DIFP: Bulletins on Corporate Licensing, Fictitious Names

The Missouri Department of Insurance (DIFP) recently posted two bulletins regarding the bail bond industry on their website.

The first has to do with the use of fictitious names or names used to market the bail bond company that do not clearly indicate the name of the person licensed to conduct bail bond business. Under the advisory, the DIFP says that they and the courts have had problems collecting judgments because of the misuse of fictitious names or marketing names that do not identify the licensee. The advisory says, “It is the view of the Consumer Affairs Division that any use of a marketing name that does not clearly communicate the name of the properly licensed general bail bond agent would constitute misconduct or misrepresentation. Misconduct or misrepresentation in the performance of the functions of a bail bond agent may result in an action by the director to discipline the agent’s license. As such, bail bond agents are required to conduct business under the names by which they use to maintain licensure with the Department, or use a generally recognizable version of such name. This generally recognizable version of such name must be in a form that the Department, Missouri courts, and the general public recognize as a licensed agent. This will enable Missouri courts to easily monitor who is writing bonds in their courts, disable those bail bond agents that do not maintain current licensure with the Department and curtail those agents that have unsatisfied forfeitures with the courts from writing additional bonds.”

The second advisory has to do with the licensing of bail bond corporations. The DIFP explains, “Under previous administrations, the Department accepted applications for General Bail Bond Agents operating under a corporate form of business. However, Missouri Supreme Court Rule 33.20 states, ‘Any corporation, association, or company formed under the provisions of section §379.010, RSMo, for the purpose of making surety insurance shall be qualified to act as a surety upon any bail bond taken under the provisions of these rules upon presenting evidence satisfactory to the court of its solvency…’ Corporations that ‘make’ or write surety insurance must be structured as an insurance company and properly licensed as an insurance company under section §379.010, RSMo. As such, if this entity is a stock company, it must maintain a fully paid capital of at least eight hundred thousand dollars ($800,000.00) and a surplus of at least eight hundred thousand dollars ($800,000.00). Corporations that write surety, but are not admitted under section §379.010, RSMo, are in violation of section §375.310, RSMo and are subject to civil and criminal enforcement. Corporations that were previously admitted to write surety in Missouri now have two options: 1) they can apply for a general bail bond agent license under an individual’s name; or 2) they can continue to operate as a corporation, but they must do so as an agent of an insurance company that is registered under §379.010, RSMo. Under this second arrangement, the insurance company is writing the surety, as opposed to the corporate agent. The corporate agent must submit to the Department a copy of a general power of attorney appointing the corporation to represent the company in matters of bail. This power of attorney must be submitted to the Department at the time of initial application, as well as biennial renewal.”

The DIFP met with bail bond corporations last month to discuss the changes in licensing procedures.