Bail bondsmen welcome increased state oversight

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By Ed Jacovino
Journal Inquirer

HARTFORD -- A group of bail bondsmen is welcoming new fees and
increased red tape from the state, saying they hope the oversight will
restore fair play to the business.
    "I'm not a proponent of big government or having government in
businesses, but unfortunately  the industry has really brought this on
themselves," Andrew Marocchini, president of BailCo Bail Bonds in
Manchester and vice president of the Bail Association of Connecticut,
said.
    Marocchini is referring to a new law aimed at cracking down on
bail bondsmen who keep shoddy records, illegally undercut their
competition, and break other rules in the state-regulated industry.
    The new law requires all surety bond agents, or bondsmen, to file
monthly reports of their business with the state Insurance Department.
That took effect in October. Starting next week, bondsmen will have to
renew their registrations with the state and pay a new $450 fee, which
will pay auditors to pore over the monthly records for any signs of
wrongdoing.
    Lawmakers, judges, and even some bondsmen have complained for
years about a so-called "wild West" mentality in the industry.
Unscrupulous bondsmen undercut state-set rates to maximize profits,
charge exorbitant rates to hold collateral, or refuse to return it.
There have been courtroom fistfights between bondsmen over clients,
and some say judges are increasingly cutting them out of the market --
allowing defendants to pay 10 percent of a bond directly to the court
and walk.
    But others say bondsmen play an important role in the state's
court system. They help defendants get out of jail and be with their
families during trials. They offer the state a guarantee that a
defendant shows up at the next court date.
    Marocchini and the Bail Association for years have pushed for the
changes. The biggest change, Marocchini said, is the increased
scrutiny of monthly business reports. "There was never any required
reporting before," he said.
    Marocchini already has sent the state Insurance Department
information for a background check on him and his employees. In
January, he'll have to pay the $450 fee and start filing monthly
reports of every deal he makes -- including how much was paid at the
time, and the deal for how he'd collect the rest of the fee.
    The reports are aimed at helping regulators crack down on
companies that break the rules. Until now, they've skated by declaring
bondsmen as "independent contractors" to lessen the liability on the
company if they get caught doing something illegal, which usually is
undercutting the state-mandated downpayments.
    All registered bondsmen, as well as the companies they work for,
must report under the new law. The hope, Marocchini said, is that any
wrongdoing will mean a disconnect between a bond company and an agent.
"You can't lie about what you did or didn't write or what you did or
didn't collect," he said.
    The law also creates new payment plans with specific requirements.
A 35 percent deposit is needed. And the bondsman must file a civil
lawsuit against anyone who doesn't pay after 60 days of being in
default. Contracts also are limited in how long they can last.
    Marocchini suspects that within six months the program will have
weeded out most of the undercutters. "The tools are there now," he
said. "If the state really has the will, they have the tools to do
what they need to do."
    Amy Stegall is in charge of enforcing the new rules. She's program
manager of the Insurance Department's fraud and investigations unit.
The department oversees bondsmen because they're essentially insurance
agents -- they collect a premium and have to make a major payout if
the defendant skips a court date. Insurance companies back those
larger payments.
    Stegall said it will be easier for her to enforce the rules by
fining, suspending, or revoking the licenses of bondsmen who break
them. "We'll have much more enforcement authority overall," she said.
    She said the biggest factor of the new legislation is the
mandatory 35 percent premium. "This is what was driving a lot of the
problem," she said.
    Stegall hasn't taken any enforcement actions based on the new law.
And even though the reports started coming in October, they haven't
been audited yet because the state hasn't picked a company to do the
work. It's reviewing bids now, she said.
    As for whether the new reporting rules have drawn ire from the
bondsmen, Stegall said she hasn't heard much yet. During a meeting to
explain the rules, many asked about the new reporting and about what
would happen if they're late, or forget to file.
    "We've tried to make this as simple as possible," Stegall said,
adding that the department is creating an online submission form.
"We're trying not to be onerous."
    Calls to area bond companies weren't returned.
    Marocchini called the increased reporting and the new fees "a
nuisance," but welcomed them. "In the end, it'll be better for
legitimate companies," he said. "It puts all of us on a level playing
ground."