THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY STACK, ALLOWAY, ROBBINS, SCHWANK, WOZNIAK AND FERLO, SEPTEMBER 5, 2012

REFERRED TO BANKING AND INSURANCE, SEPTEMBER 5, 2012  

AN ACT

Amending Title 42 (Judiciary and Judicial Procedure) of the

Pennsylvania Consolidated Statutes, in bonds and

recognizances, amending provisions relating to professional

bondsmen; and providing for a private cause of action.

The General Assembly finds as follows:

(1)  The bail bondsmen industry in this Commonwealth is

in need of legal reform.

(2)  Some bail bondsmen are issuing bonds without

collecting sufficient collateral and are giving money

directly to alleged criminals.

(3)  Other bail bondsmen are issuing bonds to risky

defendants in order to turn a profit and not to protect the

community at large.

(4)  As a result, defendants who post bond through bail

bondsmen are likely to jump bail and not to appear at their

mandatory court dates.

(5)  The bail bondsmen industry in this Commonwealth

should be uniformly regulated in a manner that is similar to

the process for licensing insurers.

(6)  The process should be funded solely on licensing

fees so that the regulation of the bail bondsmen industry is

self-sustaining and revenue-neutral to the Commonwealth.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Subchapter B heading of Chapter 57 of Title 42 of

the Pennsylvania Consolidated Statutes is amended to read:

SUBCHAPTER B

[PROFESSIONAL] BAIL BONDSMEN

Section 2.  Sections 5741, 5742, 5743, 5744, 5745, 5746,

5747, 5748 and 5749(a) of Title 42 are amended to read:

§ 5741.  Definitions.

The following words and phrases when used in this subchapter

shall have, unless the context clearly indicates otherwise, the

meanings given to them in this section:

"Bail bondsman."  A person or entity that is authorized to

execute bail bonds or to solicit business on its behalf and

that:

(1)  Either:

(i)  engages in the business of giving bail, giving

or soliciting undertakings, or giving or soliciting

indemnity or counterindemnity to sureties on

undertakings; or

(ii)  within a period of 30 days has become a surety,

or has indemnified a surety, for the release on bail of a

person, with or without a fee or compensation, or promise

thereof, in three or more matters not arising out of the

same transaction.

(2)  Is licensed as a corporate surety bail bondsman or

self-insured bail bondsman as provided in this chapter.

"Corporate surety bail bondsman."  A person licensed by the

Insurance Department to provide bail bonds to the general public

and authorized by a corporate surety insurer to execute bail

bonds as attorney-in-fact for the corporate surety insurer.

"Department."  The Insurance Department of the Commonwealth.

"Office of the clerk."  The office of the clerk of the court

of common pleas of each judicial district in which a

[professional] bail bondsman engages in the business of a

[professional] bail bondsman.

["Professional bondsman."  Any person, other than a fidelity

or surety company or any of its officers, agents, attorneys, or

employees, authorized to execute bail bonds or to solicit

business on its behalf, who:

(1)  engages in the business of giving bail, giving or

soliciting undertakings, or giving or soliciting indemnity or

counterindemnity to sureties on undertakings; or

(2)  within a period of 30 days has become a surety, or

has indemnified a surety, for the release on bail of a

person, with or without a fee or compensation, or promise

thereof, in three or more matters not arising out of the same

transaction.]

"Self-insured bail bondsman."  A person licensed by the

Insurance Department to provide bail bonds to the general public

and that provides financial security as collateral for the bail

bonds.

§ 5742.  Registration and licensure required.

(a)  General rule.--No [professional] bail bondsman shall

become surety on any undertaking, and no person shall engage in

or continue to engage in business as [a professional bondsman]

providing bail bonds to the general public, unless he has [been

registered and is currently licensed as a professional bondsman

by the Insurance Department as provided in this subchapter], at

a minimum, fulfilled the requirements for the issuance of a

casualty insurance license as determined by the department, has

secured a casualty insurance license from the department and has

filed a copy of his license in the office of the clerk in the

manner prescribed by general rules.

(b)  Form of application.--Every application for

[registration and] licensure as a [professional] bail bondsman

shall [be made in writing upon such form as may be prescribed by

regulations promulgated by the Insurance Department] comply with

the application requirements for a casualty insurance license

issued by the department and shall complete all educational,

testing, financial and fiduciary requirements imposed by law for

obtaining a license as a casualty insurance agent.

§ 5743.  Issuance of license.

(a)  General rule.--The [Insurance Department, upon receipt

of:

(1)  an application for registration and licensure as a

professional bondsman; and

(2)  an annual license fee of $50;

shall, if it approves the application, register the applicant as

a professional bondsman and issue him a license.] department

shall issue a license to an applicant who satisfactorily meets

the requirements established by the department for insurers of

casualty insurance and pays the associated licensing fee.

(a.1)  Territorial scope of license.--A bail bondsman may

only conduct business in a judicial district when he provides

either:

(1)  a copy of the casualty license issued to him by the

Pennsylvania Office of Judicial Support to the office of the

clerk of court for the judicial district and a copy of a

power of attorney qualifying him to provide bail bond

services on behalf of a corporate bail surety insurer; or

(2)  security in the amount of $50,000 for the first

$150,000 of the total amount of bail bonds to be provided and

$10,000 for every additional $100,000 thereafter.

(a.2)  Forms of security.--The department shall accept the

following forms of security for self-insurance purposes under

this section:

(1)  United States currency, including United States

Treasury bills, United States Treasury notes or other

negotiable obligations of the United States Government.

United States Savings Bonds are not negotiable.

(2)  Evidence of escrow deposits in Federal or State

banks, credit unions, savings and loan associates, if

federally insured. Escrow deposits must be established for

the sole purpose of providing security to meet the duties of

a self-insurer under this section.

(3)  Irrevocable letters of credit issued by any bank in

this Commonwealth or such other bank as approved by the

office of the clerk of court through the President Judge of

the relevant judicial district.

(4)  Real estate, provided that the party offering the

real estate submits an appraisal by an independent appraiser,

a title search confirming there are no liens or encumbrances

and a deed of trust naming the Commonwealth of Pennsylvania

as beneficiary.

(a.3)  Self-insured bail bondsman.--Any person conducting

business as a self-insured bail bondsman or agent of a self-

insured bail bondsman shall be required to submit an affidavit

stating the aggregate amount of bail bonds which are active at

the time of posting under the self-insured bail bondsman deposit

account with the relevant judicial district. The affidavit shall

be attested to as the best of the affiant's information,

knowledge and belief and shall be subject to the penalties of 18

Pa.C.S. § 4904 (relating to unsworn falsification to

authorities).

(b)  Duration.--Each license shall be valid for [one year]

two years following the date of issue.

(c)  Nontransferable.--No license issued under this

subchapter shall be assigned or transferred.

§ 5744.  Office.

No license shall be issued to, and no privileges or rights

conferred by any license issued under the provisions of this

subchapter shall be exercised by[,] any [professional] bail 

bondsman[,] unless [such professional bondsman] he has and

[shall thereafter maintain] maintains an office in the county in

which he conducts or intends to conduct his business.

§ 5745.  Refusal to grant or renew license.

The [Insurance Department] department, upon the written

request of any applicant for a license or for renewal thereof

whose application therefor has been refused, shall afford [such]

the applicant a hearing on the question of the grant or renewal

of a license. The department may not grant a license or renew a

license under this chapter to an applicant if any of the

following provisions apply:

(1)  The applicant was convicted or pled guilty or nolo

contendere to an offense of fraud, theft, deception, use of

false identification or similar charge under 18 Pa.C.S.

(relating to crimes and offenses) or any other Federal or

state law for the same or similar offense.

(2)  The applicant violated any of the licensing

requirements relating to a casualty insurance agent license,

including continuing education requirements. If a license

renewal is denied for failure to complete continuing

education requirements, then the applicant shall be afforded

90 days to cure the defect. Upon cure, the applicant must

provide notice of completion of the continuing education

requirements to the department, and the department shall

grant the renewal of the license, if no other causes exist

for denial of the renewal. If the applicant fails to cure the

defect in a timely manner, the applicant must apply for a new

license rather than a renewal.

(3)  The applicant fraudulently obtained a license as a

casualty insurance agent or bail bondsman under the

provisions of this chapter, other chapters relating to

insurance licensing in this Commonwealth or any other

jurisdiction within the United States.

(4)  The applicant was adjudicated bankrupt or insolvent

in this Commonwealth or any other jurisdiction within the

United States.

(5)  The applicant failed to pay any judgment rendered on

any forfeited undertaking in any court of competent

jurisdiction.

(6)  The applicant interfered or attempted to interfere

with the administration of justice.

§ 5746.  Suspension or revocation of license.

(a)  General rule.--Upon petition of the district attorney,

county solicitor, clerk of court or by any interested person to

suspend or revoke the license issued to any licensee under this

subchapter, the department shall issue a rule [shall issue out

of the court of common pleas,] returnable not less than ten days

after the issuance thereof for the licensee to show cause, if

any, why the licensee should not have its license revoked or

suspended. It shall be sufficient service of the [said] rule

upon any licensee to leave a copy thereof at the address [filed

by the licensee with the clerk pursuant to this subchapter]

provided by the licensee to the department under the license

requirements of a casualty insurance agent.

(b)  Grounds for suspension or revocation.--Any license

issued under the provisions of this subchapter may be

suspended[, by any court of common pleas] by the department for

a period less than the unexpired portion of the period for which

[such license shall have been] the license was issued, or may be

revoked for good cause, or for any one or more of the following

causes:

(1)  Violation of any of the provisions of this

subchapter or of the licensing requirements relating to a

casualty insurance agent license, including, but not limited

to, continuing education requirements, unless the violation

of the continuing education requirements has been remedied

consistent with section 5745 (relating to refusal to grant or

renew license).

(2)  Fraudulently obtaining a license as a casualty

insurance agent or bail bondsman under the provisions of this

subchapter, other provisions relating to insurance licensing

in this Commonwealth or any other jurisdiction within the

United States.

(3)  Upon conviction for [any criminal offense under the

laws of this Commonwealth or under the laws of the United

States or any other jurisdiction] an offense of fraud, theft,

deception, use of false identification or same or similar

offense under 18 Pa.C.S. (relating to crimes and offenses) or

any other Federal or state offense.

(4)  Upon being adjudged [a] bankrupt or insolvent in

this Commonwealth or any other jurisdiction within the United

States.

(5)  Failing to pay any judgment rendered on any

forfeited undertaking in any court of competent jurisdiction.

(6)  Any interference or attempted interference with the

administration of justice.

(c)  Good cause.--If the petition for suspension or

revocation is based upon the failure of the licensee to pay a

forfeited undertaking, proof that the forfeited undertaking has

been paid to the office of the clerk or that the defendant has

been returned to justice shall be evidence of good cause that

the license should not be suspended or revoked.

(d)  Notice to surety.--

(1)  If suspension or revocation proceedings are

commenced against a bail bondsman and he has provided a

qualifying power of attorney on behalf of a corporate surety

insurer to the office of the clerk and the suspension or

revocation proceedings are based upon the failure of the bail

bondsman to pay a forfeited undertaking, notice shall be sent

by the department to the corporate surety insurer of the

administrative action and the nonpayment of the forfeited

undertaking.

(2)  If the bail bondsman cannot demonstrate good cause

and, as a result, the license is suspended, notice of

nonpayment shall be sent to the corporate surety insurer on

whose behalf the bail bondsman is appointed to do business.

(e)  Duty of corporate surety insurer to pay.--

(1)  Within 20 days of receiving the notice of payment,

the corporate surety insurer shall pay the forfeited

undertaking amount to the office of the clerk or, if payment

is not rendered within the 20-day period, the clerk of courts

shall send notice to the department seeking revocation of its

certificate of authority to do business in this Commonwealth.

A copy of the notice sent by the clerk to the department

shall be also sent to the corporate surety.

(2)  The department may revoke the certificate of

authority 30 days after the date of the mailing of the notice

of intent to revoke the certificate of authority. Revocation

proceedings shall conform substantially to the existing

practices determined by the department.

(3)  If the forfeited undertaking is paid after the 20-

day period, but prior to the exhaustion of the 30-day notice

period to the department, the revocation of the certificate

of authority shall be deemed moot and the certificate of

authority shall remain in full force and effect.

(4)  If the forfeited undertaking is paid and the

corporate surety recuperates the defendant, the corporate

surety may petition the court for remission of the forfeiture

as provided under section 5750 (relating to private cause of

action).

§ 5747.  Statements by [fidelity or surety companies] bail

bondsmen.

[Any fidelity or surety company, authorized to act as surety

within this Commonwealth, may execute an undertaking as surety

by the hand of an officer, employee, agent, or attorney,

authorized thereto by a resolution of its board of directors, a

certified copy of which, under its corporate seal, shall be

filed with the undertaking. Fidelity or surety companies engaged

in the business of entering bail shall file, with the clerk of

the court of common pleas and with the district attorney of each

county in which bail is entered,] A bail bondsman shall file,

with the clerk of court of the judicial district where bail is

entered, a biannual statement on which shall appear a

statement[, quarterly on] which shall appear a summary of all

bail entered by [such company] the bail bondsman during the

previous [quarter] reporting period, together with the

compensation charged therefor.

§ 5748.  [Maximum premiums] Premiums.

(a)  General rule.--[No professional bondsman shall charge a

premium or compensation for acting as surety on any undertaking

in excess of 10% for the first $100, and 5% for each additional

$100 of such undertaking.] Any corporate surety bail bondsman or

self-insured bail bondsman who knowingly or intentionally fails

to charge the premium rate filed with and approved by the

department commits a misdemeanor of the third degree. In

addition to any criminal liability imposed by law, the

department shall establish sanctions for failure to charge the

required premium.

(a.1)  Defense.--It shall not be a violation of subsection

(a) if the bail bondsman failed to collect the full premium by

an unknowing or unintentional act or by mistake.   

[(b)  Civil penalty.--In any action brought to recover an

overcharge by a professional bondsman, where such overcharge is

proved, the professional bondsman shall be liable to pay treble

damages therefor and reasonable counsel fees.]

(c)  Promissory note.--

(1)  If a surety bail bond agent determines to extend

credit for payment of the premium, the surety bail bond agent

must have the defendant and any indemnitor execute a bona

fide promissory note for the balance of the premium due. The

promissory note shall provide that the amount owed must be

paid in not later than 365 days.

(2)  In the event that the premium has not been paid in

full to the surety bail agent by the due date, the surety

bail agent must institute suit, by a verified complaint, on

the promissory note within 60 days after the due date. The

surety bail agent must diligently attempt to obtain judgment

on that promissory note within 120 days after filing suit

unless there is good cause for failure to obtain such a

judgment.

(3)  Good cause includes, but is not limited to, the

filing of bankruptcy by a maker on the promissory note, or a

failure to obtain service of process after good faith,

diligent efforts.

(d)  Audit.--At any time, upon five days' advance notice to

the bail bondsman, the department may audit any bail bondsman to

assure that the bail bondsman is charging the full amount of

premium consistent with the premium rate filed with and approved

by the department. The said audit shall determine the approved

premium rate, the amount of premium collected, the case docket

number if assigned, the total amount of the surety bond, the

date the surety bond was posted and the date the premium

computed at the filed rate was due.

§ 5749.  Prohibitions and penalties.

(a)  Licensing.--Any person who engages in business as a

[professional] bail bondsman without being [registered and]

licensed in accordance with the provisions of this subchapter,

or who engages in such business while his license is suspended

or revoked, commits a misdemeanor of the third degree and shall

be prohibited from conducting business as a bail bondsman in

this Commonwealth for the remainder of the person's lifetime and

from holding himself out as a licensed bail bondsman.

* * *

Section 3.  Title 42 is amended by adding a section to read:

§ 5750.  Private cause of action.

(a)  Self-policing.--Any bail bondsman or surety who

determines that a competitor has engaged in an activity that is

in violation of any provision of this chapter may commence a

private cause of action seeking monetary damages, declaratory

judgment or injunctive relief from the court of common pleas of

the county in which the violation occurred. The violation must

be proven by clear and convincing evidence.

(b)  Frivolous actions.--Any bail bondsman or surety who

knowingly commences a frivolous private cause of action under

this section shall be liable for actual damages of the other

party in the amount of the costs of the defense of the suit and

punitive damages of an equal amount to those costs that

constitute actual damages.

Section 4.  This act shall take effect in 60 days.