2007 Regular Session
To: Judiciary B
By: Representative Hines
AN ACT TO CLARIFY WHERE A LIMITED SURETY MAY WRITE BONDS; TO SPECIFY REQUIREMENTS FOR THE WRITING OF SUCH BONDS; TO PROHIBIT WRITING FOR LESS THAN A CERTAIN PERCENTAGE OF A BOND AND TO PROVIDE PENALTIES FOR VIOLATIONS; TO AMEND SECTIONS 83-39-3, 83-39-15, 99-5-5 AND 99-5-7, MISSISSIPPI CODE OF 1972, IN CONFORMITY; TO BRING FORWARD SECTIONS 87-5-1, 87-5-3, 87-5-5, 87-5-7, 87-5-9, 87-5-11 AND 87-5-13, MISSISSIPPI CODE OF 1972, WHICH RELATE TO PRINCIPAL AND SURETY; TO BRING FORWARD SECTIONS 83-27-1, 83-27-3, 83-27-5, 83-27-7, 83-27-9 AND 83-27-11, MISSISSIPPI CODE OF 1972, WHICH REGULATE SURETY COMPANIES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) A limited surety may write bonds anywhere in the state provided that such limited surety has an audited annual financial statement and a qualified power of attorney indicating the amount that such limited surety is qualified to write. A personal surety shall only be allowed to write bonds for the types of surety for which they are licensed.
(2) Bonds written through a personal surety shall only cover one (1) individual bondsman.
(3) All bonds must be written for at least ten percent (10%) of the total value of the bond. Any bond written for less than ten percent (10%) shall be grounds for license revocation and shall be a misdemeanor punishable by a fine of Five Thousand Dollars ($5,000.00) and imprisonment up to one (1) year in the county jail.
(4) A bondsman who forfeits a bond shall be prohibited from writing bonds in the state and shall have his or her license revoked until the forfeited bond is paid. If a bondsman has more than three (3) forfeitures in a year and the forfeitures are not paid within ninety (90) days, such bondsman shall be subject to a permanent license revocation.
SECTION 2. Section 83-39-3, Mississippi Code of 1972, is amended as follows:
83-39-3. (1) No person shall act in the capacity of professional bail agent, soliciting bail agent or bail enforcement agent, as defined in Section 83-39-1, or perform any of the functions, duties or powers of the same unless that person shall be qualified and licensed as provided in this chapter. The terms of this chapter shall not apply to any automobile club or association, financial institution, insurance company or other organization or association or their employees who execute bail bonds on violations arising out of the use of a motor vehicle by their members, policyholders or borrowers when bail bond is not the principal benefit of membership, the policy of insurance or of a loan to such member, policyholder or borrower.
(2) (a) No license shall be issued except in compliance with this chapter, and none shall be issued except to an individual. No firm, partnership, association or corporation, as such, shall be so licensed. No professional bail agent shall operate under more than one (1) trade name. A soliciting bail agent and bail enforcement agent shall operate only under the professional bail agent's name. No person who has ever been convicted of a felony or any crime involving moral turpitude, or who has not been a resident of this state for at least one (1) year, unless presently licensed for bail bonds, or who is under twenty-one (21) years of age, shall be issued a license hereunder. No person engaged as a law enforcement or judicial official or attorney shall be licensed hereunder.
(b) (i) No person who is a spouse of: 1. a county or municipal law enforcement official; 2. an employee of a county or municipal law enforcement official; or 3. an employee of a law enforcement entity shall write a bond for a person arrested by the spouse or the law enforcement entity which the person's spouse serves as a law enforcement official or employee; violation of this prohibition shall result in license revocation.
(ii) No person licensed under this chapter shall act as a personal surety agent in the writing of bail during a period he or she is licensed as a limited surety agent, as defined herein.
(iii) No person licensed under this chapter shall give legal advice or a legal opinion in any form.
(3) The department is vested with the authority to enforce this chapter. The department may conduct investigations or request other state, county or local officials to conduct investigations and promulgate such rules and regulations as may be necessary for the enforcement of this chapter. The department may establish monetary fines and collect such fines as necessary for the enforcement of such rules and regulations. All fines collected shall be deposited in the Special Insurance Department Fund for the operation of that agency.
(4) Each license issued hereunder shall expire annually on the last day of May, unless revoked or suspended prior thereto by the department, or upon notice served upon the commissioner by the insurer that the authority of a limited surety agent to act for or in behalf of such insurer had been terminated, or upon notice served upon the commissioner by a professional bail agent that the employment of a soliciting bail agent or bail enforcement agent had been terminated by such professional bail agent.
(5) The department shall prepare and deliver to each licensee a certificate showing the name, address and classification of such licensee, and shall certify that the person is a licensed professional bail agent, being either a personal surety agent or a limited surety agent, a soliciting bail agent or a bail enforcement agent. In addition, the certificate, if for a soliciting bail agent or bail enforcement agent, shall show the name of the professional bail agent and any other information as the commissioner deems proper.
(6) The commissioner, after a hearing under Section 83-39-17, may refuse to issue a privilege license for a soliciting bail agent to change from one professional bail agent to another if he owes any premium or debt to the professional bail agent with whom he is currently licensed. The commissioner, after a hearing under Section 83-39-17, may refuse to issue a license for a limited surety agent if he owes any premium or debt to an insurer to which he has been appointed.
(7) From and after May 1, 2006, prior to the issuance of any professional bail agent, soliciting bail agent or bail enforcement agent license, the applicant shall submit proof of successful completion of forty (40) classroom hours of prelicensing education approved by the Professional Bail Agents Association of Mississippi, Inc., and conducted by persons or entities approved by the Professional Bail Agents Association of Mississippi, Inc. The hours required by this subsection shall be classroom hours and may not be acquired through correspondence or over the Internet.
(8) From and after May 1, 2000, prior to the renewal of any professional bail agent, soliciting bail agent or bail enforcement agent license, the applicant shall submit proof of successful completion of eight (8) classroom hours of continuing education approved by the department and the Professional Bail Agents Association of Mississippi, Inc., and provided by persons or entities approved by the Professional Bail Agents Association of Mississippi, Inc. The hours required by this subsection shall be classroom hours and may not be acquired through correspondence or over the Internet.
(9) All bail agents shall comply with the provisions of Section 1 of this act.
SECTION 3. Section 83-39-15, Mississippi Code of 1972, is amended as follows:
83-39-15. (1) The department may deny, suspend, revoke or refuse to renew, as may be appropriate, the license of any person engaged in the business of professional bail agent, soliciting bail agent, or bail enforcement agent for any of the following reasons:
(a) Any cause for which the issuance of the license would have been refused had it then existed and been known to the department.
(b) Failure to post a qualification bond in the required amount with the department during the period the person is engaged in the business within this state or, if the bond has been posted, the forfeiture or cancellation of the bond.
(c) Material misstatement, misrepresentation or fraud in obtaining the license.
(d) Willful failure to comply with, or willful violation of, any provision of this chapter or of any proper order, rule or regulation of the department or any court of this state.
(e) Conviction of felony or crime involving moral turpitude.
(f) Default in payment to the court should any bond issued by such bail agent be forfeited by order of the court.
(g) Being elected or employed as a law enforcement or judicial official.
(h) Engaging in the practice of law.
(i) Writing a bond for a person arrested by a spouse or the law enforcement entity which a spouse serves as a law enforcement official or employee.
(j) Giving legal advice or a legal opinion in any form.
(k) Failure to comply with the provisions of Section 1 of this act.
(2) In addition to the grounds specified in subsection (1) of this section, the department shall be authorized to suspend the license, registration or permit of any person for being out of compliance with an order for support, as defined in Section 93-11-153. The procedure for suspension of a license, registration or permit for being out of compliance with an order for support, and the procedure for the reissuance or reinstatement of a license, registration or permit suspended for that purpose, and the payment of any fees for the reissuance or reinstatement of a license, registration or permit suspended for that purpose, shall be governed by Section 93-11-157 or 93-11-163, as the case may be. If there is any conflict between any provision of Section 93-11-157 or 93-11-163 and any provision of this chapter, the provisions of Section 93-11-157 or 93-11-163, as the case may be, shall control.
SECTION 4. Section 99-5-5, Mississippi Code of 1972, is amended as follows:
99-5-5. (1) All bonds and recognizances taken for the appearance of any party, either as defendant, prosecutor, or witness in any criminal proceeding or matter, shall be made payable to the state, shall be secured by an insurance company and shall have the effect to bind the accused and his sureties on the bond or recognizance until the principal shall be discharged by due course of law, and shall be in full force, from term to term, for a period of three (3) years, except that a bond returnable to the Supreme Court shall be in full force for a period of five (5) years. If it is necessary to renew a bond, it shall be renewed without additional premium. At the end of the applicable period, a bond or recognizance that is not renewed shall expire and shall be uncollectible unless the collection process was started on or before the expiration date of such bond or recognizance. Any bond or recognizance taken prior to July 1, 1996, shall expire on July 1, 1999. If a defendant is charged with multiple counts in one (1) warrant only one (1) bond shall be taken.
(2) A bond written through a surety company shall comply with the provisions of Section 1 of this act.
SECTION 5. Section 99-5-7, Mississippi Code of 1972, is amended as follows:
99-5-7. Bail may be given to the sheriff or officer holding the defendant in custody, by a fidelity or surety insurance company authorized to act as surety within the State of Mississippi. Any such company may execute the undertaking as surety by the hand of officer or attorney authorized thereto by a resolution of its board of directors, a certified copy of which, under its corporate seal, shall be on file with the clerk of the circuit court and the sheriff of the county, and such authority shall be deemed in full force and effect until revoked in writing by notice to said clerk and sheriff. Bail written through a surety company shall comply with the provisions of Section 1 of this act.
SECTION 6. Section 87-5-1, Mississippi Code of 1972, is brought forward as follows:
87-5-1. Any person bound as surety or accommodation indorser for another, may, at any time after the debt has become due or liability been incurred, give notice in writing to the creditor to commence and prosecute legal proceedings against the principal debtor, if living and resident within this state, for the recovery of the debt; and if the creditor fails to commence legal proceedings by the next term of the court in which the same shall be instituted, to be held after the expiration of thirty (30) days from the giving of the notice, and to prosecute the same to effect, the surety who shall have given the notice shall be discharged from liability. It shall not be lawful to plead or to give in evidence under this section a notice not in writing, and any act of the creditor shall not be a waiver of notice in writing as herein required.
SECTION 7. Section 87-5-3, Mississippi Code of 1972, is brought forward as follows:
87-5-3. When any person who is bound as surety or indorser for another on any writing, for the payment of money or other thing, which shall remain unpaid, in whole or in part, by the principal debtor, after the maturity thereof, shall pay or tender to the creditor or holder of such writing the amount due thereon, the creditor or holder shall assign such writing to the surety or indorser paying or tendering the money or other thing due; and such assignee may have an action in his own name against the principal debtor upon the writing, to recover the amount paid in satisfaction of it.
SECTION 8. Section 87-5-5, Mississippi Code of 1972, is brought forward as follows:
87-5-5. When any surety or guaranty company has executed any bond or other contract as surety for any person, company or corporation, guaranteeing the performance of any duty or the payment of any money, and such person, company or corporation make default therein and said surety or guaranty company pays the amount for which the party insured or guaranteed is legally liable, the said surety or guaranty company becomes thereby subrogated to all the rights of the party in whose favor the security or guaranty is given, and such company may have and maintain an action against the principal in its own name to recover the amount paid out in satisfaction thereof.
SECTION 9. Section 87-5-7, Mississippi Code of 1972, is brought forward as follows:
87-5-7. A surety or indorser shall not suffer judgment or a decree to be rendered against him by confession or default, without the consent of the principal debtor. And a surety or indorser who shall be sued alone, shall give notice of the suit to the principal debtor, if resident in this state, and if he have knowledge or information of any defense to the action which the principal debtor has, he shall make such defense; and if a surety or indorser, when sued alone, fail to give such notice to the principal debtor, in case he be a resident of this state, or to make such defense in the action of which he has knowledge or information, he shall be barred of all recovery against the principal debtor in case the principal debtor have at the time a good defense to the action of the creditor.
SECTION 10. Section 87-5-9, Mississippi Code of 1972, is brought forward as follows:
87-5-9. If a judgment or decree be rendered by any court against a principal debtor and his surety, or against his sureties, and one or more of his sureties shall pay and satisfy the judgment or decree, the same shall, by operation of law, be thereby transferred and assigned to the surety or sureties paying and satisfying it, who shall have all the liens and equities of such judgment or decree and of the debt or claim on which the same is founded, which the creditor therein had. The surety, on making affidavit of his suretyship, and of his having paid the judgment or decree, and filing the affidavit and any evidence of such payment that he may hold, with the officer authorized to issue execution on the judgment or decree to whom he may apply for execution, shall be entitled to have execution issued on the judgment or decree, in the name of the plaintiff or complainant against the defendants therein, as if the judgment or decree had not been paid and satisfied. The officer issuing the execution shall indorse thereon that it is issued for the use of the surety who paid the judgment or decree; and the officer serving it shall collect the money, for the use of the surety, from the principal debtor, if he be a party to the judgment or decree and the money can be made out of him; and, if not, he shall collect a ratable proportion of the money from each of the cosureties.
SECTION 11. Section 87-5-11, Mississippi Code of 1972, is brought forward as follows:
87-5-11. If such judgment or decree as is referred to in Section 87-5-9 shall appear to be satisfied, either on the judgment-roll, execution docket, or other record, property conveyed or encumbered thereafter by the principal debtor or sureties to any one for a valuable consideration, without notice of the fact that it was paid and satisfied by a surety, shall not be liable to such judgment or decree, unless at the time the property was conveyed or encumbranced, the record which showed the satisfaction of the judgment or decree, shall also show the fact that it was paid and satisfied by a surety, and the name of such surety.
SECTION 12. Section 87-5-13, Mississippi Code of 1972, is brought forward as follows:
87-5-13. When execution shall issue on any judgment or decree rendered against a principal and surety, and the surety shall make affidavit that he is only surety on the instrument upon which the judgment or decree is founded, and deliver it to the officer serving the execution, the officer shall make the money, or as much thereof as possible, out of the property of the principal debtor, if he have any in the county to which the execution is issued subject to execution; and the officer shall return the affidavit with the execution.
SECTION 13. Section 83-27-1, Mississippi Code of 1972, is brought forward as follows:
83-27-1. Any company incorporated and organized under the laws of any state of the United States for the purpose of transacting business as surety on obligations of persons or corporations, which has complied with all the requirements of this chapter may be accepted as surety in part, or as sole surety, upon the bond of any person, officer or corporation required by the laws of this state to execute a bond or bonds. Such company may be substituted as sole surety or as cosurety for a surety or sureties on bonds already given, and may be released from liability on the same terms and conditions as are by law prescribed for the substitution and release of individuals as sureties. Where a surety company subscribes to a bond, it shall not be necessary that there shall be additional sureties. In all cases where such company shall become surety for part only of any bond, its liability on such bond shall be limited to the amount for which it becomes surety. All surety companies shall possess the capital and surplus requirements as required in Sections 83-19-31 and 83-21-3.
SECTION 14. Section 83-27-3, Mississippi Code of 1972, is brought forward as follows:
83-27-3. Before such company shall be accepted as surety, it shall produce to the judge, head of department, or other officer authorized to approve such bond satisfactory evidence of its compliance with and fulfillment of all the requirements of this chapter.
SECTION 15. Section 83-27-5, Mississippi Code of 1972, is brought forward as follows:
83-27-5. No such company shall be accepted as surety unless the amount of at least One Hundred Thousand Dollars ($100,000.00) of its said paid-up capital is invested in solvent securities created by the laws of the United States or of the State of Mississippi or by or under the laws of the state by which such company is incorporated, or in other safe securities the value of which, at the time of such acceptance, shall be at or above par and which are deposited with the Insurance Commissioner, Auditor, Comptroller, or Chief Financial Officer of the state under whose laws such company is incorporated, and the Commissioner of Insurance of this state is furnished with the certificate of such Commissioner, Auditor, Comptroller, or Officer, under his hand and official seal that he, as said Insurance Commissioner, Auditor, Comptroller, or Chief Financial Officer of said state holds the said securities in trust and on deposit for the benefit of such obligees of such company, which certificate shall describe the items of security so held and shall state that he is satisfied they are worth One Hundred Thousand Dollars ($100,000.00).
SECTION 16. Section 83-27-7, Mississippi Code of 1972, is brought forward as follows:
83-27-7. Every person who shall so represent any such company as to receive or transmit applications for suretyship, or to receive for delivery bonds founded on applications from this state, or otherwise to procure suretyship to be effected by said company upon the bonds of persons or corporations in this state, or upon bonds given to persons or corporations in this state, shall be deemed as an agent for such company. No person shall act as agent for such company until such company shall have complied with all of the requirements of this chapter, under penalty of a fine of One Thousand Dollars ($1,000.00).
SECTION 17. Section 83-27-9, Mississippi Code of 1972, is brought forward as follows:
83-27-9. No company shall be accepted as surety on any bond for an amount larger than one tenth (1/10) of the company's paid-up capital and surplus as reflected in its last annual statement, unless it shall be secured from loss beyond such amount by reinsurance in an authorized company or by the amount of any cosuretyship, provided such reinsurance or cosurety shall not exceed the limits set forth herein for the prime surety, or by the value of any security deposited, pledged, or held subject to the company's consent and for its protection.
SECTION 18. Section 83-27-11, Mississippi Code of 1972, is brought forward as follows:
83-27-11. Any company who shall execute any bond as surety shall, in any proceeding to enforce the liability which it shall have assumed to incur, be estopped to deny its corporate power to execute such instrument or assume such liability. Nor shall any failure to comply with any or all of the provisions of this chapter avail said company as a defense in any such proceedings.
SECTION 19. This act shall take effect and be in force from and after July 1, 2007.