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Posted May 29, 2015 at 12:00 AM by Michael J. Whitlock, Executive Vice President - 4 Comments

A bill that would have added a $15 fee to each bail bond was held up in the Appropriations Committee yesterday and is now dead for the 2015 session of the California State Legislature.

The California Department of Insurance was behind efforts to pass AB 1406 which, if passed, would have generated millions of dollars for the Bail Investigation and Prosecution Fund.  This fund would have underwritten the costs to investigate complaints against California Bail Agents.

Commercial surety companies and bail agents doing business in California already pay millions of dollars annually to the State of California and the California Department of Insurance, in the way of premium taxes, licensing fees and appointment fees, so the addition of a $15 per bond fee seemed excessive.

AB 1406 faced opposition from the California Bail Agents Association, Golden State Bail Agent Association and the American Bail Coalition.  This bill received support from a small group of bail agents who believe more investigation of the commercial bail industry is needed.

As with every profession and industry there are going to be bad actors.  These bad actors need to be rooted out.  It was the opinion of many the State of California already receives sufficient revenue from the commercial bail industry to fund investigations of bail related complaints.  Many viewed the proposed $15 fee as a tax on the commercial bail industry and it would have made it more costly for criminal offenders to bail out of jail.

The best thing bail agents can do to reduce the number of complaints filed with the California Department of Insurance is to conduct business professionally and within the confines of the law as the majority of bail agents in California and across the Country do already.


Add your own Comment!

Posted May 29,2015 at 12:00 PM by Tony Suggs


As you know I was one of the "small group" of bail agents that supports AB1406. We are not asking for more investigations of the bail bond profession, just a more timely investigations of the complaints the DOI already gets.

I filed several complaints over the years of very clear violations of the insurance and penal codes. Most were not even acted on. The last one where I submitted video evidence, resulted in a slap on the wrist to the bail agent and noting at all to the violator of PC 1299.

Over the years I have heard many agents say that we need to police ourselves. Well, that hasn't worked and it never will if the regulatory agency does not or will not follow up with clear and appropriate punishments.

Even though it may be a small number of "bad" bail agents, they are creating many problems for the rest of us. They are also furthering the negative stereotypes of the profession and unfairly taking away business from those agents that you correctly state that conduct their business professionally and within the rules and regulations.

Finally, regarding the funding of the DOI for bail related issues, the premium taxes paid by the sureties each year go into the general fund, as does all insurance premium taxes. Only the licensing fees go towards bail regulation and enforcement.

The general taxes pay for such things as education and that stupid high speed rail system.

Ever other line of insurance has a special fee, not a tax, applied to the policies written. They have one for auto fraud investigations, workers comp and MediCal. The reason is the licensing fees is not enough to cover the cost of investigating fraud in those lines just as it is not enough to deal with the bail complaints.

When I got licensed 15 years ago, there were only 2,000 bail agents. Now we have over 3,500, a 125% increase. I can guarantee you that there has been a similar or higher increase in the number of bad bail agents competing for a smaller share of the bail bond pie.

A simple solution as to who pays the proposed $15 fee is to just deduct it from any "rebate" that the bail agents gives the bail client. We all rebate. I can guarantee you no one collects the full 10% premium on each and every bond they write.

Every client knows that everyone discounts, I mean rebate, and they ask for it. So to get a 20% rebate minus the $15 fee charge will not cause anyone to lose any business at all.

The problems in California are big and will only get bigger as more and more counties are releasing defendants on O.R. or reducing bail amounts. Then as Pretrail Release Agencies grow, we will see even LESS potential bail available to the still increasing number of bail agents.

We can sit back and fight to save a few dollars in fees that can very easily be passed on to the clients legally and appropriately under the insurance code or we can continue to watch more and more bad bail agents, who will not change their ways, put legitimate bail agents out of business.

As many have said over the years, "sometimes we are our own worse enemy."

Posted May 30,2015 at 12:26 PM by Patricia Newcombe

In theory, having an enhanced bail investigative unit at the CDI would be a great benefit to the people of our state, not to mention the "good" bail agents. However, historically the CDI investigative unit has proven itself to be inept as it relates to bail matters. Because of this, I am thankful that this bill is dead.

Patti Newcombe

Posted May 30,2015 at 02:11 PM by Tony Suggs

Because bail has always been the lowest priority for the CDI investigators, they never gained enough experience to handle all the complaints effectively.

If not the CDI whom then should deal with the bad agents? Who has the authority, experience and power to clean up the business? The surety companies will not. The bail associations have no legal authority to do anything.

Please someone tell what the answers are!

Everyone is staying the CDI is the problem yet, I have not heard any suggestions to fix the problems other than changing the codes that will still be enforced by the inept CDI.

Posted June 1,2015 at 05:35 PM by Geri Campana

Members of the Bail Community,
I have been a California licensed bail agent for 31 years and an agency owner.
Respecting everyone’s opinion and choice to support or oppose AB 1406……… I would like to share the reasons WHY I SUPPORT AB 1406.
California Department of Insurance CDI:
• Does not have one single attorney dedicated to bail due to the lack of funding,
• Does not have a dedicated staff for bail enforcement due to lack of funding and
• Does not have investigators dedicated to bail due to the lack of funding.
CDI does not have the power to arrest and can only investigate and enforce insurance codes, not penal codes. Having a designated bail fund (AB 1406) modeled after California’s Auto Fraud, Life and Annuity Consumer Protection Assessment, Disability and Healthcare Fraud and others, would provide a dedicated bail investigation and prosecution fund for:
• the CDI to hire dedicated attorneys, staff and investigators for insurance code violations and
• grants for District Attorney Offices to investigate, arrest and prosecute penal code violations
Excerpts from CDI sites:
The Department of Insurance is not funded by the state’s general fund. Its only sources of revenue are the fees and assessments paid by the insurance industry. These sources include: fraud assessments, which are used exclusively to enforce laws against insurance fraud.

Premium taxes, which are a form of sales tax paid by insurance companies on the basis of gross premiums, are deposited in the state's general fund.

The department has the authority to raise only license fees to fund operations not financed by other sources of revenue.

The CDI Fraud Division oversees the following five fraud programs: (1) Automobile Insurance Fraud Program, (2) Organized Automobile Fraud Activity Interdiction Program, (3) Disability and Healthcare Fraud Program, (4) Workers’ Compensation Insurance Fraud Program, and (5) Property, Life and Casualty Fraud Program.
These programs are funded through a combination of annual insurer general assessments and insurance policy assessments. With the exception of the Property, Life and Casualty Fraud Program, the County District Attorneys share the funding with the Fraud Division.
These “assessments” which establish dedicated funds for enforcement programs have worked. AB1406 was/is to be modeled after existing, successful teamwork of the CDI and DA. Since bail does not have a similar CDI fund and grant program to team with DA’s offices for penal code enforcement, they lack teeth and personnel to prosecute the bad actors. We need resources to fund consumer protection and fair business practices by getting rid of the bad actors….. AB 1406 could provide the answer.
After all, $15 per bond is a small price to pay ……. compared to paying zero and not writing a bond…..

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