The South Carolina Department of Insurance published a bulletin providing information and guidance to surety insurers, bondmen, and runners on how Act No. 83 of 2023 (Bond Reform Act) affects South Carolina insurance law.
The Department has received complaints that some parties in the commercial bail industry are ignoring the minimum fee requirement of the greater of $100 or 10% of a bond's face amount. Some parties have charged as low as 2% of the bond's face amount as a part of an installment agreement.
The Department affirms that the minimum fee is the greater of $100 or 10% of the bond's face amount, regardless of whether a payment agreement exists. The fee may also not exceed 15% of the bond’s face amount.
The Department illustrates as an example: for a bond with a face amount of $10,000, the bondsman must collect a minimum fee of $1,000 but can charge a premium of up to $1,500. For a bond of $1,000 or less, the minimum fee is $100. The fees must be collected before the bond is executed. A payment agreement is allowable for any excess premium past the minimum fee.
The Director may penalize anyone in violation, including through administrative fines or a license suspension or revocation.
The bulletin can be found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.