The Office of General Counsel issued the following opinion on June 23, 2003, representing the position of the New York State Insurance Department.
Re: Judicial Determination as to Sufficiency of Bail Bonds.
Does a judge have jurisdiction to deny a bail bond presented by an authorized agent of an insurer authorized to issue such bonds because there is an outstanding forfeiture pending within the county where the court is located?
Yes. N. Y. Crim. Proc. Law § 520.30 (McKinney 1995) authorizes the court to conduct an inquiry to determine whether any feature of the undertaking contravenes public policy.
The inquirers company is a bail bond agency, duly authorized to represent an authorized insurer. The inquirer wants to know if a judge can deny a bail bond presented because there is an outstanding forfeiture pending within the county where the court is located.
N. Y. Ins. Law § 6802 (McKinney 2000) provides for the licensing of a professional bail bondsman as an insurance agent.
Section 520.30 of the New York State Criminal Procedure Act gives the court broad authority to examine the bail bond, including the reliability of the obligor, and the source of any security posted or pledged to determine whether the obligation is in satisfactory form to compensate the state for default. As stated in the Practice Commentaries to the statute:
the concern of the insurance company is to be indemnified if the bail is forfeited and not whether the source of or the arrangement for indemnity somehow violates public policy or constitutes the fruits of criminal conduct. Obviously, if the court were unable to make full inquiry in the case of insurance company bonds, the payment of a bond premium would simply represent nothing more than a fee to enable a defendant to circumvent investigation into the source of and arrangements for security.
The inquirer was referred to the text of Section 520.30 and the case law interpreting the statute, particularly Johnson v. Crane, 171 A.D.2d 537, 568 N.Y.S.2d 22 (1st Dept. 1991); People v. Esquivel, 158 Misc. 2d 720, 601 N.Y.S.2d 541 (S.Ct. N.Y. Co. 1993); People v. Agnello, 183 Misc. 2d 694, 705 N.Y.S.2d 525 (S.Ct. Queens Co. 2000); People v. McIntyre, 168 Misc. 2d 556, 640 N.Y.S. 2d 386 (S.Ct. Kings Co. 1996) and People v. James, (S.Ct., Crim. Term), N.Y.L.J. (June 3, 1999).
In People v. James, the court stated: " A qualified insurance company presumably can be relied upon for payment. In addition, it appears to be standard procedure that the insurance company prints its balance sheet on the back of the undertaking. However, the Court conducting the inquiry should also inquire as to whether the insurance company is making prompt payments on its obligations to pay on bonds which have been forfeited (see CPL 540.10). Delay in payment can indicate that the insurance company may not be able to meet its obligation."
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.