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Thursday, March 1, 2007

SB153 Heard in Committee

The Senate Small Business, Insurance and Industrial Relations Committee met last Tuesday and heard testimony on SB153. There were bondsmen in attendance speaking for and against the bill. Speaking in favor of the bill were the bail association leadership and its lobbyist. Speaking against the bill were several individual bail bond agents and general agents. A substitute bill was offered to the committee by Senator Engler. The substitute has not been adopted by the committee. The committee could choose to adopt the sub, the original bill, adopt its own substitute, or simply do nothing. Below is a synopsis of the substitute offered by Senator Engler.

1) The bill raises the CD required to become a general agent from $10,000 to $20,000 and then the DIFP can require the CD be increased to $40,000 based upon
regulation. Whether a company has 1 agent or 51, it will be required to assign $20,000 to the State of Missouri.
2) The DIFP must notify the general agent of a notice of forfeiture within 48 hours of receiving notice from the courts. In my opinion, the language is vague and does not specify if this notice is a bond forfeiture hearing or an unsatisified judgment.
3) The Department shall include a photograph on the bail bond license. The bill does not say how this picture will be obtained or what the additional licensing cost might be.
4) An agent cannot write bonds without noticing the department of the name, address and telephone number for each employer he/she works or operates as an independent contractor. I don’t know why the department would need to know an agent's employment information unless it is related to his/her bail bond license. The licensing application/renewal form requires that a bail bond agent disclose the general agent’s name, address and license number in addition to the general agent's original signature. The law already requires a signed affidavit stating the agent does not work for a political subdivision of the State of Missouri. Why would the DIFP need to know if a bail bond agent sells Avon, works at a grocery store, or has contracted to roof the neighbor’s house?
5) If a bail bond agent goes to work for a new company he/she must file an affidavit with the DIFP and the new general agent, swearing “that to the best of their knowledge, there are no outstanding premiums owed at the time of the appointment.” First of all, notice the words "must" and "their." In order to go to work for a new company, you MUST file an affidavit saying there are no outstanding premiums owed. I think there is very little possibilty an agent could swear under oath that no one owes money to the agent and/or the company. And who are they? The writers of this bill use the possessive plural pronoun "their" to indicate that more than one person owes this money. Secondly, the section does not tell to whom the money might be owed. Premium owed the agent? The former company? The new company? All of the above? Additionally, the section does not differentiate between uncollected or uncollectible premium in the form of credit extended to clients and collected premium not turned into the company. The next sentence of this section states that IF premiums are owed (it doesn’t specify to whom the money is owed) and the agent does not satisfy this obligation, the former general agent may file notice, under oath, with supporting documentation, stating that the bail bond agent has failed to satisfy his/her obligation. Then upon receipt of this notification, the new general agent MAY cancel the authority of his/her new agent. IF the new general agent cancels the authority of the new agent, the cancellation SHALL remain in effect until all of the alleged premiums due the former general agent are paid in full. That is a lot of confusing language.
Misappropriation of premium is already against the law. There are already remedies for a company who alleges an agent misappropriated funds. A company can file a complaint with the DIFP, file a complaint with the local prosecutor, or sue the agent for the amount due.
6) Gives the Director of the DIFP the power to suspend, revoke, refuse to issue, refuse to new, censure, or limit a license. The DIFP will have the power to investigate wrong-doing, will be the hearing body for complaints arising from its own investigations, and then will have the power to revoke licenses based upon its own discretion. Presently, the Director must file a complaint with the Administrative Hearing Commission to discipline a license holder. If, after a hearing, the Commission finds cause, the Director may discipline the licensee.
7) Keeps the 15 year felony clause, but adds that a license MAY be refused, revoked, etc. if an applicant has been convicted of: any dangerous felony defined by section 556.061, RSMo, any felony crime of assault, any felony crime that results in the serious physical injury or death of another person, any felony crime against the administration of justice, or any felony of which deceit or fraud is an element of the offense. Examples of felonies not included in this language would be manufacturing of meth, possession of child pornography, and distribution of drugs.

The committee meets on Tuesdays. They may (or may not) vote this substitute or another form of the bill out of committee and to the floor of the Senate.
Check here to track the progress of this bill.

I know there are some who think I am being nit-picky about the language in this bill. Please remember the frustration and confusion caused by some poorly constructed language in the past. Here is a sample of some of the bail legislation passed in 2004. Try to explain these passages to a new agent in the field.
374.702(4) A person licensed as an active bail bond agent shall hold the license for at least two years prior to owning or being an officer of a licensed general bail bond agent. (Please, someone tell me how you can own a general agent!)
The DIFP can cause a complaint against any license holder believed to be "acting in the capacity of an attorney at a trial or hearing of a person for whom the attorney is acting as surety." [RSMO 375.755(11)] Go ahead, try to figure out why a bail agent can't practice law without a license at a trial or hearing for a person whose bond was written by an attorney.

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Although Missouri Bondsman encourages debate on topics of interest to the bail industry, please be aware that comments are moderated. Please observe the posting rules. No comments will be printed that contain spam, profanity, or libelous comments. Please post comments in a civil, professional manner.