Tenn. Code § 40-11-302

Current through Acts 2023-2024, ch. 1069

Section 40-11-302 - Applicability of part - Exclusion from insurance company laws - Acting as sureties - Bonding capacity

(a) This part shall apply to all professional bondsmen, but shall not apply to or affect those persons, firms, partnerships or corporations engaged exclusively in the business of making judicial or other bonds, or providing or furnishing indemnity, as surety, in suits or actions of a purely civil nature; and shall not apply to persons, firms, partnerships or corporations, which become bondsmen without receiving consideration from, or as an accommodation to, an accused in a single transaction; provided, that if those persons, firms, partnerships or corporations shall undertake to furnish bail, make appearance bonds or enter into similar undertakings, as surety, for a consideration in a criminal case, then this part shall apply to them in respect of such transactions, as well as to those engaged exclusively in the business of a professional bondsman. All provisions of this part will apply to agents of insurance companies making appearance bonds in the criminal trial or lower courts and in the court of criminal appeals and supreme court of Tennessee.

(b) A professional bondsman, as defined in § 40-11-301, is specifically excluded from the laws governing insurance companies and any regulatory authority exercised by the department of commerce and insurance except as provided in subsections (c) and (d).

(c) A professional bondsman may act as surety on the following civil bonds, to a maximum of ten thousand dollars ($10,000), without qualifying with the department as an insurance company or agent being subject to the laws governing insurance companies or agents, so long as the court regulating the professional bondsman's criminal bonding activities has established regulations for the civil bonding activities of the professional bondsman which, at a minimum, shall require a ten percent (10%) security. These bonds are: appeal, attachment, certiorari, cost, detainer, injunction, lis pendens, possession and restraining order. A professional bondsman may act as surety on appearance and contempt bonds without qualifying with the department as an insurance company or agent.

(d) Any professional bondsman acting as surety under subsection (c) shall also be subject to the following:

(1) The commissioner of commerce and insurance may investigate the civil bonding activities of any professional bondsman;

(2) After investigation, if the commissioner has reasonable grounds to believe that the civil bonding activities are not in the best interest of the general public, the commissioner shall make a report of the investigation and any recommendations, and forward a copy to the court regulating the professional bondsman; and

(3) The court, after receipt of the commissioner's report, shall hold a hearing and enter any orders that the court deems appropriate.

(e) A professional bondsman's capacity, in those judicial districts where a professional bondsman uses collateral pledged with the court to underwrite bonds written by the professional bondsman, shall be determined as follows:

(1) Where the collateral pledged is cash, or an item readily converted to cash such as a certificate of deposit, the professional bondsman's capacity shall be not less than fifteen (15) times the amount of the collateral pledged;

(2) Where the collateral pledged is equity in real estate, the professional bondsman's capacity shall be not less than ten (10) times the value of the equity pledged as collateral.

(f) An individual sole proprietor professional bondsman, or the bondsman's agent, as an officer of the court, shall be permitted to answer court, surrender a defendant based upon one (1) or more of the grounds set forth in § 40-11-132, obtain an extension of time, or respond to a court's request for information without the necessity of obtaining legal counsel.

(g) Any documents relating to the assignment of collateral shall be delivered to the presiding judge of the judicial district where the professional bondsman is approved. The presiding judge shall enter an order designating which clerk shall maintain the collateral documents.

(h) Subject to the procedure set forth in this subsection (h), a surety may deliver to the court an investment certificate, including a certificate of deposit, in order to establish or increase the surety's capacity. So long as the procedure set forth is followed, a court shall not refuse to accept the investment certificate. When taking an investment certificate, including a certificate of deposit, the following procedure shall be followed:

(1) The surety shall purchase the investment certificate in the surety's name from a financial institution regulated by the state or federal government. The investment certificate shall be insured by the federal deposit insurance corporation (FDIC);

(2) The surety shall then execute an assignment of the investment certificate to the clerk of the court with criminal jurisdiction using the following form:

ASSIGNMENT OF SECURITY INTEREST TO THE STATE OF TENNESSEE

ASSIGNOR, SECURITY AND FINANCIAL INSTITUTION:

Please print

Assignor's name and name of person Social Security or FEN/EIN:

executing this assignment:

______________

Title(s) of person executing this assignment(i.e., owner, partner, president, secretary, etc.):

______________

Assignor's mailing address (Number and Street or P.O. Box, City, State, ZIP Code):

______________

Name of Professional Bondsman in whose behalf the assignment is executed (name as it is used on approved list):

______________

Description of Security: ID Number of CD or other security:

______________

Name of account or payee of Security (as First maturity date, if any:

it reads on the CD or other security):

______________

Dollar Amount of Security (in words): Dollar Amount of Security (in

numbers):

______________

Name of Financial Institution:

______________

Mailing address of Financial Institution

(Number and Street or P.O. Box, City, State, ZIP Code) & telephone number:

______________

In order to provide security to the State of Tennessee (including all future liability), the Assignor specified above, for and on the behalf of the professional bondsman named above, assigns and sets over irrevocably to the State of Tennessee a security interest in and to the Security described above.

Assignor agrees that this assignment gives to the State of Tennessee separately the exclusive right to redeem, collect and withdraw any part of or the full amount of the Security to be applied as a payment to satisfy a final forfeit judgment after the judgment becomes final against the Assignor and/or the professional bondsman named above in accordance with Tenn. Code Ann. § 40-11-101, et seq. The right of the State of Tennessee to apply the Security shall not be affected by a subsequent change in the trade name or business location of the person or entity on whose behalf this assignment is executed.

Assignor understands and agrees that by this assignment, all use of and control over the disposition of the Security is relinquished. The Security is to be held by the financial institution identified above for the sole use and subject to the exclusive control of the State of Tennessee. Interest on the Security shall be paid to the Assignor.

Assignor's Signature: Assignor's name in print: Date:

______________

Notary stamp or seal:

Sworn to or affirmed before me on this ____________________ day of

____________________ 20 ____________________

Signature of Notary Public in and for the State of Tennessee:

______________

My Commission Expires:

This is notification by the assessor to the financial institution of the terms of this assignment.

(3) At the same time the surety shall also deliver to the clerk of the court with criminal jurisdiction an acknowledgment signed by the institution issuing the investment certificate using the following form:

CONTROL AGREEMENT WITH FINANCIAL INSTITUTION AND NOTICE OF EXCLUSIVE CONTROL:

The Financial Institution acknowledges the assignment of the Security for payment of final judgments of forfeiture to the State of Tennessee. We certify that we have recorded the assignment and have retained a copy. We certify that we do not have, nor do we have knowledge of, anyone else having any lien, encumbrance, right, hold, claim to or obligation of the Security. We accept the Security with knowledge that it has been irrevocably posted as collateral, and we agree to act as the sole agent for the purpose of holding the Security for the State of Tennessee. We agree to comply with the instructions of the Court (on behalf of the State of Tennessee) directing disposition of the Security without further notice to or consent by the Assignor. We further agree not to exercise any set of rights we may have with respect to the Security or to otherwise impede, hinder, delay, prevent, obstruct or interfere with the Court's right to direct payment of, redeem, or collect any part (or the full amount) of the Security promptly.

Name of Financial Institution and Officer's Title:

Officer Executing this Document

(Type or print):

______________

Officer's Signature: Date:

______________

Notary stamp or seal:

Sworn to or affirmed before me on this ____________________ day of

____________________ 20 ____________________

Signature of Notary Public in and for the State of Tennessee:

______________

My Commission Expires:

T.C.A. § 40-11-302

Amended by 2022 Tenn. Acts, ch. 800, s 1, eff. 4/8/2022.

Amended by 2015 Tenn. Acts, ch. 416, s 1, eff. 5/8/2015.

Acts 1939, ch. 199, § 2; C. Supp. 1950, § 11715.2; impl. am. Acts 1971, ch. 137, § 2; Acts 1976, ch. 550, § 1; T.C.A. (orig. ed.), § 40-1402; Acts 1985, ch. 394, § 2; 2001, ch. 426, § 2; 2003 , ch. 303, § 4.