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

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 ten (10) 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.

[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.]