MD Bail Bond flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Bail bond defined

A written undertaking by a surety to pay the State a stated penalty if the defendant fails to appear; it is a suretyship contract, not an indemnity policy.

Surety qualification required

A producer executing bail bonds must hold the surety (property and casualty) line of authority in addition to being licensed by the Maryland Insurance Administration.

Appointment by surety

Before executing bonds for an insurer, the producer must be appointed by that authorized surety and the appointment filed with the Insurance Administration.

Filed premium rate

Bail bond premium rates are filed with the Insurance Administration; charging above or below the filed rate without approval is a violation.

Unauthorized insurance business

Executing a bond for an unlicensed or unappointed surety is a criminal offense and grounds for license revocation and civil penalty.

Fiduciary handling of collateral

Collateral and premium held for the surety or defendant must be kept separate from the producer's funds, accounted for, and returned when the obligation ends.

License lapse effect

Lapse of the producer's license or appointment voids authority to execute new bonds but does not release liability on bonds already in force.

Bail bond insurance line

Bail bonds are regulated as a surety line under Maryland insurance law; producers need surety authority and must comply with rate and appointment rules.

Bond penalty defined

The penalty is the maximum amount the surety owes the State; the court may order forfeiture of the full penalty on a failure to appear.

Forfeiture procedure

On a failure to appear the court declares forfeiture; the surety then has a defined period, commonly 90 days, to produce the defendant or seek relief.

Motion for remission

A request to reduce or set aside a forfeiture; the surety bears the burden of showing the defendant's appearance or other good cause.

Surrender before forfeiture

The surety may arrest and surrender the principal on the bond at any time before breach; surrender before forfeiture discharges the obligation.

Required bond contents

A bail bond must identify the defendant, court, case number, charge, penalty amount, and surety; an incomplete bond may be rejected by the clerk.

Discharge by death

The surety's obligation is discharged by the defendant's death, by lawful court order releasing the bond, or by full performance of all required appearances.

Power of attorney limit

A written power of attorney from the surety authorizes the producer to execute bonds up to a stated penalty; larger bonds require home office approval.

Breach on any required date

Failure to appear at any required proceeding, including a review or violation-of-probation hearing, is a breach even if the original trial date was met.

Payment after forfeiture

Paying the penalty after forfeiture does not by itself discharge the surety's duty to produce the defendant unless the court so orders.

Utmost good faith

The producer must disclose all material facts to the surety; misrepresentation or concealment voids the surety's obligation under the bond.

Three-party suretyship

A bail bond involves the obligee (State), the principal (defendant), and the surety, unlike two-party insurance indemnity contracts.

Fiduciary duty of producer

Premium and collateral collected for the surety belong to the surety or defendant; misappropriation is grounds for license revocation.

Rebating prohibited

Offering any part of commission or premium to induce the purchase of a bond is prohibited, as is misrepresenting bond terms or the surety's condition.

Twisting and coercion

Twisting induces replacement through misrepresentation; coercion ties a bond to another product. Both are unfair trade practices subject to penalty.

Conflict of interest rule

A producer may not act as both agent for the surety and advisor to the defendant on the same bond without full disclosure and consent.

Recordkeeping obligation

Records of each bond, premium, collateral, and power of attorney must be kept and made available to the Insurance Administration on examination.

Fraud by concealment

A producer who knows the defendant intends to flee or helps conceal the defendant commits fraud and forfeits commission and indemnity rights.

Premium formula

Premium equals the bond penalty multiplied by the filed rate; the producer retains commission and remits the balance to the surety.

Producer exposure limit

The surety's liability is the full penalty; the producer's exposure is limited to the power of attorney ceiling and any indemnity agreement.

Flight risk factors

Underwriting weighs charge severity, community ties, employment, prior failures to appear, financial capacity, and the quality of posted collateral.

Collateral valuation

Collateral must be valued conservatively and documented; real property requires a title check and lien, and overvaluation to justify a bond is prohibited.

Surety certificate of authority

Before executing any bond the producer should verify the surety holds a certificate of authority and meets statutory surplus requirements in Maryland.

Loss ratio monitoring

Frequent forfeitures raise the surety's loss ratio and can lead to withdrawal of the producer's power of attorney or higher filed rates.

Indemnity agreement

The defendant and often a co-signer agree to reimburse the surety for any loss; the producer must explain and obtain signatures before release.