commercial bail bond industry is that it is a segment of the insurance industry. Much like any auto, home or health insurance company, in most states, bail bond insurance companies and their agents are regulated and licensed by the state’s Department of Insurance. This is because a bail bond is in essence an insurance policy. It is a policy taken out by a defendant’s family (in most situations) that guarantees the appearance of the defendant in court. If the defendant fails to appear, the policy ultimately goes into a “claim” status and the state or local jurisdiction is paid the amount of the policy, which is the full amount of the bond. The insurance agent in this simple transaction is the bail bond agent. Pretty straight forward stuff if you think about it.
The bail industry is part of a larger group of insurers called commercial sureties. These are insurance companies that provide unique types of policies (surety bonds) that guarantee the performance of something. The most common is a policy or bond that a company or individual gets to ensure performance in accordance with the conditions of a contract. For example, a construction bond guarantees that a builder will complete a project in accordance with the terms or the original agreement. There are literally hundreds of different types of surety bonds that sureties underwrite at the state and local level every day. As I mentioned earlier, bail bonds are a surety product and fall into this category of insurance.
Now, most county and state governments are required by statute to obtain a surety performance bond in pretty much any and every activity they are involved with when it comes to spending tax dollars. This includes hiring a contractor or vendor, building a highway, tearing down an old building, revitalizing a neighborhood and so on. Why do they do this? Because they don’t want contractors and vendors taking advantage of them and the taxpayers. They want to ensure that what they are asking for is what is going to get done. Makes sense, right? Absolutely!
Well here is a question then…if the government is so careful about ensuring that the new addition for the courthouse or the new school gymnasium are built by a company that has provided a guarantee of performance through a surety bond, than why do they not require the same types of guarantee and financial security in situations involving public safety and the criminal justice system? The response you might hear is that these types of financially secured bonds are complicated and don’t really relate to the criminal justice system. My answer to that type of thinking is that it is completely wrong.
These types of financially secured bonds are not complicated and they absolutely do make sense in the criminal justice system. Every family of every defendant in every court house around the country has available to them a number of local bail bond agents that can easily and affordably provide them with one of these financially secured surety bonds (or bail bonds as most people know them). From the county’s perspective, if you are going to release a defendant from jail before their trial on the condition that they show up for court, doesn’t it make sense to financially secure that release with a guarantee of performance? Don’t you want to guarantee the performance of that defendant so that he is held accountable for his actions, just like you want to ensure that the contractor building your new courthouse is being held accountable for meeting the specs of his contract and meeting agreed upon expectations? Isn’t public safety important enough to assure via use of a bail bond in most release cases?
It does not take a lot of common sense to draw the connection between these two things. Counties see the value in ensuring the performance of every dollar they spend. That being the case, shouldn’t the same type of thinking apply to letting defendants out of jail? Think about the options that are now available to the courts. First is commercial bail, an option that has been part of our criminal justice system for years and that costs the counties nothing. When a defendant is let out on a commercial bail bond, the county is being provided with an insurance policy financially guaranteeing the appearance of the defendant in court. Compare that with own recognizance release through a pretrial release program, an option that does cost the county taxpayer dollars, and which has no financial security or guarantee. In your opinion, which option makes the most sense? Which option is holding the defendant accountable? Which option is protecting the integrity of the criminal justice system? Which option does a better job of protecting the public? Which option follows the same line of thinking as other types of surety bonds counties and states require? The answer is pretty clear. The answer is commercial bail.
If the county and state were to approach all expenditures in the same way and take the same type of stance towards financially protecting their investments and securing the performance of an entity, shouldn’t they do the same with the criminal justice system? Shouldn’t they be turning to commercial bail to financially guarantee that defendants show up for court? Shouldn’t they be turning to commercial bail to responsibly and effectively reduce jail populations and keep the system running smoothly and efficiently? Shouldn’t they be utilizing the option that does these things without costing the taxpayer one cent? I look forward to your thoughts.
Brian Nairin, President & CEO of AIA, blogging about the bail bond industry. AIA (Allegheny Casualty, International Fidelity and Associated Bond) is the largest and oldest bail bond insurance company in the nation.
Tuesday, May 14, 2013
Wednesday, May 1, 2013
So you are probably asking why I am asking such common sense questions. Well, the truth is what is common sense to most of us is unfortunately not common sense to others. For example, just this past weekend, an article was written in the Courier-Journal touting the incredible success of the pretrial services program in Jefferson County, Kentucky. A state that you may or may not know that does not allow commercial bail. According to a Jefferson County District Court judge, the Pretrial Service Agency in his county gets High-Risk defendants back to court “an amazing 79% of the time….” Really? Amazing? Twenty-one percent of the time, the defendant is pretty much ignoring the authority of the system and doing whatever they want, and that, according to the judge is “amazing” and defines “success?” Interesting and disturbing to say the least.
The article goes on to show some math to support the so called success of the Pretrial Services Agencies. However, if you are a common sense person, it is really hard to define these numbers as “success.” According to the article, 35,186 people obtained pretrial release in Jefferson County. Each of these individuals went through a so called evidenced based risk assessment by the local Pretrial Services Agency. Thirteen percent of low-risk defendants did not show up for court….does that sound like success? Twenty percent of medium risk defendants did not show up for court…does that sound like success? Twenty one percent of high-risk defendants did not show up for court…once again, does that sound like success? To the pretrial folks, sure, it is great. But to the community it is absolutely not. Especially when almost 20% of the high-risk defendants are re-offending…in other words, several thousand defendants who have been released under pretrial services’ imaginary veil of supervision are ignoring the authority of the courts and in the process are running free to commit more crimes and victims. And all this happens at a serious financial and social cost to the county and state. When people fail to appear for court there is a huge financial cost that accompanies that act. In Dallas, Texas that cost was found to be over $1,700 per defendant. Applying that number to Jefferson County, based on a failure to appear rate of over 21% for just high risk defendants, the cost to Jefferson County is easily in the millions of dollars.
What makes this story even more disturbing is that this ineffective and costly system of managing criminal defendants (on both the front and back end of the process) is funded 100% by taxpayer dollars. Yes, those taxpayers in Jefferson County, Kentucky are paying for a government run Pretrial Service Agency to fail 20% of the time. And just for the record, when these 20% of high-risk defendants don’t show up for court, who do you think goes and gets them? Who is held accountable and pays the court when they don’t show up? The answer is no one. Why? Because there is no skin in the game and no accountability by any party involved (pretrial services or the defendant). When a defendant fails to appear, Pretrial Service Agencies have nothing to lose. The court just issues a bench warrant and it becomes the responsibility of already overburdened law enforcement to get him…which usually happens after they have committed an additional crime.
There is definitely not a simple solution to the challenges facing criminal justice systems like Kentucky. However, there is a more effective solution. A solution that is currently in practice in 46 other states; A solution that gets defendants back to court better than any other form of pretrial release; A solution that does not cost the taxpayers a single dollar; A solution that actually generates revenue for the county and state through premium taxes and forfeiture payments; A solution that is based on a real risk assessment and is evidenced based; A solution that lowers recidivism and better protects the community; and finally, a solution that gives crime victims a chance at justice. This solution is the commercial bail bond industry. It is time for states like Kentucky to start considering ways to more responsibly and effectively maintain the accountability of their criminal justice system and protect the public interest of its communities.
- ▼ May (2)
- Behind the Paper with Brian Nairin
- Brian Nairin is a nationally recognized expert in bail law who graduated with honors from Loyola Law School and was admitted to the California Bar in 1989. In 1997, Brian became President of Associated Bond. In the same year, he was elected President of the National Association of Bail Insurance Companies (NABIC), which was recently replaced by the American Bail Coalition (ABC). Brian serves as an officer of International Fidelity Insurance Company (IFIC) and Allegheny Casualty Company (ACC). In 2003, the bail underwriting functions of IFIC and ACC for the entire United States were moved to Calabasas in 2003 under the direction and leadership of Brian where he became President and CEO of what is now the AIA family of companies. Additionally, Brian has served as the primary educator for the California Bail Agents Association’s (CBAA) continuing education curriculum. Moreover, Brian has been retained to serve as an expert in numerous litigation and regulatory matters relating to bail. He has also served on the Board of Directors of Strike Back!
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