives or is promised money or other things of value for this service.
(10) "Letter of credit bail bond surety company" means any sole proprietor or entity who:
(a) pledges the assets of a letter of credit from a financial institution for a bail bond in
connection with judicial proceedings; and
(b) receives or is promised money or other things of value for this service.
(11) "Principal" means an individual or corporation whose performance is guaranteed by
bond.
(12) "Property bail bond surety company" means any sole proprietor or entity who:
(a) pledges personal or real property, or both, as security for a bail bond in connection with
judicial proceedings; and
(b) receives or is promised money or other things of value for this service.
Section 13. Section 31A-35-103 is enacted to read:
31A-35-103. Exemption from other sections of the Insurance Code.
Bail bond surety companies are exempted from:
(1) Title 31A, Chapter 3, Department Funding, Fees, and Taxes, except Section 31A-3-103 ;
(2) Title 31A, Chapter 4, Insurance in General, except Sections 31A-4-102 , 31A-4-103 ,
31A-4-104 , and 31A-4-107 ;
(3) Title 31A, Chapter 5, Domestic Stock and Mutual Insurance Corporations, except
Section 31A-5-103 , and
(4) Title 31A, Chapters 6, 6a, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 24, 25, 26,
27, 28, 29, 30, 31, 32, 33, and 34.
Section 14. Section 31A-35-104 is enacted to read:
31A-35-104. Rulemaking authority.
The insurance commissioner shall by rule establish specific certification guidelines and
standards of conduct for the business of bail bond surety insurance under this chapter.
Section 15. Section 31A-35-201 is enacted to read:
31A-35-201. Bail Bond Surety Oversight Board creation -- Membership.
(1) There is created a Bail Bond Surety Oversight Board within the insurance department,
consisting of the following seven members and one nonvoting member, to be appointed by the
insurance commissioner:
(a) one representative each from four licensed bail bond surety companies;
(b) two members of the general public who do not have any financial interest in or
professional affiliation with any bail bond surety company;
(c) one attorney in good standing licensed to practice law in Utah; and
(d) one staff member of the insurance department.
(2) (a) The appointments are for terms of four years. A board member may not serve more
than two consecutive terms.
(b) Except as required by Subsection (2)(c), the current members of the Bail Bond Surety
Licensing Board created under Section 77-20-11 shall serve the remainder of their terms as members
of the board. Upon expiration of their terms they are eligible for appointment to another term.
(c) The insurance commissioner shall, at the time of initial appointments, adjust the length
of terms to ensure that the terms of board members are staggered so approximately half of the board
is appointed every two years.
(3) Board members serve until:
(a) removed by the insurance commissioner;
(b) their resignation; or
(c) the expiration of their term and the appointment of a successor.
(4) When a vacancy occurs in the membership for any reason, the replacement shall be
appointed for the remainder of the unexpired term.
(5) The board shall annually elect one of its members as chair.
(6) Four members constitute a quorum for the transaction of business.
(7) (a) Members do not receive compensation or benefits for their services, but may receive
per diem and expenses incurred in the performance of official duties at the rates established by the
Division of Finance under Sections 63A-3-106 and 63A-3-107 .
(b) Members may decline to receive per diem and expenses for their services.
Section 16. Section 31A-35-202 is enacted to read:
31A-35-202. Board responsibilities.
The board shall:
(1) meet at least quarterly, and also at the call of the chair;
(2) make written recommendations to the insurance commissioner for rules governing the
following aspects of the bail bond surety insurance business:
(a) certification qualifications, applications, and fees;
(b) bonding limits;
(c) unprofessional conduct;
(d) procedures for hearing and resolving allegations of unprofessional conduct; and
(e) sanctions for unprofessional conduct;
(3) screen bail bond surety company certificate applicants and applications;
(4) recommend to the insurance commissioner action regarding the granting, renewing,
suspending, revoking, and reinstating of bail bond surety company certificates;
(5) (a) conduct investigations of allegations of unprofessional conduct on the part of persons
or sureties involved in the business of bail bond surety insurance; and
(b) provide the results of the investigations to the insurance commissioner with
recommendations for action and any appropriate sanctions; and
(6) maintain and publish a current list of licensed bail bond surety companies.
Section 17. Section 31A-35-301 is enacted to read:
31A-35-301. The insurance commissioner's authority.
(1) The insurance commissioner shall:
(a) make rules as necessary for the administration of this chapter;
(b) with information as provided by the board, issue or deny certification under this chapter;
and
(c) take action regarding a certificate, including suspension or revocation.
(2) The insurance commissioner may establish fees for the issuance, renewal, and
reinstatement of bail bond surety company certificates of authority under Section 63-38-3.2 .
Section 18. Section 31A-35-401 is enacted to read:
31A-35-401. Application for certificate of authority -- Process -- Fees.
(1) (a) A person may not engage in the bail bond surety insurance business without applying
for and receiving a certificate of authority issued under this chapter.
(b) Bail bond surety insurers are granted certificates in the same manner as other insurers
doing business in this state under this title.
(c) Bail bond surety companies are granted certificates under this chapter and in accordance
with rules made by the insurance commissioner.
(2) An applicant for a certificate under this chapter shall submit to the insurance
commissioner:
(a) a completed application form as prescribed by the insurance commissioner;
(b) a fee as determined by the insurance commissioner under Section 63-38-3.2 ; and
(c) any additional information required by rule.
(3) Fees required under this section are not refundable.
(4) Fees collected under this section shall be deposited in a restricted account created in
Section 31A-35-407 .
Section 19. Section 31A-35-402 is enacted to read:
31A-35-402. Certificate -- Authority.
(1) A bail bond surety insurance business holding a certificate issued under this chapter or
Title 31A, Chapter 5, Domestic Stock and Mutual Insurance Corporations, or Title 31A, Chapter 14,
Foreign Insurers, may only issue bonds as a bail bond surety.
(2) A certificate issued under this chapter shall be in a form prescribed by the commissioner
and shall state:
(a) the name, address, and telephone number of the licensee;
(b) the date of the license issuance and expiration; and
(c) any other information the commissioner considers necessary.
(3) A bail bond agent may not execute or issue a bail bond in this state without holding a
current appointment from a bail bond surety.
(4) A bail bond surety company may not allow any person who does not hold a license under
Title 31A, Insurance Code, to solicit or engage in the bail bond surety business on the company's
behalf, except for individuals:
(a) employed solely for the performance of clerical, stenographic, investigative, or other
administrative duties which do not require a license under this chapter; and
(b) whose compensation is not related to or contingent upon the number of bonds written.
Section 20. Section 31A-35-403 is enacted to read:
31A-35-403. Exemptions to licensing requirements.
This chapter does not affect the negotiation through a licensed broker or agent for, or the
execution or delivery of, an undertaking of bail executed by an insurer for its insured under a policy
of automobile insurance or of liability insurance upon the automobile of the insured.
Section 21. Section 31A-35-404 is enacted to read:
31A-35-404. Minimum financial requirements for certificate of authority.
(1) A letter of credit bail bond surety company shall maintain an irrevocable letter of credit
with a minimum face value of $250,000 assigned to the state from a Utah financial institution.
(2) A property bail bond surety company shall maintain:
(a) a current financial statement reviewed by a certified public accountant, showing a net
worth of at least $250,000, at least $50,000 of which is liquid assets;
(b) a copy of the applicant's federal income tax return for the preceding two years; and
(c) for each parcel of real property owned by the applicant, a title letter and an appraisal
dated not more than two years prior to the date of application.
(3) An insurance bail bond surety company shall maintain a qualifying power of attorney
issued by the applicant's insurer. The insurer shall be:
(a) in good standing in its state of domicile; and
(b) authorized to write bail bonds in Utah.
(4) The commissioner may revoke the license of a bail bond surety company that fails to
maintain the minimum financial requirements required under this section.
Section 22. Section 31A-35-405 is enacted to read:
31A-35-405. Issuance of certificate of authority -- Denial, right of appeal.
(1) Upon a determination by the board that the applicant has met the requirements for
issuance of a certificate of authority under this chapter, the insurance commissioner shall issue to
the applicant a license in the form of a certificate of authority.
(2) If the insurance commissioner denies an application for a certificate under this chapter,
he shall provide prompt written notification to the applicant, stating the grounds for denial.
(3) (a) The notification of denial shall inform the applicant that he is entitled to a hearing if
he wants to contest the denial, and that he must submit the request in writing to the commissioner
within 30 days after the issuance of the denial.
(b) The hearing shall be scheduled not later than 60 days after the commissioner's receipt
of the request.
(c) The department shall hear the appeal, and may:
(i) return the case to the insurance commissioner for reconsideration;
(ii) modify the commissioner's decision; or
(iii) reverse the commissioner's decision.
(4) Decisions are subject to review under Title 63, Chapter 46b, Administrative Procedures
Act.
Section 23. Section 31A-35-406 is enacted to read:
31A-35-406. Certificate renewal and reinstatement.
(1) (a) A certificate of authority may be renewed upon completion and submission of the
renewal application and payment of the applicable renewal fee established under Section 63-38-3.2
to the department on or before the last day of the month in which the certificate of authority expires.
(b) Renewal is due on an annual basis as established by department rule, regardless of when
the certificate is issued.
(2) A certificate of authority not renewed under Subsection (1) may be renewed within 30
days after the expiration date, upon payment of a late renewal fee established under Section
63-38-3.2 .
(3) A lapsed certificate of authority may be reinstated between 31 days and six months
following the expiration of the certificate under Subsection (1) by:
(a) submission of the renewal form; and
(b) payment of a certificate reinstatement fee established under Section 63-38-3.2 .
(4) If a certificate expired more than six months ago, the applicant for reinstatement shall
submit an application form to the commissioner and pay the application fee established under
Section 63-38-3.2 .
(5) If a certificate was suspended, the applicant may not submit an application for a
certificate until the after the end of the period of suspension.
(6) Fees collected under this section shall be deposited in the restricted account created in
Section 31A-35-407 .
Section 24. Section 31A-35-407 is enacted to read:
31A-35-407. Restricted account.
(1) There is created within the General Fund a restricted account known as the "Bail Bond
Surety Administration Account."
(2) (a) The account shall be funded from the fees imposed under this chapter.
(b) The department shall deposit all fees collected under this part in the account.
(c) The funds in the account shall be used by the department to administer this chapter.
(d) The account shall earn interest, which shall be deposited in the account.
Section 25. Section 31A-35-501 is enacted to read:
31A-35-501. Emergency action regarding a certificate.
(1) If the insurance commissioner determines, based on an investigation, that the public
health, safety, or welfare requires emergency action, the commissioner may order a summary
suspension of a certificate pending proceedings for revocation or other action.
(2) The order shall state:
(a) the grounds upon which the summary suspension is issued, including the charges made
against the holder of the certificate; and
(b) shall advise the certificate holder of the right to an administrative hearing before the
commissioner within 60 days after the summary suspension is ordered.
Section 26. Section 31A-35-502 is enacted to read:
31A-35-502. Notification of violation of chapter.
If the commissioner has reason to believe a certificate holder has violated this chapter,
written notice shall be sent to the certificate holder, advising him of:
(1) the alleged violation;
(2) the commissioner's authority to take action against the certificate; and
(3) the certificate holder's right to an administrative hearing under Title 63, Chapter 46b,
Administrative Procedures Act, and the period of time within which the hearing must be requested.
Section 27. Section 31A-35-503 is enacted to read:
31A-35-503. Disciplinary action -- Hearing -- Appeal.
(1) Based on information the commissioner receives during a hearing regarding a certificate,
the commissioner may:
(a) dismiss the complaint if the commissioner finds it is without merit;
(b) fix a period and terms of probation best adopted to educate the certificate holder;
(c) place the certificate on suspension for a period of not more than 12 months; or
(d) revoke the certificate.
(2) The commissioner shall advise the certificate holder:
(a) of his findings based on the hearing promptly and in writing; and
(b) of the certificate holder's rights of appeal under this chapter.
(3) If a bail bond surety company license is suspended or revoked under this chapter, no
member or employee of that company, or officer or director of that corporation may receive a
certificate under this chapter or be designated in any certificate to exercise authority under this
chapter during the period of the suspension or revocation, unless the insurance commissioner
determines upon substantial evidence that the member, employee, officer, or director was not
personally at fault and did not acquiesce in the matter on account of which the certificate was
suspended or revoked.
Section 28. Section 31A-35-601 is enacted to read:
31A-35-601. Acts of agent.
(1) As used in this section;
(a) "Bail recovery agent" means an individual employed by a bail enforcement agent to assist
the bail enforcement agent regarding civil or criminal defendants released on bail by:
(i) presenting a defendant for required court appearances;
(ii) apprehending or surrendering a defendant to a court; or
(iii) keeping the defendant under necessary surveillance.
(b) "Bail recovery apprentice" means an individual who:
(i) is employed by a bail enforcement agent; and
(ii) works under the direct supervision of that bail enforcement agent or under the direct
supervision of a bail recovery agent employed also by the bail enforcement agent, unless the bail
recovery apprentice is conducting activities at the direction of the employing bail enforcement agent
that do not require direct supervision.
(2) The acts or conduct of any bail bond agent or bail enforcement agent, bail recovery
agent, or bail recovery apprentice who acts within the scope of the authority delegated to him by the
bail bond surety, are considered to be the acts or conduct of the bail bond surety for which the bail
bond agent or bail bond enforcement agent, bail recovery agent, or bail recovery apprentice is acting
as agent.
(3) The acts or conduct of any bail bond agent or bail enforcement agent, bail recovery
agent, or bail recovery apprentice who acts within the scope of the authority delegated to him by the
bail bond agent are considered to be the acts or conduct of the bail bond agent for which the bail
enforcement agent is acting as agent.
Section 29. Section 31A-35-602 is enacted to read:
31A-35-602. Place of business -- Records to be kept there.
(1) (a) Every bail bond surety company shall have and maintain in this state a place of
business accessible to the public, and where the certificate holder principally conducts transactions
authorized by the certificate.
(b) The address of this location shall appear upon the application for a certificate and upon
the certificate issued under this chapter. The certificate holder shall notify the insurance
commissioner of any change in this address within 20 days after the change.
(c) This section does not prohibit the certificate holder from maintaining the place of
business required under this section in the certificate holder's residence, if it is in Utah.
(2) The bail bond surety company shall keep at its place of business the records required
under Section 31A-35-604 .
Section 30. Section 31A-35-603 is enacted to read:
31A-35-603. Collateral security.
(1) A bail bond agent may accept collateral security in connection with a bail transaction,
if the collateral security is reasonable in relation to the face amount of the bond.
(2) The collateral security must be received by the bail bond agent in his fiduciary capacity.
Before any forfeiture of bail the bail bond agent shall keep the collateral separate and apart from any
other funds or assets of the licensee.
(3) (a) Any collateral that is deposited with a bail bond agent or bail bond surety company
shall be returned to the person who deposited it within ten days after the return is requested by the
person who deposited it, if the bond has been exonerated and all fees owed to the bail bond agent
or bail bond surety have been paid.
(b) A certified copy of the minute order from the court, stating the bail or undertaking was
ordered exonerated is prima facie evidence of exoneration or termination of liability.
(4) If a bail bond agent accepts collateral, he shall give a written receipt for the collateral.
This receipt must include a fully detailed account of the collateral received.
(5) Upon return of collateral to the person who posted it, if any amount has been deducted
by the bail bond surety or bail bond agent as expense, the bail bond surety or bail bond agent shall
include with the returned collateral an itemized statement of all expenses deducted from the
collateral, and shall maintain a copy of the statement in his records.
(6) If the bond secured by the collateral is forfeited and the bail bond agent or bail bond
surety company retains possession of the collateral in payment of the forfeiture or otherwise disposes
of the collateral, the party retaining possession or disposing of the property shall maintain a written
record of the collateral, including any disposition.
(7) (a) If a document which conveys title to real property is used as collateral in a bail bond
transaction, the document shall state on its face that it is executed as part of a security transaction.
(b) If the document is recorded, the bail bond agent or the bail bond surety company shall:
(i) execute a reconveyance of the property, executed so that the reconveyance can be
recorded; and
(ii) promptly deliver the reconveyance document to the person executing the original
conveyance, or to his heirs, legal representative, or successor in interest.
Section 31. Section 31A-35-604 is enacted to read:
31A-35-604. Records -- Maintenance -- Guarantors' records.
(1) Every bail bond agent shall maintain at his place of business:
(a) records of all bail bonds he has executed or countersigned, so the public may obtain all
necessary information concerning those bail bonds for at least one year after the liability of the
surety has been terminated; and
(b) any additional information the insurance commissioner may reasonably require by rule.
(2) Records under Subsection (1) shall be available for examination by the commissioner
or his representatives during regular business hours.
(3) The bail bond surety company shall maintain for three years after receipt all records
forwarded to it by its bail bond agents.
Section 32. Section 31A-35-605 is enacted to read:
31A-35-605. Guarantors -- Agreement and enforcement.
(1) All agreements of persons to act as guarantor for a bail bond shall be in writing or
reduced to writing as soon as possible after completion.
(2) When a person executes an agreement to act as a guarantor, the bail bond surety company
or the bail bond agent shall deliver to that person a copy of the agreement promptly upon that
person's execution of the agreement.
(3) A bail bond agent may not enforce any guarantor agreement without disclosing to the
guarantor all collateral held by the bail bond agent indemnifying the bond to which the agreement
relates, and the identity of each other guarantor.
Section 33. Section 31A-35-606 is enacted to read:
31A-35-606. Bail agreement prior to commission of offense prohibited.
A bail bond surety or bail bond agent may not enter into an agreement or arrangement with
any person, guaranteeing or assuring in advance of the commission of any offense that bail will be
furnished to that person or any other party if arrested.
Section 34. Section 31A-35-607 is enacted to read:
31A-35-607. Filing of forms.
(1) In accordance with Section 31A-21-201 , each certificate holder shall file with the
insurance commissioner a sample copy of each form the certificate holder uses in his bail bond
surety business.
(2) These forms shall be filed:
(a) within 30 days of the effective date of this chapter; and
(b) when any form under Subsection (1) is changed or put into use.
(3) (a) The department shall maintain and make available for public inspection a file
regarding each bail bond surety.
(b) The forms required under this section shall be maintained in the submitting bail bond
surety's file.
Section 35. Section 31A-35-608 is enacted to read:
31A-35-608. Premiums and authorized charges.
(1) A bail bond surety or bail bond agent may not, in any bail transaction or in connection
with that transaction, directly or indirectly, charge or collect money or other valuable consideration
from any person except to:
(a) pay the premium on the bail at the rates established by the bail bond surety company;
(b) provide collateral;
(c) reimburse himself for actual expenses, as described in Subsection (2), incurred in
connection with the bail bond transaction; or
(d) to reimburse himself, or to establish a right of action against the principal or any
indemnitor, for actual expenses the bail bond surety or bail bond agent incurred in good faith and
which were by reason of breach by the defendant of any of the terms of the written agreement under
which the undertaking of bail or bail bond was written.
(2) (a) If a bail bond agent did not establish a written agreement, or there is only an
incomplete writing, the bail bond surety may bring an action in a court of law to enforce its equitable
rights against the principal and his indemnitors in exoneration.
(b) Reimbursement claimed under this Subsection (2) may not exceed the principal sum of
the bond or undertaking, plus any reasonable expenses that are verified by receipt and in total do not
amount to more than the principal sum of the bond or undertaking, incurred in good faith by the bail
bond surety, its agents, and employees by reason of the principal's breach.
(3) This section does not affect or impede the right of a bail bond agent to execute
undertaking of bail on behalf of a nonresident agent of the surety he represents.
Section 36. Section 31A-35-701 is enacted to read:
31A-35-701. Prohibited acts.
(1) A bail bond agent or bail bond surety may not:
(a) solicit business in or about any place where persons in the custody of the state or any
local law enforcement or correctional agency are confined, or in or about any court;
(b) pay a fee or rebate or give or promise anything of value to any person in order to secure
a settlement, compromise, remission, or reduction of the amount of any undertaking or bail bond;
(c) pay a fee or rebate or give anything of value to an attorney in regard to any bail bond
matter, except payment for legal services actually rendered for the bail bond agent or bail bond
surety; or
(d) pay a fee or rebate or give or promise anything of value to the principal or anyone in his
behalf.
(2) The following persons may not act as bail bond agents and may not, directly or
indirectly, receive any benefits from the execution of any bail bond:
(a) any person employed at any jail, correctional facility, or other facility used for the
incarceration of persons;
(b) law enforcement officers;
(c) judges;
(d) sheriffs, deputy sheriffs, and constables; and
(e) trustees or prisoners incarcerated in any jail, correctional facility, or other facility used
for the incarceration of persons.
(3) A bail bond agent may not sign or countersign in blank any bail bond, or give the power
of attorney to, or otherwise authorize, anyone to countersign his name to bonds.
(4) A bail bond agent may not advertise or hold himself out to be a bail bond surety.
Section 37. Section 31A-35-702 is enacted to read:
31A-35-702. Early surrender without cause.
(1) If a bail bond agent without good cause surrenders a defendant to custody before the time
specified in the undertaking of bail or the bail bond for the appearance of the defendant, or before
any other occasion where the presence of the defendant in court is lawfully required, the bail or bail
bond premium shall be returned in full.
(2) As used in this section, "good cause" includes:
(a) information received from a source credible under the circumstances that the defendant
intends to fail to appear before the appropriate court at the date and time prescribed;
(b) the defendant providing materially false information on the application for bail or a bail
bond;
(c) the court's increasing the amount of bail beyond sound underwriting criteria employed
by the bail bond agent or bail bond surety;
(d) a material and detrimental change in the collateral posted by the defendant or one acting
on his behalf;
(e) the defendant changing his address or telephone number without giving reasonable notice
to the bail bond agent or bail bond surety;
(f) the defendant commits another crime, other than a minor traffic violation, as defined by
department rule, while on bail;
(g) failure by the defendant to appear in court at the appointed time; or
(h) a finding of guilt against the defendant by a court of competent jurisdiction.
Section 38. Section 31A-35-703 is enacted to read:
31A-35-703. Disciplinary action.
(1) Persons or organizations found to be in violation of the statutes or rules governing the
conduct of bail bond agents and bail bond sureties under this chapter are subject to disciplinary
action by the insurance commissioner against the certificate, and imposition of civil penalties, as
authorized under Title 31A, Chapter 2, Administration of the Insurance Laws.
(2) Penalties collected under this section shall be deposited in the restricted account created
in Section 31A-35-407 .
Section 39. Section 31A-35-704 is enacted to read:
31A-35-704. Submission of bail bond surety insurers, companies, and agents to
jurisdiction of court.
By applying for and receiving certification under this chapter, bail bond surety insurers,
companies, and agents:
(1) submit to the jurisdiction of the court;
(2) irrevocably appoint the clerk of the court as agent upon whom any papers affecting the
bail bond surety insurer, company, or agent's liability on the undertaking may be served; and
(3) acknowledge that liability may be enforced on motion and upon notice as the court may
require, without the necessity of an independent action.
Section 40. Section 77-20-1 is amended to read:
77-20-1. Right to bail -- Denial of bail -- Hearing.
(1) A person charged with or arrested for a criminal offense shall be admitted to bail as a
matter of right, except if the person is charged with a:
(a) capital offense, when the court finds there is substantial evidence to support the charge;
(b) felony committed while on probation or parole, or while free on bail awaiting trial on a
previous felony charge, when the court finds there is substantial evidence to support the current
felony charge; [
(c) felony when there is substantial evidence to support the charge and the court finds by
clear and convincing evidence that the person would constitute a substantial danger to any other
person or to the community, or is likely to flee the jurisdiction of the court, if released on bail[
(d) felony when the court finds there is substantial evidence to support the charge and it finds
by clear and convincing evidence that the person violated a material condition of release while
previously on bail.
(2) Any person who may be admitted to bail may [
recognizance or [
for future court proceedings in the case, and on any other conditions imposed in the discretion of the
magistrate or court[
(a) ensure the appearance of the accused;
(b) ensure the integrity of the court process;
(c) prevent direct or indirect contact with witnesses or victims by the accused, if appropriate;
and
(d) ensure the safety of the public.
(3) The initial order denying or fixing the amount of bail shall be issued by the magistrate
or court issuing the warrant of arrest or by the magistrate or court presiding over the accused's first
judicial appearance. The magistrate or court may rely upon information contained in:
(a) the indictment or information;
(b) any sworn probable cause statement;
(c) information provided by any pretrial services agency; or
(d) any other reliable record or source.
(4) A motion to modify the initial order may be made by a party at any time upon notice to
the opposing party sufficient to permit the opposing party to prepare for hearing and to permit any
victim to be notified and be present. Hearing on a motion to modify may be held in conjunction with
a preliminary hearing or any other pretrial hearing. The magistrate or court may rely on information
as provided in Subsections (3)(a) through (d) and may base its ruling on evidence provided at the
hearing so long as each party is provided an opportunity to present additional evidence or
information relevant to bail.
(5) Subsequent motions to modify bail orders may be made only upon a showing that there
has been a material change in circumstances.
(6) An appeal may be taken from an order of any court denying bail to the Supreme Court,
which shall review the determination under Subsection (1).
Section 41. Section 77-20-3 is amended to read:
77-20-3. Release on own recognizance -- Changing amount of bail or conditions of
release.
(1) Any person who may be admitted to bail may likewise be released on his own
recognizance in the discretion of the magistrate or court.
(2) After releasing the defendant on his own recognizance or admitting the defendant to bail,
the magistrate or court may[
(a) impose bail or increase or decrease the amount of the bail[
(b) impose or change the conditions of release under Subsection 77-20-1 (2).
Section 42. Section 77-20-4 is amended to read:
77-20-4. Bail posted in cash or written undertaking.
(1) Bail may be posted in cash or written undertaking with or without sureties at the
discretion of the magistrate. Written undertaking shall substantially conform to any form approved
by the supreme court.
(2) A bail bond may not be accepted without receiving in writing at the time the bail is
posted the current mailing address and telephone number of the surety.
Section 43. Section 77-20-5 is amended to read:
77-20-5. Qualifications of sureties -- Justification -- Requirements of undertaking.
(1) The sureties on written undertakings shall be real or personal property holders within the
state. The qualifications and bonding limits of bail bond sureties who are engaged in the for-profit,
commercial business of posting property bonds shall be established by the Bail Bond Surety
[
All other sureties shall collectively have a net worth of at least twice the amount of the undertaking,
exclusive of property exempt from execution.
(2) Each surety shall justify by affidavit upon the undertaking and each may be further
examined upon oath by the magistrate or by the prosecuting attorney in the presence of a magistrate,
in respect to his property and net worth.
(3) The undertaking shall, in addition to other requirements, provide that each surety submits
himself to the jurisdiction of the court and irrevocably appoints the clerk of the court as his agent
upon whom any papers affecting his liability on the undertaking may be served, and that his liability
may be enforced on motion and upon such notice as the court may require without the necessity of
an independent action.
Section 44. Section 77-20-7 is amended to read:
77-20-7. Duration of liability on undertaking -- Notices to sureties -- Exoneration if
charges not filed.
(1) The principal and the sureties on the written undertaking are liable thereon during all
proceedings and for all appearances required of the defendant up to and including the surrender of
the defendant in execution of any sentence imposed irrespective of any contrary provision in the
undertaking.
(2) Notice of any required appearance by the defendant may be given by the court to the
sureties who shall thereupon cause the defendant's appearance as required. Any failure of the
defendant to appear when required is a breach of the conditions of the undertaking or bail and
subjects it to forfeiture irrespective of whether or not notice was given to the sureties.
(3) If no information or indictment charging a person with an offense is filed in court within
120 days after the date of the bail undertaking or cash receipt, the court may relieve a person from
conditions of release at the person's request, and the bond or undertaking is exonerated without
further order of the court unless the prosecutor requests an extension of time before the end of the
120-day period by:
(a) filing a notice for extension with the court; and
(b) serving the notice for extension upon the sureties and the person or his attorney.
(4) A court may extend bail and conditions of release for good cause.
(5) Subsection (3) does not prohibit the filing of charges against a person at any time.
Section 45. Section 77-20b-101 is enacted to read:
77-20b-101. Entry of nonappearance -- Notice to surety -- Release of surety on failure
of timely notice.
(1) If a defendant who has posted bail fails to appear before the appropriate court when
required and the court issues a bench warrant or directs that the surety be given notice of the
nonappearance, the clerk of the court shall:
(a) mail notice of nonappearance by certified mail, return receipt requested, within 30 days
to the address of the surety who posted the bond; and
(b) deliver a copy of the notice sent under Subsection (1)(a) to the prosecutor's office at the
same time notice is sent under Subsection (1)(a).
(2) If notice is not provided in accordance with Subsection (1)(a), the prosecutor may mail
notice of nonappearance by certified mail, return receipt requested, to the address of the surety
within seven days after the end of the 30-day period under Subsection (1)(a).
(3) If notice of nonappearance is not mailed to a surety, other than the defendant, in
accordance with Subsection (1) or (2), the surety is relieved of further obligation under the bond if:
(a) the surety's current name and address are on the bail bond in the court's file; and
(b) the surety does not otherwise have actual notice of the defendant's failure to appear.
Section 46. Section 77-20b-102 is enacted to read:
77-20b-102. Time for bringing defendant to court.
(1) If notice of nonappearance has been mailed to a surety under Section 77-20b-101 , the
surety may bring the defendant before the court within six months of the date of nonappearance,
during which time a forfeiture action on the bond may not be brought.
(2) A surety may request an extension of the six-month time period in Subsection (1), if the
surety within that time:
(a) files a motion for extension with the court; and
(b) mails the motion for extension and a notice of hearing on the motion to the prosecutor.
(3) The court may extend the six-month time in Subsection (1) for not more than 60 days,
if the surety has complied with Subsection (2) and the court finds good cause.
Section 47. Section 77-20b-103 is enacted to read:
77-20b-103. Defendant in custody -- Notice to prosecutor.
(1) If a surety is unable to bring a defendant to the court because the defendant is and will
be in the custody of authorities of another jurisdiction for the duration of the six-month period under
Section 77-20b-102 , the surety shall notify the court and the prosecutor and provide the name,
address, and telephone number of the custodial authority.
(2) If the defendant is subject to extradition or other means by which the state can return the
defendant to the court's custody, and the surety gives notice under Subsection (1), the surety's bond
shall be exonerated to the extent the bond exceeds the reasonable, actual, or estimated costs to
extradite and return the defendant to the court's custody, upon the occurrence of the earlier of:
(a) the prosecuting attorney's lodging a detainer on the defendant; or
(b) 60 days after the surety gives notice to the prosecutor under Subsection (1), if the
defendant remains in custody of the same authority during that 60-day period.
Section 48. Section 77-20b-104 is enacted to read:
77-20b-104. Forfeiture of bail.
(1) If a surety fails to bring the defendant before the court within the time provided in
Section 77-20b-102 , the prosecuting attorney may request the forfeiture of the bail by:
(a) filing a motion for bail forfeiture with the court, supported by proof of notice to the
surety of the defendant's nonappearance; and
(b) mailing a copy of the motion to the surety.
(2) A court shall enter judgment of bail forfeiture without further notice if it finds by a
preponderance of the evidence:
(a) the defendant failed to appear as required;
(b) the surety was given notice of the defendant's nonappearance in accordance with Section
77-20b-101 ;
(c) the surety failed to bring the defendant to the court within the six-month period under
Section 77-20b-102 ; and
(d) the prosecutor has complied with the notice requirements under Subsection (1).
(3) If the surety shows by a preponderance of the evidence that it has failed to bring the
defendant before the court because the defendant is deceased through no act of the surety, the court
may not enter judgment of bail forfeiture.
(4) The amount of bail forfeited is the face amount of the bail bond, but if the defendant is
in the custody of another jurisdiction and the state extradites or intends to extradite the defendant,
the court may reduce the amount forfeited to the actual or estimated costs of returning the defendant
to the court's jurisdiction. A judgment under this Subsection (4) shall:
(a) identify the surety against whom judgment is granted;
(b) specify the amount of bail forfeited;
(c) grant the forfeited bail to the prosecuting entity; and
(d) be docketed by the clerk of the court in the civil judgment docket.
(5) A prosecutor may immediately commence collection proceedings to execute a judgment
of bond forfeiture against the property of the surety.
Section 49. Repealer.
This act repeals:
Section 77-20-11, Bail Bond Surety Licensing Board -- Establishment -- Appointment
of members -- Terms -- Fees.
Section 77-20-12, Bail Bond Surety Licensing Board -- Duties.
Section 77-20-13, Judicial Council -- Rulemaking authority.
Section 77-20a-1, Entry in minutes as forfeiture -- Notice -- Release of surety on failure
of notice.
Section 77-20a-2, Judgment on bail -- Execution.
Section 77-20a-3, Setting aside forfeiture or judgment -- Grounds -- Time for
application.
Section 77-20a-4, Defendant detained by other authority -- Procedure -- Costs of
returning defendant.
Section 77-20a-5, Liquidated costs of returning defendant -- Judgment against surety
-- Execution.
Section 77-20a-6, Execution of judgment.
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