Surety Vs. Property; Pros and Cons

This came out of another thread and I sort of had some thoughts and questions so I started this thread... LuVonda, pardon me for putting you upfront on this but your reply got me to wondering...



Why not? and do I denote a measure of distaste here? Just curious... what brought those feeling up or am I misreading your post.

... and since I brought it up... is there something inherently wrong with Surety companies or to clarify my thoughts... what are some of the Pros and Cons of each type of bail bond activity.

Surety and Property... some states have both, some have only one, some have none.

For what it is worth I am Surety... I looked into Property and some of my friends are both... but... I remained as Surety for personal reasons.

So what are the thoughts on this.


ADDED LATER... I have some thoughts on this but I have to get them together before I get into this.... actually requires some thought... which for me............. is time consuming... and I have to have some coffee... maybe tomorrow...

_________________
Bill Marx, Sr.
"FREE STATE BAIL BONDS"
"FREE STATE INVESTIGATIONS"
DCJS: 99-176979
Cell: 434-294-0222

"Endeavor to Persevere" "Lone Watie"

"Good judgment comes from experience, and a lot of that , comes from bad judgment" "Will Rogers"

Bill, when my Dad first started writing Bail way back in the day the Department of Insurance was involved. I do not know what happened but it 1989 that was done away with and the Bail Bond Companies became self sureds'
Unsure of the "Why" of the whole matter. I will try and track down one of my Dad's old friends from back then who still owns a BB Company and see what he has to say and then I will report back.

So, what I meant by that comment is that there is not and will not be Insurance Company sponsored BBAs here in Arkansas.

I think that it all comes down to money and the financial liability to the State when it comes to forfeitures . . .
So no disdain as I have no personal experience in dealing with Insurance companies in regards to this stuff. Well, other than dealing collecting for doing recoveries and they like to nickel and dime ya.

I also do not own the company that I write for.

_________________


Do not consider anything for your interest which makes you break your word, quit your modesty, or inclines you to any practice which will not bear the light, or look the world in the face .... Marcus Antonius

I AM Some Folks "KARMA" and A MODERATOR @ FRN

I will take a bite at this apple because I am both...

The problem with surety insurers is that the total amount of bail secured by them is exponentially greater than that of property bondsmen. That is a very general statement but consider this: If I want to start an insurance company in Maryland to write bail, it would cost me 1.2 million, that can be deposited as cash reserves or CD and I can also further encumber it by using it as collateral or to leverage additional financial deals. The amount of bonds I write against that amount is unlimited, how many powers can I print? So, consider the amount of bonds each of you writes in a year, how many of you writing would it take to eclipse the amount of cash collateral, and how long would it take? The additional negatives are that insurance companies are very powerful and not easily controlled. They will tie the court up fighting forfeitures and continue to encumber their insurance company while doing so.

The property bondsman is limited by a factor of how much collateral is signed over to the state. MD requires unencumbered property, titled to the state. Should an issue arise, they can take your property without court action, as it is already titled to them. Property bondsman usually pay their forfeitures because they will be shut down if they don't, and they don't have the legal team to fight it.

This is very general and different states have different requirements for both avenues. To put it succinctly, small companies are controllable and large ones are harder to control. Lastly, surety insurers have a reputation for generating millions of dollars in forfeitures and filing bankruptcy, while keeping the premiums, and roll them into another company. There are some that have done this several times. The deal is that they write all the bail they can, we call them premium producers, and when the forfeitures start piling up, they fight them for as long as they can, then flip the company to the next one. They don't even change the phone numbers! It is cheaper to put up 1.2 million again then to pay 40 million in forfeitures.

It does not take long to understand why some jurisdictions opt for property or colleteral bail in lieu of surety insurer backed bail.

Scott

_________________
R.E. "Scott" MacLean III

"Leaders are like Eagles, you never see them in a flock, but one at a time"

Chesapeake Group Investigations, Inc.
Chesapeake Bail Bonds
877-574-0500
301-392-1100 (fax)
301-392-1900 (Office)

Yep . . . and that is why they are not here . The State wants to be paid.. I do recall that is one of the arguments uised in Missouri recently when Andy was working with that group of folks on legislation. I have asked him to pop in here and make his opinion known.

_________________


Do not consider anything for your interest which makes you break your word, quit your modesty, or inclines you to any practice which will not bear the light, or look the world in the face .... Marcus Antonius

I AM Some Folks "KARMA" and A MODERATOR @ FRN

For the income side of this equation:

We are competing with bondsman that are premium writers, some on no liability contracts. They write anyone and everyone, not properly vetting the defendant, because they have no risk. If you are a practical bondsman, surety or property, you will find it difficult to compete with these types of people. This is where the 1,2,3% down bonding came about, no collateral and minimal Indemnitor requirements. If you attempt to properly vet a bail client, they will drop you for "fly by night Fred," who has little or no requirements and will take 1% down. Fred failed math, because once he pays his build up fund and insurance premium, he is at a minimum 1% in the hole.

Professional Bondsman that put a bond together properly, tied up correctly, will have minimal skips, but they will happen. The money generated by a property bondsman is not paid to an insurance company in premiums or BUF account, and therefore makes you more profitable. In a business where points count to profit or loss, it makes no sense to give anything away if you write tightly anyway. If you are adverse to risk and write bonds because you have bills to pay, and hope to keep the wheel turning fast enough to have as much coming in as going out, you need and insurance company. A single demand forfeiture could put you out of business for good.

I write tight bonds, and have been told that I am stupid to write this way due to my recovery track record. My point is a bad bond is a bad bond. A skip is not a profit center. Usually a skip is because the Indemnitor had nothing to lose either. I have heard that if you don't have skips, you aren't writing enough bonds and a good bondsman can make a bad bond a good one etc. I have made a significant amount of money over the years from bondsmen with this attitude, so far be it for me to correct them

I will give you all a free one...I write for 5 years on an insurance company (we only write property in 4 counties) then switch companies. I let the previous company cases run out and I close out my BUF and buy property. No insurance company ever lost a nickel on me. Have no illusions of granduear, the companies say they like bondsmen like me because the premium is earned and not going back out to pay forfeitures. However, these same companies will opt for volume premium writers with a large amount of forfeiture drama every time. I have concluded that the management are paid on sales volume and are more interested in driving sales volume to their personal bottom line than looking out for stock holder interests.

JMHO

Scott

Property = Profit

Scott

_________________
R.E. "Scott" MacLean III

"Leaders are like Eagles, you never see them in a flock, but one at a time"

Chesapeake Group Investigations, Inc.
Chesapeake Bail Bonds
877-574-0500
301-392-1100 (fax)
301-392-1900 (Office)

Scott, Bill...Well Stated.

_________________
Brian D. "Stewie" Raybold
Principal/CEO
Alpha Bail Bonds, Inc.
(610) 400-8575 Office
(215) 459-0557 Mobile

PA 572430 - Producer
PA 621092 - Agency

I am surety. I have considered going property as well but opted to remain as is...

I will say that I am easy to deal with from the corporate end and try to do all my reports and other related activities in a timely and neat manner... type all my reports, keep my collateral separate in fiduciary accounts... go to all my show causes, clean up my own skips and have never had a forfeiture... uh, well, not in the last 10 years... and not with my present surety company. So I suppose they keep me cause I am not much trouble.

I have no particular opinion one way or the other on sureties in general although... I have had a bit of trouble with the former general agents that I have written under... mainly through obtaining my former BUF accounts. I have seen some really "fly by night" outfits and there are many still operating in Virginia that I absolutely believe or "CROOKS" in every since of the word. I know their activities, I know the agents that work for them, I have personal experience watching them in court and while bonding and there is no question in my mind that they are underhanded, backstabbing, low life, bottom feeders that we could do without... so, having said that.

I suppose that does reflect on the sureties to an extent but then they are out for the buck and I guess they only are interested in who is turning over the cash... when I was in the restaurant, motel and bar business, there was a saying that I heard from some of my competitors that went something like this.... "It's hard to make a living in this business but if you can turn over enough money you will be fine"... I'm not sure I fully understood that in the beginning... but I guess in the years I operated I came to understand the meaning... I think that is why so many people get in and out of that business... I saw them come and go all over the place... open one day and gone the next... I lasted about 10 years and then I got out.... it about killed me.... but I am better for the experience... anyway... that has nothing to do particularly with this thread... however... it does relate in this way...

Many agents come in here... as pointed out by Scott and others... they write for the premium and not the bond and sureties will hire them with no particular concern other than they are putting dollars in their pockets... when the forfeitures get too much they close the doors, change hats and move on... to that end, I suppose is a negative for the sureties.

I don't think that is the way my surety operates but then times are getting a bit tight and I have heard through the grapevine that agents are dropping like flies and that has to have a major effect on the sureties... even mine.

The main reason I stay surety is convenience. I have unlimited writing ability, my general agent is an attorney and will and has represented me if needed, I have immediate turn around time on my powers, I can pick up the phone and talk to anyone including the CEO any time I need to... if there is a question, I get it answered immediately and overall I am quite satisfied with my surety.

BTW, Seneca is who I write under. I know there are those on this site that also are involved with Seneca and I can only voice my personal opinion, so if you have had a bad experience with them... that is your deal, not mine... they may "drop a rock" on me tomorrow but so far... for the past 5 or 6 years... I have had no problems.

I don't set the world on fire but I am steady... I think, although I have heard somewhat to the contrary, that if an agent just keeps his business clean and upfront and writes smart... does not look at the premium and considers the bond and all it's connections... he will be fine and the surety will be fine with him... as mentioned, I have also heard that some sureties are only interested in throwing as much business, regardless of the liability, at the wall... some sticks, some doesn't... they don't care cause when it get too much they just.... as mentioned... change hats and move on........ that may be true but I have not seen it.

I suppose the advantage with property is of course that all the money is yours... but then you also provide all the support. I believe that if you have a good contract with a surety, you can do quite well... I am thinking somewhere in the mid 80% and up range... I know some agents have contracts in the mid to upper 90's and that is pretty good IMHO. When I started, I knew nothing of the contracts and I started as a liability agent with only 50%... and 10 of that went into my BUF... so I was bumping along with 40% and I was paying my phones... figure that... it didn't take me long to determine that, that was unacceptable... but I bet there are many out here that do not learn and stay at those levels. I now would not consider anything under 85% as being able to support you... the BUF also provides you with a little nest egg... IF YOU CAN GET IT WHEN YOU DECIDE TO LEAVE!!! I was able to when I changed companies but beware... sureties are quite reluctant to turn this money loose and general agents will also hold you back in that department... I did get my money but it wasn't the easiest task.

Several days ago, I had occasion to be at one of my main jails... there was a property bondman, whom I have known for a few years who was waiting for his people also... we were talking about generalities when his indemnitor came up and told him that they only had ... less than half the money.. it was a $15,000 and they had $700 and would not have the rest until next month... well, he was fine with that... and frankly... as property, he could care less... it cost him nothing to post the bond other than the paper and whatever he got was all his... had I written it... I would have made sure before they met me... that they had at least 70% and I might have given them a week for the rest but a property bondsman can do about what he wants... that certainly does take business out of my hands as they are a lot more flexible with the money. I don't bend much at all, but I am not in business to chase the money or the defendants... I do very little credit... although there are time when you have to in order to do the bond, but not often.

These are just my thoughts on sureties... I think Scott for one, can give you some very pertinent advise... he is both surety and property and is quite the businessman. Heed his advice.

_________________
Bill Marx, Sr.
"FREE STATE BAIL BONDS"
"FREE STATE INVESTIGATIONS"
DCJS: 99-176979
Cell: 434-294-0222

"Endeavor to Persevere" "Lone Watie"

"Good judgment comes from experience, and a lot of that , comes from bad judgment" "Will Rogers"

As stated in my intoduction, I write very few bonds these days and my focus is almost all recoveries, but I must say I have posted Bail for the finest Insurance Company I know. These guys have treated me with respect and dignity from the get go. It took a week to have my BUF returned and they insisted that I keep powers "just in case I want to write bonds again"
As Bill stated, this is only my experience and others may have had a different experience with this company. Make no mistake, I know had I cost them money, mailed shoddy reports, called them with a bad attitude, etc. our relationship would probably have gone south, but I couldn't blame them for that. I should look in the mirror on that one. I can call the CEO right now and speak with him. (This says much more about the company than me) I know of a couple Agents including my Brother that would disagree with me on this one but the few that would disagree might want to look in that same mirror. I won't mention the name because I don't wan't it to look as if I'm advertising for them but if my son who is 37 and was in this business I would point him to this company. (how do you spell "shoddy" smilin)

_________________
Bill Williams
Bail Agent
Eagle Bonding Services
Asheville NC 28804
828-777-8667
Lic # NC10013561
Lic # TN 2033018

Never be haughty to the humble
or humble to the haughty - Jefferson Davis

I wan to get into this one more deeply but need to get my facts in order and I'm a little tired right now. I will give a taste of what NC is like on remissions.

There are two provisions in NC to get remissions.
1) You were served with a notice of forfeiture more than 30 day's from the date the forfeiture was entered by the clerk of court.

2) Extraordinary Circumstances.

Both of these situations require that you pay the total amount of the forfeiture and then file a motion to remit.

The first one sounds cut and dried..right? The courts have found on many occassions that the untimely service did not cause the bondsman any hardship. Sometimes you get off the bond this way and sometimes you don't.

Extraordinary circumstances. This is anything but simple...Case in fact. I'm paraphrasing but the argument is close. The Bondsman failed to produce the defendant in court and the bond was forfeited and the bondsman paid it.

Approx 2 years later (Bondsman in NC have no more than 3 years after final Judgement to recover some or all of the bond) the bondsman filed a motion to remit citing extraordinary circumstances..... He brought before the court the death certificate of the defendant who had ultimately died in a car crash in Mexico. The trial court denied his motion.

The court of Appeals found that the trial court did not abuse it's discretion by concluding that the death of the defendant did not constitute sufficient extraordinary cause to warrant remittance of a bail bond judgement.

The purpose inherent in the statutory scheme governing remmitance suggests that it would be unfair to sureties to deny remmitance when they diligently pursue defendants who die through no fault of the surety, even after defendants die after the execution of judgement of forfeiture. However, extraordinary cause does not exist based soley on the defendants death; the fact of the defandts death must be weighed against certain other factors, including the inconvenience and cost to the state and to the Courts; the diligence of the surety staying abreast of the defendants whereabouts prior to the date of appearance and in searching for the defendant prior to his death; the sureties diligence in obtaining information of the defendants death, the risk assumed by the sureties; the sureties status as private or professional; and the timing of defendants death. Extraordinary cause did not exist in this case because the sureties' pursuit was not diligent. State V Coronel 145 N.C. App. 237 2001 Extraordinary Cause.

Problem in NC, no judge is willing to set precedence and explain what extraordinary is....All NC Bondsman should document everything done to apprehend their subject as well as knowing their whereabouts prior to court date. Date's, time's, reciepts, etc.

I will follow up on this with a case that I am involved with. My client is filing for extraordinary circumstance on this one.

_________________
Bill Williams
Bail Agent
Eagle Bonding Services
Asheville NC 28804
828-777-8667
Lic # NC10013561
Lic # TN 2033018

Never be haughty to the humble
or humble to the haughty - Jefferson Davis

Died in Mexico,

In CA there have been many forfeiture cases where the defendant "supposedly" had died in Mexico. The family and defendant staged funerals. The whole enchilada!

Mourners, body in a casket, photos, even video.

One case in particular, 2 years after the "death" the same defendant came before a southern CA judge. The judge remembered him and that he was dead.

So after that, many CA judges will not take photo evidence of a death of a bail skip. It has to be verified by the U.S. embassy personel. If not, no exoneration of your bond.