§ 38a-660g — Collateral security or other indemnity on a bail bond.

Connecticut § 38a-660g

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 700f: Bail Bond Insurance

Text

(a) A surety bail bond agent may receive collateral security or other indemnity on a bail bond. (b) A surety bail bond agent who receives collateral security or other indemnity on a bail bond shall comply with all of the following requirements: (1) The collateral security or other indemnity shall be reasonable in relation to the amount of the bail bond; (2) The collateral security or other indemnity shall not be used by the surety bail bond agent for personal benefit or gain and shall be returned in the same condition as received; (3) Acceptable forms of collateral security or other indemnity include, but are not limited to, cash or its equivalent, a promissory note, an indemnity agreement, a real property mortgage in the name of the insurer or any Uniform Commercial Code filing; (4) The surety bail bond agent shall provide to the person providing the collateral security or other indemnity a written, numbered receipt that describes in a detailed manner the collateral security or other indemnity provided, along with copies of any documents rendered; (5) The surety bail bond agent shall hold the collateral security or other indemnity in a fiduciary capacity and shall, prior to any forfeiture of a bail bond, keep the collateral security or other indemnity separate and apart from any other funds or assets of the surety bail bond agent; (6) If the surety bail bond agent receives collateral security or other indemnity in excess of fifty thousand dollars in cash, the cash amount shall be made payable to the insurer in the form of a cashier's check, United States postal money order, certificate of deposit or wire transfer; and (7) If the surety bail bond agent receives collateral security or other indemnity in excess of fifty thousand dollars in cash or its equivalent, the agent shall promptly forward the entire amount of such collateral security or other indemnity to the insurer or managing general agent. (c) The surety bail bond agent may deposit collateral security or other indemnity in an interest-bearing account in a federally insured bank or savings and loan association in this state to accrue to the benefit of the person providing the collateral security or other indemnity. The surety bail bond agent, insurer or managing general agent shall not receive any pecuniary gain on the collateral security or other indemnity deposited. (d) (1) The insurer shall be liable for all collateral security or other indemnity received by a surety bail bond agent. If, upon final termination of liability on a bail bond, the surety bail bond agent or managing general agent fails to return the collateral security or other indemnity to the person who provided it, the insurer shall return the actual collateral or other indemnity to such person or, in the event that the insurer cannot locate the collateral security or other indemnity, shall pay such person the value of the collateral security or other indemnity. (2) An insurer's liability as described in subdivision (1) of this subsection shall survive the termination of the surety bail bond agent's appointment, with respect to those bail bonds that were executed by the surety bail bond agent prior to the termination of the appointment. (e) (1) If a forfeiture of the bail bond occurs, the surety bail bond agent or insurer shall give the principal on the bail bond and the person who provided the collateral security or other indemnity thirty days written notice of intent to convert the collateral security or other indemnity into cash to satisfy the forfeiture. The notice shall be sent by certified mail, return receipt requested, to the last-known address of the principal and the person who provided the collateral security or other indemnity. (2) Whenever a stay of execution upon such forfeiture is ordered pursuant to section 54-65a , the surety bail bond agent or insurer shall send such written notice by certified mail, return receipt requested, to the last-known address of the principal and the person who provided the collateral security or other indemnity at least thirty days prior to the expiration of such stay. (3) (A) The surety bail bond agent or insurer shall convert the collateral security or other indemnity into cash within a reasonable period of time and return to the principal or the person who provided the collateral security or other indemnity any amount in excess of the face value of the bail bond, minus the actual and reasonable expenses of converting the collateral security or other indemnity into cash. Such expenses shall not exceed ten per cent of the face value of the bail bond. If a surety bail bond agent expends more than ten per cent of the face value of the bail bond to convert the collateral security or other indemnity into cash, such agent may file a civil action to recover the full amount of the actual and reasonable expenses upon motion and proof that the actual and reasonable expenses exceed ten per cent of the face value of the bail bond. (B) If a forfeiture of the bail bond occurs and the insurer paid the bail bond, the insurer shall pay to the person who provided the collateral security or other indemnity the value of any collateral security or other indemnity received on the bail bond, minus the actual and reasonable expenses permitted to be recovered under this subsection. (f) Any agreement that violates the provisions of sections 38a-660b to 38a-660k , inclusive, shall be void. A surety bail bond agent or insurer shall not enter into any agreement as to the value of the collateral security or other indemnity that does not reflect the actual value of such collateral security or other indemnity. (g) Prior to the appointment of a surety bail bond agent who is currently or was previously appointed by another insurer, the surety bail bond agent shall file with the commissioner a sworn and notarized affidavit, on a form prescribed by the commissioner, stating that: (1) There has been no loss, misappropriation, conversion or theft of any collateral security or other indemnity being held by the agent in trust for any insurer by which the agent is currently or was previously appointed; (2) all collateral security or other indemnity being held in trust by the agent and all records for any insurer by which the agent is currently or was previously appointed are available for immediate audit and inspection by the commissioner, the insurer, or the managing general agent; and (3) such records will, upon demand of the commissioner or insurer, be transmitted to the insurer for whom the collateral security or other indemnity is being held in trust.

Legislative History

(P.A. 11-45, S. 8.)