Appointment Terminated, License Still Active
Marisol holds a Nevada bail agent license and has been appointed by Surety A for three years. On February 1, Surety A sends a certified letter terminating her appointment effective immediately and demanding return of its power of attorney and blank bonds. Marisol reads the letter but does not return the materials. On February 10, she posts a $75,000 surety bond for a defendant using Surety A's power of attorney. She collects a $7,500 premium and $5,000 cash collateral, issuing a handwritten receipt. The defendant appears at all hearings, and the court exonerates the bond in June. In July, Surety A tells the court it never authorized the February bond and refuses to honor it. Marisol says her Nevada license was active, so she could write. The defendant's family demands return of the $5,000 collateral and a refund of premium. She had not been appointed by any other surety.
1. Was Marisol authorized to execute the February 10 bond for Surety A? Explain the licensing versus appointment distinction and the effect of the termination letter.
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A Nevada bail agent license is not authority to write for every insurer. Under NRS 697, the agent must be licensed and appointed by the surety; the appointment supplies actual authority, and the power of attorney defines the per-bond limit and conditions.
Marisol's license remained active, but her Surety A appointment ended February 1. After that date she had no actual authority to use Surety A's power of attorney or blank bonds. The termination letter also required return of those materials. Her continued possession might support an apparent-authority argument by the court, but it does not create actual authority. Because she had no other appointment, she could not lawfully execute a Surety A bond on February 10. The court's acceptance and later exoneration do not retroactively create an appointment. Surety A can dispute the bond, while the court decides the surety's liability to the court; Marisol's licensing exposure is a separate question.
2. What should Marisol have done on February 1 and February 10, and what should she do now with the court, Surety A, and the family?
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On February 1 she should have stopped writing Surety A business immediately, returned the power of attorney and unused bonds, confirmed the termination in writing, and updated her records. On February 10 she should have declined the bond or placed it only through a surety that had actually appointed her.
Now she should notify Surety A and the court in writing, cooperate fully, and avoid concealing the termination. She should give the family a written accounting and return the $5,000 collateral if no lawful offset exists. If the bond is treated as unauthorized or void, the premium is not earned and should be refunded. If Surety A honors the bond, premium may be earned for the risk period, but Marisol cannot add undisclosed fees. She should preserve the termination letter, receipts, bond copies, and all communications because the Division of Insurance may review her conduct.
3. How should the $7,500 premium and $5,000 collateral be handled if the bond is declared unauthorized?
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Collateral is not the agent's money. It is held in a fiduciary capacity for the indemnitor and surety, and it must be returned with an itemized accounting once the obligation ends. If the bond is declared unauthorized and no surety risk was validly assumed, the $5,000 cash collateral should be returned in full. The $7,500 premium should also be refunded because no lawful bond was placed.
If the court instead holds Surety A liable on the bond, the premium may be retained as earned for the risk, but only at the filed rate and without extra charges. The collateral should be held until exoneration, then returned less only amounts the indemnitor validly agreed to and that are legally owed. Marisol should not use the collateral to offset her own licensing problems or attorney fees. A written accounting should show every receipt and disbursement.