2013-10 Submission of Powers of Attorney and Remitting Premiums

South Carolina Department of Insurance Capitol Center 1201 Main Street, Suite 1000 Columbia, South Carolina 29201 Mailing Address: P.O. Box 100105, Columbia, S.C. 29202-3105 Telephone: (803) 737-6160 BULLETIN 2013-10 NIKKI R. HALEY Governor RAYMOND G. FARMER Director TO: All Surety Bondsmen Executing or Countersigning Bail Bonds as Agents for Insurers in South Carolina FROM: Raymond G. Farmer Director of Insurance SUBJECT: Submission ofPowers ofAttorney and Remitting Premiums DATE: October 10,2013 I. Purpose The South Carolina Department of Insurance (Department) continues to receive reports from county clerks of court about the failure ofbondsman to comply with certain provisions of South Carolina law. Accordingly, the purpose of this Bulletin is to clarify and amend Department Bulletin Number 2012-02 governing the reporting of gross (total) premiums written for surety (bail) bonds in this state. This Bulletin also serves to remind all surety bondsmen of their responsibility to proper~y record the gross premiums on the power of attorney formes). II. Discussion i I i The Department issued; Bulletin Number 2012-02 to remind insurers that surety bail bondsmen are required to report I the total gross premiums written for such bail bonds and the gross premiums charged must be recorded on each "Power of Attorney." After conducting several premium audits ofthe insurers authorized to transact business in this state, the Department found that some insurers were not maintaining records as required by South Carolina law. Specifically, Bulletins are the method by which the Director of Insurance formally communicates with persons and entities regulated by the Department. Bulletins are departmental interpretations of South Carolina insurance laws and regulations and provide guidance on the Department's enforcement approach. Bulletins do not provide legal advice. Readers should consult applicable statutes and regulations or contact an attorney for legal advice or for additional information on the impact of that legislation on their specific situation. records were not complete and some insurer files were missing the Powers of Attorney, the gross premium was unreported, and the gross premiums were not being recorded on the "Power of Attorney" form as required by Bulletin Number 2012-02. Effective immediately, insurers and surety bondsmen must comply with the following: 1. Surety bondsmen appointed by an insurer that execute or countersign bail bonds in South Carolina are required to report to such insurer the gross (total) premiums written for such bail bonds, and, 2. Insurers must obtain complete and accurate information on each risk insured and maintain accurate records ofbusiness done by them in accordance with South Carolina law; 3. Insurers must properly oversee the surety bondsmen appointed and acting as their agents to ensure they are providing accurate and complete information to the insurer when issuing the surety bond; and 4. Both the surety bondsmen and insurer are responsible for recording the gross premIum charged on the "Power ofAttorney" form itself. Surety bondsmen must remit all monies due to the insurer within 30 days from the date the bond is executed. Bonds must be reported to the insurer within 30 days of execution. Failure to file the report timely with the county clerk of court and the Department constitutes a violation of South Carolina law, subjecting the bondsman to disciplinary action up to, and including fine, suspension, or revocation ofthe surety bondsman license as set forth in Section 38-53-150. Both the bail bondsman and surety insurer are subject to such penalties. To ensure compliance with these requirements, the Department will continue to randomly conduct limited scope examinations to check that both insurers and surety bondsmen are complying with applicable provisions of South Carolina law. III. Questions Any questions about this bulletin should be directed to the attention of Willie Seawright at 803­ 737-6134 or via Email toWSeawright@doi.sc.gov. Bulletins are the method by which the Director of Insurance formally communicates with persons and entities regulated by the Department. Bulletins are departmental interpretations of South Carolina insurance laws and regulations and provide guidance on the Department's enforcement approach. Bulletins do not provide legal adVice. Readers should consult applicable statutes and regulations or contact an attorney for legal advice or for additional information on the impact of that legislation on their specific situation.