HF 4855

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/11/2024 02:15pm

A bill for an act
relating to insurance; regulating sureties, supervising bail bond agencies, surety
bail bond producers, and bail bond enforcement agents; amending Minnesota
Statutes 2022, section 629.63; proposing coding for new law as Minnesota Statutes,
chapter 60M.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [60M.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For the purposes of this chapter, the terms defined in this section
have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 3. new text end

new text begin Disqualifying offense. new text end

new text begin "Disqualifying offense" means: (1) a felony; or (2) a
gross misdemeanor if an element of the offense involves dishonesty or misappropriation of
money or property.
new text end

new text begin Subd. 4. new text end

new text begin Estreatment or estreature. new text end

new text begin "Estreatment" or "estreature" means the enforcement
of a forfeiture of a bail bond due to a failure of the principal to comply with a lawful
appearance in court and the court order forfeiting the bail bond.
new text end

new text begin Subd. 5. new text end

new text begin Insurer. new text end

new text begin "Insurer" means any domestic, foreign, or alien insurance company
that is licensed to transact surety business in Minnesota under section 60A.06.
new text end

new text begin Subd. 6. new text end

new text begin License. new text end

new text begin "License" means a surety bail bond producer license issued under
chapter 60K by the commissioner to a qualified individual, as provided in this chapter.
new text end

new text begin Subd. 7. new text end

new text begin Negotiate. new text end

new text begin "Negotiate" means the act of conferring directly with or offering
advice directly to a purchaser or prospective purchaser of a particular insurance contract
concerning any of the substantive benefits, terms, or conditions of the contract if the person
engaged in the act either sells insurance or obtains insurance from insurers for purchasers.
new text end

new text begin Subd. 8. new text end

new text begin Sell. new text end

new text begin "Sell" means to exchange on behalf of an insurance company an insurance
contract by any means for money or its equivalent.
new text end

new text begin Subd. 9. new text end

new text begin Supervising bail bond agency. new text end

new text begin "Supervising bail bond agency" means any
agency contracted by an insurer to supervise or otherwise manage the bail bond business
written in Minnesota by surety bail bond producers appointed by the insurer.
new text end

new text begin Subd. 10. new text end

new text begin Solicit. new text end

new text begin "Solicit" means: (1) any written or printed presentation or advertising
made by mail or other publication which implies that an individual is licensed under this
chapter; (2) an oral presentation or advertising in person or by means of telephone, radio,
or television, which implies that an individual is licensed under this chapter; (3) an activity
in arranging for bail which results in compensation or anything of value to the individual
conducting that activity; or (4) an attempt to sell or ask or urge a person to apply for a bail
bond from an insurer.
new text end

new text begin Subd. 11. new text end

new text begin Surety bail bond producer. new text end

new text begin "Surety bail producer" means any person licensed
under this chapter that works for a supervising bail bond agency and is appointed by an
insurer to execute or countersign bail bonds for the insurer in connection with judicial
proceedings.
new text end

Sec. 2.

new text begin [60M.02] LICENSURE; GENERAL REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin An insurer is prohibited from executing an undertaking of
bail in Minnesota except by and through a surety bail bond producer holding a license issued
under this chapter.
new text end

new text begin Subd. 2. new text end

new text begin License required; discipline. new text end

new text begin (a) A person is prohibited from selling, soliciting,
or negotiating to execute or deliver an undertaking of bail or bail bond on behalf of an
insurer, or execute or deliver an undertaking of bail or bail bond on behalf of an insurer,
unless the person is licensed as provided in this section and chapter 60K.
new text end

new text begin (b) A person engaged in law enforcement or vested with police powers is prohibited
from being licensed as a surety bail bond producer.
new text end

new text begin (c) In addition to the department's authority under chapters 45 and 60K, a person who
violates this subdivision is guilty of a gross misdemeanor.
new text end

new text begin Subd. 3. new text end

new text begin Bail bonds; license required. new text end

new text begin (a) Only natural persons who are licensed under
this chapter may execute bail bonds. A license does not create any actual, apparent, or
inherent authority for the holder to represent or commit an insurance carrier.
new text end

new text begin (b) A supervising bail bond agency must be licensed as a business insurance producer
under 60K.37, subdivision 3. A supervising bail bond agency desiring to execute an
undertaking of bail in Minnesota must do so by and through a person holding a surety bail
bond producer license issued under this chapter. Any supervising bail bond agency doing
business under a name other than a surety bail bond producer's legal name must provide
the commissioner with documentation that the assumed name has been properly filed with
the secretary of state before the bail bond agency uses the assumed name.
new text end

new text begin Subd. 4. new text end

new text begin New license application. new text end

new text begin A person desiring to act as a surety bail bond producer
in Minnesota must submit a written application in the form prescribed by the commissioner.
Each application must be signed by the applicant and must be accompanied by a
nonrefundable filing fee in the amount provided under section 60K.55. The applicant must
also comply with the criminal history and background check requirements under section
60K.37, subdivision 2a.
new text end

new text begin Subd. 5. new text end

new text begin Insurer appointment. new text end

new text begin (a) Every surety and every surety bail bond producer
is subject to the appointment requirements under section 60K.49.
new text end

new text begin (b) An appointment of a person as a surety bail bond producer by an insurer under
paragraph (a) constitutes certification by the insurer that, to the best of the insurer's
knowledge and belief, the person is competent, meets the licensing requirements established
by the commissioner, and is suitable to serve as the insurer's representative. A person is
prohibited from representing to the public that the person has the authority to represent an
insurer as the insurer's surety bail bond producer until the person has been appointed an
agent by an insurer under this section.
new text end

new text begin (c) Each appointment, by its terms, continues in force until: (1) the surety bail bond
producer's license is inactive for any reason; (2) the insurer or the insurer's representative
files a notice of termination with the commissioner; or (3) the surety bail bond producer
files a notice of termination with the commissioner.
new text end

new text begin (d) Prior to appointment by the insurer and at each subsequent license renewal, a surety
bail bond producer must sign an affidavit of compliance, as developed and adopted by the
commissioner, limited to acknowledging that the surety bail bond producer is familiar with
and continually complies with the conditions established in this chapter. Completed affidavits
of compliance must be held by the insurer and must be sent to the Department of Commerce
within ten days of the date a request is received.
new text end

new text begin Subd. 6. new text end

new text begin Construction. new text end

new text begin Unless specifically governed by provisions in this chapter, the
requirements of chapter 60K continue to apply to all insurers, supervising bail bond agencies,
and surety bail bond producers.
new text end

new text begin Subd. 7. new text end

new text begin Notice; status changes. new text end

new text begin Each surety bail bond producer or surety bail bond
agency must provide written notice no later than 30 days after a change, proceeding, action,
or order:
new text end

new text begin (1) to the commissioner, the appointing insurer, and the supervising bail bond agency
of a change in the surety bail bond producer's business name, principal business address,
telephone number, or e-mail address;
new text end

new text begin (2) to the commissioner of a change in the surety bail bond producer's name, residence
address, telephone number, or e-mail address; and
new text end

new text begin (3) to the commissioner of (i) any bankruptcy proceeding in Minnesota or another state
concerning the surety bail bond producer, or (ii) any administrative action taken or any
administrative order entered against the producer in Minnesota or another state.
new text end

new text begin Subd. 8. new text end

new text begin Notice; disqualifying offenses. new text end

new text begin The insurer, supervising bail bond agency, or
surety bail bond producer must notify the commissioner in writing not later than 30 days
after receiving notice or learning that a surety bail bond producer has been arrested for,
charged with, pleaded guilty or nolo contendere to, or been found guilty of a disqualifying
offense in Minnesota or an offense in any other state for which the essential elements are
substantially the same as a disqualifying offense, whether judgment was entered or withheld
by a court.
new text end

Sec. 3.

new text begin [60M.03] SURETY BAIL BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Authorized premium. new text end

new text begin A surety bail bond producer is prohibited from
executing a bail bond without charging the premium provided under the surety's rate filing
with the commissioner. The minimum premium charged on any bond is $100.
new text end

new text begin Subd. 2. new text end

new text begin Fees for services. new text end

new text begin A surety bail bond producer is prohibited from charging a
fee for any services rendered in connection with the solicitation, negotiation, or servicing
of any bail bond contract unless:
new text end

new text begin (1) before rendering the services a written statement is provided, disclosing:
new text end

new text begin (i) the services for which fees are charged;
new text end

new text begin (ii) the amount of the fees;
new text end

new text begin (iii) that the fees are charged in addition to premiums; and
new text end

new text begin (iv) that premiums include a commission; and
new text end

new text begin (2) all fees charged are reasonable in relation to the services rendered.
new text end

new text begin Subd. 3. new text end

new text begin Insurer audits. new text end

new text begin (a) An insurer must annually audit for the period from January
1 to December 31 each of the insurer's appointed surety bail bond producers to ensure each
producer has complied with this chapter's requirements regarding premium charged, premium
collected, the existence and amount of the promissory note or other security, the surety bail
bond producer's collection efforts, and collateral taken by the surety bail bond producer.
The commissioner must develop and adopt an insurer audit template no later than 60 days
following the enactment of this act. The insurer must complete the audit template as part
of the annual audit. Not later than June 30 each year, an insurer must notify the commissioner
if any surety bail bond producer failed to comply with this chapter's requirements regarding
premium charged, premium collected, the existence and amount of the promissory note or
other security, the surety bail bond producer's collection efforts, and collateral taken by the
surety bail bond producer during the previous calendar year. The notice must include the
name of the surety bail bond producer and details regarding the surety bail bond producer's
failure to comply with the requirements.
new text end

new text begin (b) The annual audit required by this subdivision must include a review of an adequate
sample of bonds written by each surety bail bond producer. An adequate sample consists
of the lesser of 12 bonds or 20 percent of the bonds written by each producer. If the surety
bail bond producer has written less than 24 bonds, all bonds must be audited.
new text end

new text begin (c) The audit sample must include the four largest and four smallest bonds written by
the surety bail bond producer. Of the remaining bonds audited, to the extent the quantity of
bonds supports the percentage, 50 percent must be randomly selected bonds with a penal
sum of $12,000 or less, and the remaining 50 percent with a penal sum of over $12,000.
new text end

new text begin (d) The audit must be conducted at either the bail bond surety producer's or supervising
bail bond agency's office, depending on the location of the files. The audit may be done
electronically by the insurer if the surety bail bond producer's and supervising bail bond
agency's files are stored electronically and cannot be altered once they are stored, and the
surety has access to the complete records. The insurer must not disclose to the surety bail
bond producer or the supervising bail bond agency, or anyone affiliated with the surety bail
bond producer or the supervising bail bond agency, the files included in the insurer's audit
until the insurer's on-site audit begins.
new text end

new text begin (e) For each bond audited, the insurer must confirm:
new text end

new text begin (1) the proper premium was charged and collected. Confirmation of premium collection
includes a review of the premium account statements and deposit slips;
new text end

new text begin (2) a proper premium receipt is in the bail bond surety producer's file;
new text end

new text begin (3) a proper promissory note was executed at the time the bond was sold if the full
premium was not paid before the bond was posted;
new text end

new text begin (4) that suit was filed if the premium was not paid as required under section 60M.04;
and
new text end

new text begin (5) that reasonable efforts were made to (i) serve a summons and complaint; (ii) enter
judgment, unless the matter was settled while the suit was pending; and (iii) enforce the
judgment by docketing the judgment with the district court.
new text end

new text begin (f) In addition to the audit required under this section, the annual audit required under
this subdivision must include a follow-up review of each bond audited the prior year for
which the full premium had not been collected at the time of the final audit. For each bond
in the follow-up review, the insurer must confirm, through a review of the premium account
and deposit slips, that the full premium was collected or if full payment was not received,
that the required suit was filed and reasonable efforts were made to (1) serve the summons
and complaint, (2) enter judgment, unless the matter was settled while the suit was pending,
and (3) enforce the judgment. Nothing in this section precludes the commissioner or the
commissioner's designated producer from auditing some or all of a surety bail bond producer's
or supervising bail bond agency's files.
new text end

new text begin (g) An insurer must conduct an annual audit of every surety bail bond producer's and
supervising bail bond agency's collateral security records. The insurer must sample the
lesser of 12 bonds that were secured by collateral security or 20 percent of all bonds secured
by collateral security. The audit under this paragraph must include:
new text end

new text begin (1) confirmation the surety bail bond producer or supervising bail bond agency maintained
a collateral security log that lists (i) the power of attorney number; (ii) the defendant's name;
(iii) the depositor's name; (iv) the cash collateral amount, including information indicating
whether the cash collateral is being held in an interest bearing account for the benefit of the
collateral owner; (v) a detailed description of the collateral, if the collateral is not cash; (vi)
the date the collateral was taken; and (vii) the dates the collateral was sent to the insurer,
returned to the depositor, liquidated, or applied to any loss or costs incurred by the surety
bail bond producer, supervising bail bond agency, or insurer;
new text end

new text begin (2) that a cash collateral security trust account exists;
new text end

new text begin (3) that the balance of cash collateral security shown on the collateral security log equals
the amount held in the collateral security trust account; and
new text end

new text begin (4) that a collateral security receipt exists.
new text end

new text begin Subd. 4. new text end

new text begin Executed bail bonds; certification. new text end

new text begin Not later than June 30 each year, an insurer
must file with the commissioner a statement certifying the total amount of bail bonds
executed by the insurer and the total amount of premiums charged by the insurer on the bail
bonds in the preceding calendar year.
new text end

new text begin Subd. 5. new text end

new text begin Construction; limitation. new text end

new text begin Nothing in this section prohibits or limits a premium
financing arrangement that complies with section 60M.04.
new text end

Sec. 4.

new text begin [60M.04] PREMIUM FINANCING ARRANGEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin A surety bail bond producer may, with approval of the surety
by which the surety bond producer is appointed, enter into a premium financing arrangement
with a principal or any indemnitor in which the surety bail bond producer extends credit to
the principal or indemnitor for bail bonds with a penal sum of $3,000 or more. Premium
financing arrangements are prohibited for a bail bond with a penal sum that is less than
$3,000.
new text end

new text begin Subd. 2. new text end

new text begin Requirements. new text end

new text begin (a) If a court sets cash bail as 15 percent or less of the penal
amount of the bond, a surety, supervising bail bond agency, or principal may charge a
premium as low as 50 percent of the cash bail amount set by the court, subject to a minimum
premium of $100. In order to charge the premium authorized in this paragraph, the premium
structure must be included in the surety's rate filing with the commissioner. The supervising
bail bond agency and principal are required to obtain documentation from the court that
specifies the cash bail amount set by the court and must maintain the documentation in the
bond file. Paragraphs (b) and (c) apply to payment of the premium under this paragraph.
The bail bond agency and surety bail bond producer must maintain a log of all bonds where
the premium charged was based on this paragraph, consistent with the surety's filed rates.
new text end

new text begin (b) A surety bail bond producer may enter into a premium financing arrangement on
behalf of the surety for any bail bond with a penal sum of $3,000 or more. For bonds with
a penal sum of $3,000 to $10,000, the principal on the bail bond or any indemnitor must
make a minimum down payment of 50 percent of the premium owed under the surety's rate
filing approved by the commissioner. For bonds with a penal sum greater than $10,000, the
principal on the bail bond or any indemnitor must make a minimum down payment of 30
percent of the premium owed under the surety's rate filing approved by the commissioner.
new text end

new text begin (c) The promissory note must provide that the balance must be paid no later than 360
days after the date the bail bond is executed. The promissory note may allow for (1) an
annual interest rate of no more than six percent, and (2) the actual costs of collection and
reasonable attorney fees in the event of a default.
new text end

new text begin (d) If the balance has not been paid in full to the surety bail bond within 90 days after
the due date, the supervising bail bond agency or surety bail bond producer must, within
20 days after the due date, file civil court action or refer the matter for collection to a licensed
collection agency.
new text end

new text begin (e) The supervising bail bond agency or surety bail bond producer, either directly or
through a licensed collection agency, must make a diligent effort to recover the amount
owed by obtaining a judgment after filing a complaint unless good cause is shown for the
failure to obtain judgment, including a bankruptcy filing by the principal or the indemnitor,
failure to serve process despite good faith efforts, the matter is settled while the action was
pending, or any other reason that has received prior approval from the commissioner.
new text end

Sec. 5.

new text begin [60M.05] PREMIUMS; TRUST FUNDS.
new text end

new text begin All premiums, including any part of a premium that a surety bail bond producer is
obligated to return to a principal or indemnitor, and other funds belonging to insurers or
others that are received by a surety bail bond producer in performing the producer's duties
as a surety bail bond producer are deemed trust funds received by the producer in a fiduciary
capacity. The producer must account for and pay the same to the insurer or persons entitled
to the funds pursuant to the surety bail bond producer's contract with the insurer or
supervising bail bond agency. Fees, expenses, or charges of any kind must not be deducted
from any premium the surety bail bond producer is obligated to return to a principal or
indemnitor, except as authorized under sections 60M.03 to 60M.12. The insurer, supervising
bail bond agency, and surety bail bond producer must accept only cash, money orders,
checks, wire transfers, electronic funds transfers, debit cards, prepaid cash cards, and credit
cards for premium payments, with any balance owed evidenced by a promissory note that
is approved by the insurer.
new text end

Sec. 6.

new text begin [60M.06] RECORDS.
new text end

new text begin A surety bail bond producer and supervising bail bond agency must keep and make
available all books, accounts, and records of surety bail bonds executed or countersigned
by the producer for at least three years after the insurer's liability has been terminated.
Records that are preserved by photographic, electronic, or digital reproduction, or records
that are in photographic, electronic, or digital form, comply with this section if the record
is legible and cannot be altered once it is stored. A surety bail bond producer's and supervising
bail bond agency's records must be available to a Department of Commerce authorized
representative, an authorized representative of the insurer, or a supervising bail bond agency
at all times for examination, inspection, and photographic, electronic, or digital reproduction.
The commissioner may require a surety bail bond producer and supervising bail bond agency
to furnish to the Department of Commerce at any time any information, in the manner or
form as the commissioner may require, concerning the surety bail bond producer's or
supervising bail bond agency's surety bail bond business. A surety bail bond agent or
supervising bail bond agency that receives a request for information under this section must
provide the information within a reasonable time period. This section is in addition to the
commissioner's authority under chapters 45, 60A, and 60K.
new text end

Sec. 7.

new text begin [60M.07] ACCOUNTS.
new text end

new text begin (a) The surety, supervising bail bond agency, and surety bail bond producer must accept
only cash, money orders, checks, wire transfers, electronic funds transfers, debit cards,
prepaid cash cards, and credit cards for premium payments, with any balance owed evidenced
by a promissory note as authorized under section 60M.04, subdivision 2, paragraphs (b)
and (c).
new text end

new text begin (b) A supervising bail bond agency must maintain a trust account pursuant to the
supervising bail bond agency's contract with the insurer.
new text end

new text begin (c) The insurer or supervising bail bond agency must deposit funds received from the
surety bail bond producer in the trust account within seven business days of a bond being
posted or a payment being made on a premium promissory note. The surety bail bond
producer must deposit the funds received directly into a trust account maintained by the
surety bail bond producer. Interest earned on any deposits accrues to the surety bail bond
producer.
new text end

new text begin (d) The only funds that may be deposited into a trust account are premium payments,
travel-related fees, or other fees that are reasonable in relation to the service provided and
that were disclosed to the customer in advance, as required under section 60K.46, subdivision
2.
new text end

new text begin (e) Each deposit into a trust account must be accompanied by a deposit slip that separately
designates the source of the deposit and specifically lists the power of attorney number used
for the bond the premium was collected for.
new text end

new text begin (f) Withdrawals from a surety bail bond producer's trust account must be made only to:
new text end

new text begin (1) pay the insurer or supervising bail bond agency the net premium, defined as premium
less commission as agreed to in advance and in writing between the surety bail bond producer
and the insurer or the supervising bail bond agency;
new text end

new text begin (2) pay the insurer or supervising bail bond agency any required build up fund or escrow
account pursuant to the contract between the surety bail bond producer and the insurer or
the supervising bail bond agency;
new text end

new text begin (3) pay the surety bail bond producer any travel-related or other fees that have been
collected and that are reasonable in relation to the service provided and disclosed in advance
to the customer in accordance with section 60K.46, subdivision 2;
new text end

new text begin (4) pay to the surety bail bond producer any fees or charges deducted electronically by
credit card processing vendors, provided the fees or charges are reasonable in relation to
the service provided and were disclosed to the customer in advance, as required under
section 60K.46, subdivision 2; and
new text end

new text begin (5) distribute any excess amounts to the surety bail bond producer's operating account.
new text end

new text begin (g) The account must be open to inspection and examination by the Department of
Commerce at all times. The insurer, supervising bail bond agency, and surety bail bond
producer must maintain an accurate accounting of all accounts.
new text end

Sec. 8.

new text begin [60M.08] SURETY BAIL BOND PRODUCER; COLLATERAL SECURITY;
GENERALLY.
new text end

new text begin Subdivision 1. new text end

new text begin Collateral security; indemnity. new text end

new text begin A surety bail bond producer may receive
collateral security consisting of cash, property, or other indemnity on a bail bond, if approved
by the insurer.
new text end

new text begin Subd. 2. new text end

new text begin Requirements. new text end

new text begin A surety bail bond producer, supervising bail bond agency, or
an insurer who receives collateral security or other indemnity on a bail bond must comply
with all of the following requirements:
new text end

new text begin (1) the collateral security or other indemnity must be reasonable in relation to the amount
of the bail bond;
new text end

new text begin (2) the collateral security or other indemnity must not be used by the surety bail bond
producer for personal benefit or gain, and must be returned in the same condition as received;
new text end

new text begin (3) acceptable forms of collateral security or other indemnity include cash or its
equivalent, a promissory note, an indemnity agreement, a real property mortgage in the
name of the insurer, any Uniform Commercial Code filing, or other collateral security with
the insurer's documented prior approval;
new text end

new text begin (4) the surety bail bond producer must provide to the person providing the collateral
security or other indemnity a written, numbered receipt that includes the date, depositor's
name and address, supervising bail bond agency's name and address, insurer's name and
address, defendant's name, bond amount, bond number, and the cash amount or a detailed
description of the collateral if not cash;
new text end

new text begin (5) the receipt must be signed by (i) the surety bail bond producer, insurer, or supervising
bail bond agency, and (ii) the individual on whose behalf the collateral is being held;
new text end

new text begin (6) the surety bail bond producer or supervising bail bond agency must hold the collateral
security or other indemnity in a fiduciary capacity and must not, prior to any forfeiture of
a bail bond, commingle the collateral security or other indemnity with any other funds or
assets the surety bail bond producer or supervising bail bond agency maintains, unless the
insurer directs the surety bail bond producer or supervising bail bond agency to collateral
security to the surety;
new text end

new text begin (7) all cash collateral must be deposited within five business days into a cash collateral
trust account maintained by the surety. All checks, money orders, wire transfers, or similar
funds transfers for collateral must be made payable to the surety or, at the discretion of the
surety, made payable to the supervising bail bond agency and deposited into the surety's or
supervising bail bond agency's collateral account within ten business days of the date the
payment is received. When required by law, the bail bond agency or producer must (i) file
an IRS Form 8300, (ii) file an informational notice, and (iii) retain copies of the filings
under items (i) and (ii) in the bail bond agency's or producer's files;
new text end

new text begin (8) at the discretion of the surety, the surety or supervising bail bond agency must
maintain a separate cash collateral trust account, which may be interest bearing. If the cash
collateral trust account is interest bearing, all interest earned accrues for the benefit of the
individual for whom the collateral is being maintained;
new text end

new text begin (9) a surety bail bond producer and the supervising bail bond agency must turn over to
the insurer all collateral received or as otherwise provided in this section. At the insurer's
discretion, the insurer may permit the surety bail bond producer to turn over all collateral
received to the supervising bail bond agency and permit the supervising bail bond agency
to retain possession and control over the collateral without turning it over to the insurer. If
the insurer permits the supervising bail bond agency to retain possession and control over
the collateral, the supervising bail bond agency has the responsibilities and obligations of
the insurer set forth under this chapter. A surety bail bond producer must not be allowed to
retain possession or control of the collateral beyond the times set forth in this chapter;
new text end

new text begin (10) if the surety bail bond producer receives collateral security or other indemnity in
excess of $50,000 in cash: (i) the cash amount must be made payable to the insurer in the
form of a cashier's check, United States postal money order, certificate of deposit, or wire
or other electronic transfer; and (ii) the producer must forward within seven business days
the entire amount of the collateral security or other indemnity to the insurer;
new text end

new text begin (11) the insurer, supervising bail bond agency, or surety bail bond producer is prohibited
from taking a quit claim deed on real property as collateral for a bond;
new text end

new text begin (12) all mortgages and deeds of trust taken as collateral for a bond must name the insurer
as mortgagee or, at the discretion of the insurer, the supervising bail bond agency may be
named as the mortgagee, except that a surety bail bond producer must not be named as a
mortgagee;
new text end

new text begin (13) the insurer or supervising bail bond agency that controls the collateral must return
all collateral to the depositor named in the collateral receipt within 21 calendar days after
the depositor has provided written proof of bond discharge to the insurer or supervising bail
bond agency; provided, however, that if the depositor owes the insurer, supervising bail
bond agency, or surety bail bond producer any premium or any loss or expense related to
a breach of the bond or any terms of any indemnity or other agreement, the insurer or
supervising bail bond agency may retain from the collateral all funds required to satisfy the
depositor's debts;
new text end

new text begin (14) if all debts secured by the collateral are satisfied, the insurer or supervising bail
bond agency must file documentation within 21 calendar days after the depositor has provided
written proof of the bond discharge to the insurer or supervising bail bond agency to release
any liens, security interests, mortgages, or other interests filed or obtained in relation to the
collateral; and
new text end

new text begin (15) any action taken to enforce or foreclose upon collateral must comply with Minnesota
law.
new text end

new text begin Subd. 3. new text end

new text begin Deposit. new text end

new text begin With the insurer's prior approval, the surety bail bond producer or
supervising bail bond agency may deposit collateral security or other indemnity in an
interest-bearing account in a federally insured bank or savings and loan association in
Minnesota, to accrue for the benefit of the person providing the collateral security or other
indemnity. The surety bail bond producer, insurer, or supervising bail bond agency is
prohibited from receiving any direct or indirect pecuniary or other gain on the collateral
security or other indemnity deposited.
new text end

new text begin Subd. 4. new text end

new text begin Insurer liability. new text end

new text begin (a) The insurer is liable for all collateral security or other
indemnity received by a surety bail bond producer. If, upon final termination of liability on
a bail bond, the surety bail bond producer or supervising bail bond agency fails to return
the collateral security or other indemnity to the person who provided it, the insurer must
return the actual collateral or other indemnity to the person or, in the event that the insurer
cannot locate the collateral security or other indemnity, must pay the person the value of
the collateral security or other indemnity, less any amount owed to the producer.
new text end

new text begin (b) An insurer's liability under paragraph (a) survives the termination of the surety bail
bond agent's appointment, with respect to bail bonds executed by the surety bail bond
producer prior to the termination of the appointment.
new text end

new text begin Subd. 5. new text end

new text begin Forfeiture; conversion. new text end

new text begin (a) If a forfeiture of the bail bond occurs, the surety
bail bond producer, supervising bail bond agency, or insurer that controls the collateral must
give the person who provided the real property collateral security or other indemnity 30
days' written notice of intent to convert the collateral security or other indemnity into cash
to satisfy the forfeiture. The notice must 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.
new text end

new text begin (b) The surety bail bond producer or insurer must (1) convert the collateral security or
other indemnity into cash within a reasonable period of time, and (2) 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 to convert the
collateral security or other indemnity into cash. Expenses must not exceed ten percent of
the face value of the bail bond. If a surety bail bond producer expends more than ten percent
of the face value of the bail bond to convert the collateral security or other indemnity into
cash, the producer 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 percent of the face value of the bail bond.
new text end

new text begin Subd. 6. new text end

new text begin Certain agreements void. new text end

new text begin An agreement that violates a provision of sections
60M.03 to 60M.12 is void.
new text end

Sec. 9.

new text begin [60M.09] COLLATERAL SECURITY; TERMINATION.
new text end

new text begin (a) If collateral security or other indemnity was received on a bail bond by a surety bail
bond producer and the bond is terminated, the insurer, supervising bail bond agency, or
surety bail bond producer must return the collateral security or other indemnity, except a
promissory note or an indemnity agreement, not later than 21 days after the date a written
report from the court that the bail bond has been terminated is received. The collateral
security or other indemnity must be returned to the person who provided the collateral
security or other indemnity, unless the right to receive the return of the collateral security
or other indemnity is provided to another person by legal assignment.
new text end

new text begin (b) If, despite diligent inquiry by the insurer or supervising bail bond agency to determine
whether the bail bond has been terminated the court fails to provide any written report on
termination, the collateral security or other indemnity, except a promissory note or an
indemnity agreement, must be returned to the person who provided the collateral security
or other indemnity not later than 21 days of the date the insurer, supervising bail bond
agency, or surety bail bond producer received information that the bail bond has been
terminated, subject to any allowable fees or expenses the depositor must reimburse for
balances owed.
new text end

Sec. 10.

new text begin [60M.10] LICENSE REQUIRED.
new text end

new text begin An insurer, supervising bail bond agency, or surety bail bond producer is prohibited
from furnishing to any person any blank form, application, stationery, business card, or
other supplies to be used in the sale, solicitation, negotiation, or execution of bail bonds,
unless the person is licensed to act as a surety bail bond producer and is appointed by an
insurer. Except for a power of attorney form, a bond appearance form, or a collateral security
or other indemnity receipt, this section does not prohibit an unlicensed employee who is
under the direct supervision and control of a licensed and appointed surety bail bond producer
from possessing or working with any other form used while performing administrative
duties in the surety bail bond producer's or insurer's office, provided the unlicensed
employee's compensation is not based on the sale, solicitation, or negotiation of a bail bond
transaction.
new text end

Sec. 11.

new text begin [60M.11] SURETY BAIL BOND PRODUCER, SUPERVISING BAIL BOND
AGENCY, OR INSURER; PROHIBITIONS.
new text end

new text begin In addition to the prohibitions under section 60K.46, a surety bail bond producer or
insurer is prohibited from:
new text end

new text begin (1) suggesting or advising, directly or indirectly in exchange for a fee or other thing of
value, the employment of or name for employment of a particular attorney to represent the
principal on a bail bond;
new text end

new text begin (2) unless a request is initiated by an arrested person or potential indemnitor, directly
or indirectly soliciting business in or on the property or grounds of (i) a correctional
institution, (ii) community correctional center or other detention facility where arrested
persons are confined, or (iii) within any police station or courthouse. The prohibition under
this clause includes unsolicited telephone communications made to a correctional institution,
community correctional center or other detention facility, police station, or courthouse, but
does not include solicitations using the Internet. For purposes of this clause, "solicit" includes
the display or distribution of business cards, print or other advertising of any kind, or any
other written information directed to arrested persons or potential indemnitors. A correctional
institution, community correctional center or other detention facility where arrested persons
are confined, police station, or courthouse may permit print advertising by an insurer,
supervising bail bond agency, or surety bail bond producer in or on the property or grounds
of the institution, center or facility, police station, or courthouse, provided the advertising
is limited to (i) a listing in a telephone or other directory, or (ii) posting the supervising bail
bond agency's name or the surety bail bond producer's name, address, and telephone number
in a prominent designated location in or on the property or grounds;
new text end

new text begin (3) wearing or otherwise displaying any surety bail bond producer identification, other
than a surety bail bond agent license or surety bail bond producer identification issued or
approved by the Department of Commerce, in or on the property or grounds of a correctional
institution, community correctional center or other detention facility where arrested persons
are confined, or in or on the property or grounds of any courthouse;
new text end

new text begin (4) paying a fee or rebate, or directly or indirectly giving or promising anything of value
to a law enforcement officer, judicial marshal, employee of the Department of Corrections
or other person who has power to arrest or to hold a person in custody, or to any other public
official or public employee, to secure estreatment of bail, or a compromise, remission, or
reduction in the amount of a bail bond;
new text end

new text begin (5) paying a fee or rebate, or directly or indirectly giving or promising anything of value
to an individual person in jail, to solicit on behalf of the surety bail bond producer or
supervising bail bond agency or to secure estreatment of bail, or a compromise, remission,
or reduction in the amount of a bail bond;
new text end

new text begin (6) paying a fee or rebate, or directly or indirectly giving or promising anything of value
to an attorney in any matter pertaining to a bail bond, except in defense of any action on a
bail bond;
new text end

new text begin (7) paying a fee or rebate, or giving or promising directly or indirectly anything of value
to the principal or to any person on the principal's behalf;
new text end

new text begin (8) participating in the capacity of an attorney at a proceeding of a principal;
new text end

new text begin (9) accepting anything of value from a principal for providing a bail bond, other than
the premium approved by the commissioner under chapter 70A and an expense fee, except
that a surety bail bond agent may accept collateral security or other indemnity from a
principal or other person under section 60M.09. A surety bail bond producer may, upon
written agreement with a third party, receive a fee or other compensation for returning to
custody an individual who has fled the jurisdiction of the court or whose bail bond has been
forfeited;
new text end

new text begin (10) executing a bail bond in Minnesota on the agent's or insurer's own behalf;
new text end

new text begin (11) writing a bail bond in Minnesota for an arrested person if the arrested person or a
person with actual or apparent authority to act on behalf of the arrested person has not
authorized the surety bail bond producer, in writing, to execute a bail bond on the arrested
person's behalf. The surety bail bond producer must maintain any such written authorization;
or
new text end

new text begin (12) failing to provide timely notice of the information required under section 60M.02,
subdivision 9.
new text end

Sec. 12.

new text begin [60M.12] REPORTING.
new text end

new text begin Subdivision 1. new text end

new text begin Record retention. new text end

new text begin Each insurer, supervising bail bond agency, and each
surety bail bond producer that executes bail bonds in Minnesota must maintain the following
records by calendar year, based on the insurer's, supervising bail bond agency's, or surety
bail bond producer's Minnesota bail bond business, and upon request provide them to the
Department of Commerce within a reasonable time frame. A surety bail bond producer, or
the supervising bail bond agency on the surety bail bond producer's behalf, must maintain
separately for each insurer represented:
new text end

new text begin (1) the following records on each bond written, for a period of at least seven years after
the bond terminates:
new text end

new text begin (i) power of attorney;
new text end

new text begin (ii) the premium receipts;
new text end

new text begin (iii) the promissory note for unpaid premiums, if any;
new text end

new text begin (iv) the cash bond set by the court, if an amount less than the filed rate is accepted for
the premium;
new text end

new text begin (v) all documents related to any lawsuit filed to collect the premium;
new text end

new text begin (vi) any indemnity agreements;
new text end

new text begin (vii) collateral receipts, if any;
new text end

new text begin (viii) proof of the return of collateral, if any;
new text end

new text begin (ix) proof of bond exoneration or forfeiture payment;
new text end

new text begin (x) all records relating to the liquidation and conversion of any collateral, including fees
or costs; and
new text end

new text begin (xi) proof of any expenses incurred or losses paid by the surety, supervising bail bond
agency, or surety bail bond producer;
new text end

new text begin (2) all premium account, collateral account, and operating account bank slips, including
deposit slips, for a period of at least seven years; and
new text end

new text begin (3) any additional information the Department of Commerce may require to: (i) evaluate
the reasonableness of rates or ensure that rates are not excessive, inadequate, or unfairly
discriminatory; (ii) evaluate the financial condition or trade practices of surety bail bond
producers and insurers executing bail bonds; and (iii) evaluate the performance of the surety
bail bond producers, supervising bail bond agencies, and insurers executing bail bonds in
a manner consistent with appropriate criminal justice system goals and standards.
new text end

new text begin Subd. 2. new text end

new text begin Information submission; insurers. new text end

new text begin An insurer may designate that a surety
bail bond producer or supervising bail bond agency retain the information on the surety bail
bond producer's behalf must submit a copy of the information maintained and submitted
under subdivision 1 to each insurer the producer represents.
new text end

Sec. 13.

new text begin [60M.13] LICENSE ENFORCEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Action against licensee. new text end

new text begin The commissioner may take action against the
license of any insurer, surety bail bond producer, or supervising bail bond agency as provided
for under chapters 45 and 60K or rules promulgated under chapter 45 and 60K for any
violation of this chapter, chapter 45 or 60K, or rules promulgated under chapter 45 and 60K.
new text end

new text begin Subd. 2. new text end

new text begin Designation. new text end

new text begin Upon the surrender, suspension, or revocation of a surety bail
bond producer's license, the appointing insurer or supervising bail bond agency must
immediately designate a licensed and appointed surety bail bond producer to administer all
bail bonds previously executed by the licensee.
new text end

Sec. 14.

new text begin [60M.14] FEES.
new text end

new text begin In conjunction with the examination of any insurer, the commissioner is authorized to
charge the fees provided under sections 60A.031 and 60A.033.
new text end

Sec. 15.

new text begin [60M.15] CHANGE NOTICE.
new text end

new text begin Each supervising bail bond agency or surety bail bond producer licensed under this
chapter must inform the commissioner, in writing, of any change in the entity's or individual's
name, residence address, or telephone number not later than 30 days after the date the change
occurred.
new text end

Sec. 16.

new text begin [60M.16] VIOLATIONS.
new text end

new text begin In addition to the provisions of section 60M.13, a person whose license has been revoked
is also barred from engaging in business as a bail bond enforcement agent in Minnesota or
engaging in managing a supervising bail bond agency.
new text end

Sec. 17.

Minnesota Statutes 2022, section 629.63, is amended to read:

629.63 SURETY ARREST OF DEFENDANT.

new text begin (a) new text end If a surety believes that a defendant for whom the surety is acting as bonding agent
(1) is about to flee, (2) will not appear as required by the defendant's recognizance, or (3)
will otherwise not perform the conditions of the recognizance, the surety may arrest or have
another person or the sheriff arrest the defendant.

new text begin (b) new text end If the surety or another person at the surety's direction arrests the defendant, the
surety or the other person shall take the defendant before the judge before whom the
defendant was required to appear and surrender the defendant to that judge.

new text begin (c) new text end If the surety wants the sheriff to arrest the defendant, the surety shall deliver a certified
copy of the recognizance under which the defendant is held to the sheriff, with a direction
endorsed on the recognizance requiring the sheriff to arrest the defendant and bring the
defendant before the appropriate judge.

new text begin (d) new text end Upon receiving a certified copy of the recognizance and payment of the sheriff's
fees, the sheriff shall arrest the defendant and bring the defendant before the judge.

new text begin (e) new text end Before a surety who has arrested a defendant who has violated the conditions of
release may personally surrender the defendant to the appropriate judge, the surety shall
notify the sheriff. If the defendant at the hearing before the judge is unable to post increased
bail or meet alternative conditions of release in accordance with rule 6.03 of the Rules of
Criminal Procedure, the sheriff or a deputy shall take the defendant into custody.

new text begin (f) A person working at the direction of a surety or supervising bail bond agency to arrest
a defendant must possess a valid bail bond enforcement agent license issued under this
chapter.
new text end