California Legislature—2015–16 Regular Session

Assembly BillNo. 2449


Introduced by Assembly Member Eggman

February 19, 2016


An act to amend Section 1811 of, and to add Section 1824 to, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 2449, as introduced, Eggman. Insurance: bail licenses.

Existing law provides for the issuance of bail licenses under the jurisdiction of the Insurance Commissioner for bail agents, bail permittees, and bail solicitors. Existing law requires persons soliciting or negotiating the execution or delivery of an undertaking of bail on behalf of a surety insurer to be licensed as a bail agent. Existing law requires the commissioner to charge and collect specified fees for an application for a new or renewed bail license by a bail agent, bail permittee, or bail solicitor.

This bill would increase the fees for an application for a new or renewed bail license, as specified. The bill would require each surety insurer or bail permittee to pay a fee, not to exceed $10 per bail bond transaction. These fees would go to the Bail Investigation and Prosecution Fund, created as a special account in the Insurance Fund. The bill would provide that moneys in the Bail Investigation and Prosecution Fund be distributed by the commissioner, upon appropriation, to fund the reasonable costs incurred in regulating entities involved in the undertaking of bail, as specified. The bill would provide that if the total amount in the Bail Investigation and Prosecution Fund ever exceeds $8,000,000, then the commissioner shall reduce the amount of the assessment, as specified. The bill would authorize the commissioner to develop guidelines to implement or clarify these provisions. The bill would require the commissioner to provide an annual report on the department’s Internet Web site including various information, as specified. The bill would make related legislative findings and declarations.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declare as follows:

2(a) Currently, bail agents, as defined in Section 1802 of the
3California Insurance Code, pay five hundred sixty-six dollars
4($566) for a two-year license and one hundred seventy dollars
5($170) for a license renewal. Bail permittees, as defined in Section
61802.5 of the Insurance Code, pay one thousand one hundred
7thirty-four dollars ($1,134) for a two-year license and seven
8hundred sixteen dollars ($716) for a license renewal. Bail solicitors,
9as defined in Section 1803 of the Insurance Code, pay five hundred
10sixty-six dollars ($566) for a two-year license and one hundred
11seventy dollars ($170) for a license renewal.

12(b) Section 12978 of the Insurance Code states that the
13cumulative amount that fees may be increased or decreased shall
14be the amount necessary to provide sufficient moneys to carry out
15the projected workload of the Department of Insurance.

16(c) In the past five years, the seriousness and the number of bail
17complaints received by the department have steadily increased.

18(d) Despite the fact that bail products are less than 2 percent of
19the insurance market, bail complaints account for roughly 10
20percent of the Reports of Suspected Violation workload of the
21department’s Enforcement Branch.

22(e) The limited resources of the department do not currently
23allow for a sufficiently comprehensive bail enforcement program.
24Additional resources are needed to create an aggressive prevention,
P3    1investigation, and prosecution program dedicated to eliminating
2illegal bail schemes, and additionally to increase outreach and
3education, particularly to bail professionals, on bail laws in
4California.

5(f) Legislation is necessary that would provide the department
6with the resources to eliminate the bail complaint backlog, and
7more fully investigate illegal bail practices, by more appropriately
8aligning the licensing fees paid by bail agents, bail permittees, and
9bail solicitors, and by creating a Bail Investigation and Prosecution
10Fund within the department. The fund would contain resources
11from increased licensing fees for bail professionals and from the
12imposition of a fee of ten dollars ($10) per bond transaction in
13California. A portion of the moneys in the fund would be
14distributed to district attorneys and city attorneys to prosecute these
15cases.

16(g) Effective bail enforcement by the department produces
17numerous benefits to both the bail bond industry and consumers
18who purchase bail products. Consumers are protected from
19predatory tactics by unscrupulous bail agents, and the bail industry
20benefits from improved customer confidence.

21(h) A well-regulated bail industry reduces business and
22transaction costs for industry members, who benefit when business
23partners perceive less risk from engagement with the bail industry,
24and it fosters competitive bail markets by ensuring a level playing
25field for all members of the bail industry.

26

SEC. 2.  

Section 1811 of the Insurance Code is amended to
27read:

28

1811.  

For his services in connection with the filing of any
29application or request for any license under this chapter, the
30commissioner shall charge and collect the following fees:

31(a) For filing an application or request for bail agent’s license,
32begin delete one hundred eighteen dollars ($118)end deletebegin insert one thousand one hundred
33thirty-two dollars ($1,132)end insert
per year.

34(b) For filing an application or request for bail solicitor’s license,
35begin delete one hundred eighteen dollars ($118)end deletebegin insert one thousand one hundred
36thirty-two dollars ($1,132)end insert
per year.

37(c) For filing an application or request for bail permittee’s
38license,begin delete two hundred thirty-six dollars ($236).end deletebegin insert two thousand two
39hundred sixty-eight dollars ($2,268).end insert

P4    1(d) For filing an application for examination, or reexamination,
2twenty-four dollars ($24).

3(e) For a renewal application, a fee ofbegin delete thirty-five dollars ($35)end delete
4begin insert three hundred forty dollars ($340)end insert per year. In the case of a bail
5agent with more than one valid notice of appointment on file, the
6fee to be charged pursuant to this subdivision shall be the fee
7provided herein multiplied by the number of insurers whose valid
8appointments are on file at the date the document is filed unless
9the bail agent in that document advises the commissioner of his
10or her intent to terminate the appointment of one or more of those
11insurers, in which event the fee shall be based upon the number
12for insurers remaining.

13(f) For a bail solicitor’s renewal application, a fee ofbegin delete thirty-five
14dollars ($35)end delete
begin insert three hundred forty dollars ($340)end insert per year.

15(g) For a bail permittee’s renewal application, a fee ofbegin delete one
16hundred forty-eight dollars ($148) per year.end delete
begin insert one thousand one
17hundred thirty-two dollars ($1,132).end insert

18(h) At the time of filing an application for a license, if a
19qualifying examination is required for issue or in connection with
20the license, the fee for filing the first application to take the
21qualifying examination shall be paid at the time of filing application
22for the license.

23(i) For filing application or request for approval of a true or
24fictitious name pursuant to Section 1724.5, twelve dollars ($12),
25except that there shall be no fee when the name is contained in an
26original application.

27(j) For filing a bond required by this chapter, except when the
28bond constitutes part of an original application, ten dollars ($10).

29(k) For filing a first amendment to an application, six dollars
30($6).

31(l) For filing a second and each subsequent amendment to an
32application, twelve dollars ($12).

33

SEC. 3.  

Section 1824 is added to the Insurance Code, to read:

34

1824.  

(a) The Bail Investigation and Prosecution Fund is
35hereby created as a special account within the Insurance Fund.
36Each surety insurer or bail permittee admitted and authorized to
37execute an undertaking of bail in this state through a licensed bail
38licensee shall pay a fee per bail bond transaction, not to exceed
39ten dollars ($10) for each bail bond posted in this state. The revenue
P5    1from this fee shall be deposited into the Bail Investigation and
2Prosecution Fund.

3(b) Moneys in the Bail Investigation and Prosecution Fund shall
4be distributed, upon appropriation by the Legislature, to fund the
5reasonable costs incurred in regulating entities involved in the
6undertaking of bail as described in this section. Moneys in the Bail
7Investigation and Prosecution Fund shall not be used for any other
8purpose. Moneys in the Bail Investigation and Prosecution Fund
9shall be distributed by the commissioner as follows:

10(1) Seventy percent of these funds shall be distributed within
11the department for consumer enforcement and protection purposes
12related to bail transactions, including, but not limited to:

13(A) Investigating and prosecuting unlawful conduct by bail
14licensees, or a person or entity purporting to solicit or negotiate in
15respect to execution or delivery of an undertaking of bail or bail
16bond, or execute or deliver an undertaking of bail or bail bond, or
17matters subsequent to the execution of an undertaking of bail or
18bail bond contract and arising out of it.

19(B) Responding to consumer inquiries and complaints related
20to bail transactions.

21(C) Regulating and overseeing bail bond products, solicitation,
22and advertising directed toward consumers.

23(D) The cost of any fiscal audit performed pursuant to this
24section.

25(2) Thirty percent of the funds shall be distributed to county
26district attorneys and city attorneys, for investigating and
27prosecuting surety insurer and bail abuse cases involving licensees,
28or any person or entity engaged in the solicitation or negotiation
29in respect to execution or delivery of an undertaking of bail or bail
30bond, or execution or delivery of an undertaking of bail or bail
31bond.

32(A) The commissioner shall distribute funds to county district
33attorneys and city attorneys who show a likely positive outcome
34that will benefit consumers in the local jurisdiction based on
35 specific criteria promulgated by the commissioner. Each local
36district attorney and city attorney desiring a portion of those funds
37shall submit to the commissioner an application, including, at a
38minimum, all of the following:

39(i) The proposed use of the moneys and the anticipated outcome.

P6    1(ii)  A list of all prior relevant cases or projects and a copy of
2the final accounting for each. If cases or projects are ongoing, the
3most recent accounting shall be provided.

4(iii) A detailed budget, including salaries and general expenses,
5specifically identifying the cost of purchase or rental of equipment
6or supplies.

7(B) Each district attorney and city attorney who receives funds
8pursuant to this section shall submit a final detailed accounting at
9the conclusion or closure of each case or project. For cases or
10projects that continue longer than six months, interim accountings
11shall be submitted every six months, or as otherwise directed by
12the commissioner.

13(C) Each district attorney and city attorney who receives funds
14pursuant to this section shall submit a final report to the
15commissioner, which may be made public, as to the success of the
16cases or projects conducted. The report shall provide information
17and statistics on the number of active investigations, arrests,
18indictments, and convictions. The applications for moneys, the
19distribution of moneys, and the annual reports shall be public
20documents.

21(c) Notwithstanding any other provision of this section,
22information submitted to the commissioner pursuant to this section
23concerning criminal investigations, whether active or inactive,
24shall be confidential.

25(d) The commissioner may conduct a fiscal audit of the programs
26administered under this subdivision. If conducted, this fiscal audit
27shall be conducted by an internal audit unit of the department.

28(e) If the commissioner determines that a district attorney or
29city attorney is unable or unwilling to investigate or prosecute a
30relevant bail abuse case, the commissioner may discontinue
31distribution of funds allocated for that matter and may redistribute
32those funds to other eligible district attorneys or city attorneys.

33(f) If, as of June 30 of any calendar year, the total amount in
34the Bail Investigation and Prosecution Fund exceeds eight million
35dollars ($8,000,000), the commissioner shall reduce the amount
36of the assessment accordingly for the following year to eliminate
37that excess. A surety insurer, upon receipt of an invoice, shall
38transmit payment to the department for deposit in the Bail
39Investigation and Prosecution Fund. Any balance remaining in the
40Bail Investigation and Prosecution Fund at the end of the fiscal
P7    1year shall be retained in the account, to be available in the next
2fiscal year.

3(g) The commissioner may develop guidelines for implementing
4or clarifying these provisions, including guidelines for the
5allocation, distribution, and potential return of unused funds. The
6commissioner may, from time to time, issue regulations for
7implementing or clarifying these provisions.

8(h) The commissioner shall provide a consolidated report
9annually on the department’s Internet Web site, which shall
10include, but is not limited to, the following information:

11(1) The number of consumer complaints regarding to bail bond
12 transactions.

13(2) The number of investigations initiated relating to bail bond
14transactions.

15(3) The number of investigations related to bail and bail bond
16transactions referred to and reported by prosecuting agencies.

17(4) The number of administrative or regulatory cases related to
18bail and bail bond transactions referred to the department’s legal
19division.

20(5) The number of administrative or regulatory enforcement
21actions taken in cases related to bail and bail bond transactions.

22(i) A violation of this section is not a crime pursuant to Section
231814.

24

SEC. 4.  

The Legislature finds and declares that Section 3 of
25this act, which adds Section 1824 to the Insurance Code, imposes
26a limitation on the public’s right of access to the meetings of public
27bodies or the writings of public officials and agencies within the
28meaning of Section 3 of Article I of the California Constitution.
29Pursuant to that constitutional provision, the Legislature makes
30the following findings to demonstrate the interest protected by this
31limitation and the need for protecting that interest:

32In order to ensure that criminal investigations are not frustrated
33or hindered, it is necessary to limit the public’s right of access to
34information submitted to the Insurance Commissioner pursuant to
35this act concerning criminal investigations.



O

    99