DEPARTMENT OF REGULATORY AGENCIES
Division of Insurance
3 CCR 702-1
Administrative procedures
Proposed Amended Regulation 1-2-13
CASH BONDING AGENT AND PROFESSIONAL CASH BAIL AGENT REPORTING REQUIREMENTS AND TAX PAYMENT METHOD AND LICENSURE REQUIREMENTS FOR PROFESSIONAL CASH BAIL AGENTS
Section 1 Authority
Section 2 Background Scope and Purpose
Section 3 Forms, Reports and Records Applicability
Section 4 Tax on Bail Bond Fees Definitions
Section 5 Qualification Bond Forms, Reports and Records
Section 6 Qualifications for Licensure as a Professional Cash Bail Agent Tax on Bail Bond Fees
Section 7 Noncompliance and Penalties Qualification Bond
Section 8 Severability Qualification for Licensure as a Professional Cash Bail Agent
Section 9 Effective Date Procedures for Increase, Decrease and Release of Qualification Bond
Section 10 History Severability
Section 11 Enforcement
Section 12 Effective Date
Section 13 History
Section 1 Authority
This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §§10-1-109(1), C.R.S, and 12-7-102(3), C.R.S.
Section 2 Background Scope and Purpose
A. This regulation describes the information which is required to be filed by Cash Bonding Agents and Professional Cash Bail Agents with the Division of Insurance , and the format which must be used in the semiannual reports. It also describes the method for the calculation and payment of taxes on fees charged by Cash Bonding Agents and Professional Cash Bail Agents.
B. Pursuant to §12-7-103(3) and (8) C.R.S., Cash Bonding Agents and Professional Cash Bail Agents are required to post a qualification bond in the amount of $50,000 to secure payment of defaulted bonds and to pay any final, nonappealable judgment for failure to return collateral, including costs and attorney's fees, if awarded. This regulation sets the terms and conditions for such qualification bonds.
C. 1. Effective January 1, 2000, a new category of bail bonding agent known as Professional Cash Bail Agent was added to Article 7, Title 12, C.R.S. Professional Cash Bail Agents will beare licensed to transact bail bond business without posting a power-of-attorney from an authorized insurance company.
2. The Professional Cash Bail Agent designation will only be granted to agents who meet the statutory requirements for such designation.
D. This regulation also sets forth the procedures required for increase, decrease and release of the qualification bond.
Section 3 Forms, Reports And Records Applicability
This regulation shall apply to the following: any person currently licensed as a Cash Bonding Agent or a Professional Cash Bail Agent; any person seeking to renew a Cash Bonding Agent or a Professional Cash Bail Agent; any person seeking to obtain licensure as a Professional Cash Bail Agent; any Professional Cash Bail Agent seeking to increase or decrease the amount of the qualification bond and any Cash Bonding Agent or Professional Cash Bail Agent seeking the release of the qualification bond.
Section 4 Tax on Bail Bond Fees Definitions
“Commissioner of Insurance” is defined as the office of the Commissioner of Insurance as established in §10-1-104(1), C.R.S. Reference to the Commissioner of Insurance in this Regulation means any past, present, or future Commissioner of Insurance who holds said appointed office.
“Qualification bond” is defined as any minimum asset in the amount of $50,000 that is solely owned and in the legal name of the Cash Bonding Agent or Professional Cash Bail Agent and the Colorado Division of Insurance and Commissioner of Insurance that can be liquidated at any time upon request by the Commissioner of Insurance or a surety bond in the minimum amount of $50,000 that is underwritten by an insurance company duly licensed to do business in Colorado in order to underwrite the bail bond obligations of the Cash Bonding Agent or Professional Cash Bail Agent for bail bonds written in Colorado courts.
Section 5 Qualification Bond Forms Reports and Records
A. Each Cash Bonding Agent and Professional Cash Bail Agent shall report the following information to the Division of Insurance on the forms prescribed by the Division of Insurance and attached hereto as Appendix I. The reports shall be made semiannually and shall be filed with the Division of Insurance prior to July 31 for business written for the six month period between January and June, and prior to January 31 for business written during the six month period from July through December.
B. These reports shall contain the following information for each and every bond written:
1. The names of the persons for whom such bail bonding agent has become surety.;
2. The date the bond was written.;
3. The amount of the bonds issued by such bail bonding agent.;
4. The court in which such bonds werewas posted.;
5. The fee for eachthe bond charged by the bail bonding agent.
6. The amount of collateral or security received from insured principals or persons acting on behalf of such principals by such bail bonding agent on eachthe bond.;
7. Finalized total amount of premiums, commissions or fees charged.; and
8. Such further information as the Division of Insurance may require including, but not limited to, residence and business addresses, financial statements and other business activities of the bail bonding agent.
C. If a Cash Bonding Agent or Professional Cash Bail Agent did not write any bail bonds during the particular 6six (6) month reporting period, the individual mustshall file a report stating "no bonds written" during this time period.
D. All reports required to be filed in this Section 5, must be filed in electronic format either by email to: , or via facsimile to: 303-869-0228. Paper reports will not be accepted by the Division of Insurance and will be rejected and returned to the Cash Bonding Agent or Professional Cash Bail Agent with instructions for proper filing. Any paper report that is rejected must be refiled electronically and must be timely filed as required by Section 5.A. Noncompliance with this requirement may result in sanctions against the Cash Bonding Agent or Professional Cash Bail Agent as set forth in Section 11 below.
Section 6 Tax On Bail Bond Fees
A. Each Cash Bonding Agent and Professional Cash Bail Agent shall pay to the Division of Insurance a tax on the fee charged for bail. The rate of tax on the gross fee shall be one percent as set forth in §10-3-209(1)(b)(I)(B), C.R.S.. All applicable provisions of Section§ 10-3-209(1), C.R.S. shall apply to the agent.
B. The taxes provided for in §§ 10-3-209 and 12-7-111, c.r.s. and §10-3-209, C.R.S. shall be due and payable to the Division of Insurance on the first day of March in each year.
C. Cash Bonding Agents and Professional Cash Bail Agents shall file copies of the affidavit/summary pages from the bail bonding agent's January 31 and July 31 semiannual bail bond reports to the Division of Insurance with the tax payment (See appendix I).
Section 57 Qualification Bond
A. Qualification Bond Requirements for Cash Bonding Agents
1. The qualification bond deposited by a Cash Bonding Agent shall be held solely owned and in the name of the Cash Bonding Agent, the Commissioner of Insurance, and Colorado Division of Insurance, and shall meet the following requirements.
a. The Division of Insurance and Commissioner of Insurance must be designated as an authorized signatory with right of survivorship on any bank account, certification of deposit, commercial instrument, or security that funds the qualification bond. When designating the Commissioner of Insurance as an authorized signatory with right of survivorship, the office title shall only be used without reference to a particular Commissioner of Insurance.
b. The bank account, certificate of deposit, commercial instrument, or security must be in the legal name of the Cash Bonding Agent and not a trade name or other business name.
c. ThisThe qualification bond must consist of assets that are solely owned and in the name of the Cash Bonding Agent, which may be immediately liquidated by the Commissioner of Insurance or the Division of Insurance.
d. The qualification bond must be worth $50,000 net of any penalty for withdrawal or liquidation.
e. If the qualification bond does not comply with this Section 57.A.1. or 7.A.2., the Cash Bonding Agent will be required to substitute another qualification bond or to provide additional security.
f. If the qualification bond is an interest bearing instrument, the Cash Bonding Agent may receive interest thereon, unless the principal amount of the qualification bond has fallen falls below the required $50,000.
g. If the monies that fund the qualification bond consist of proceeds from a loan, promissory note or other financial arrangement, the terms of the loan, promissory note, and financial arrangement must be submitted to the Division of Insurance. If the qualification bond consists of monies from a loan, promissory note or other financial arrangement, such must be an arms-length transaction in which the agreement terminates upon a fixed period of time and any rate of return is not tied to a percentage per bail bond posted by the Cash Bonding Agent but to an annual percentage rate.
2. If the Cash Bonding Agent posts a surety bond with the Division of Insurance to satisfy the qualification bond requirement, the surety bond:
a Must be a claims made bond.
b. The Division of Insurance must be named as an additional insured on the surety bond with payment immediately made Must be payable upon demand by the Division of Insurance or Commissioner of Insurance, and with no right for the surety company to raise any defense to payment.
c. The surety bond mMay not be canceled by the surety company or the Cash Bonding Agent without thirty (30) days notice to the Division of Insurance and satisfaction of the release procedures set forth in Section 9 below. Said notice shall include affidavits, in a form provided by the Division, from the clerk of every court in which the Cash Bonding Agent has posted a cash bail bond. The affidavit shall state that the Cash Bonding Agent has no cash bail bonds outstanding in that court.
3. Cash Bonding Agents licensed with the Division of Insurance who have posted qualification bonds that complied with previous versions of Colorado Insurance Regulation 1-2-13 must provide verification that the cash qualification bond satisfies the new requirements of Section 7.A.1 or 7.A.2. above as follows:
a. At the first renewal of a Cash Bonding Agent’s license subsequent to the effective date of this Regulation, the Cash Bonding Agent must produce the following:
(1) The qualification bond form prescribed by the Division of Insurance and attached hereto as Appendix ID to this Regulation.
(2) A copy of the bank account application, certificate of deposit, or commercial instrument or actual deposit of other security or a copy of the surety bond that evidences that the qualification bond is solely owned and in the legal name of the Cash Bonding Agent and the Division of Insurance and Commissioner of Insurance and that the Division of Insurance and Commissioner of Insurance are authorized signatories on the bank account, certificate of deposit, commercial instrument, or other security with a right of survivorship or that the Division of Insurance and Commissioner of Insurance are named as additional insureds on the surety bond.
(3) A statement from the bank or other financial institution where the qualification bond is held that the bank or financial institution shall not release such funds unless upon prior written approval or order by the Division of Insurance or Commissioner of Insurance.
(4) If the monies that fund the qualification bond consist of proceeds from a loan, promissory note or other financial arrangement, the terms of the loan, promissory note, and financial arrangement must be submitted to the Division of Insurance. If the qualification bond consists of monies from a loan, promissory note or other financial arrangement, such must be an arms-length transaction in which the agreement terminates upon a fixed period of time and any rate of return is not tied to a percentage per bail bond posted by the Cash Bonding Agent but to an annual percentage rate.
b. A Cash Bonding Agent shall have sixty (60) days from the date the application for renewal is submitted to alter the qualification bond in compliance with Section 7.A.1. or 7.A.2. above. If information is not provided within sixty (60) days from the date of submission of the application for renewal, the application for renewal shall be denied on grounds the Cash Bonding Agent has not satisfied the requirements of licensure. Once information is on file with the Division of Insurance as satisfying the requirements of Section 7.A.1. or 7.A.2., the Cash Bonding Agent shall not be required to submit information on future renewal applications unless specifically requested by the Division of Insurance.
c. No release of an existing qualification bond shall be granted by the Division of Insurance in order to satisfy the requirements of Section 7.A.1. or 7.A.2. above, unless the procedures in Section 9 below are satisfied or upon a showing by the Cash Bonding Agent that the monies would not be released but merely transferred into a bank account, certificate of deposit, commercial instrument, or other security that complies with Section 7.A.1. or 7.A.2. above, as approved by the Commissioner of Insurance.