6.4 Advertising, Fictitious Names, Corporations, and Background Changes

Advertising, Fictitious Names, Corporations, and Background Changes

Quick Answer: You may advertise a licensed bail business. You may not cold-solicit an arrestee. CDI's consumer page: agents must be solicited by the arrestee, the attorney of record, or an adult friend or family member. Print your license number (CIC 1725.5), display the license in the office (CIC 1820), do business in your own name unless a DBA is approved (LIC 447-42A), and report background changes in 30 days (CIC 1729.2). A corporation is not a shortcut around individual licensing.

Solicitation is not advertising

CIC 1800.75 is the unlicensed-advertising bar: no person shall advertise or hold himself out as engaging in the business of executing, delivering, or furnishing bail bonds or undertakings of bail, whether or not for consideration, without holding at the time all proper licenses required by Chapter 7. A Facebook page that says "24-hour bail" before the license issues is an 1800.75 problem, not a branding exercise.

Once licensed, 10 CCR 2079 limits whom you may solicit. No bail licensee shall solicit bail except in accordance with 2079.1 and from:

• (a) An arrestee;
• (b) The arrestee's attorney;
• (c) An adult member of the arrestee's immediate family; or
• (d) Such other person as the arrestee shall specifically designate in writing. The designation shall be signed by the arrestee before the solicitation unless jail rules prohibit it, in which case it may be signed after release to ratify a previous oral designation.

10 CCR 2079.1 then tightens two clocks. Any solicitation of the arrestee himself under 2079(a) shall be only after a bona fide request for bail services has been received from the arrestee or from a person specified in 2079(b) or (c). Any solicitation of a person specified in 2079(c) or (d) (family or written designee) shall be only between 7:00 a.m. and 11:00 p.m., unless the licensee is directly and specifically authorized in writing by the arrestee or the arrestee's attorney to solicit at some other specific time.

10 CCR 2080 limits negotiation. No bail licensee shall negotiate concerning bail except with a person specified in 2079, or any other person who without previous solicitation on the part of the licensee has requested the licensee's services.

CDI's consumer translation is shorter and is the sentence the Enforcement Branch prints: bail agents must be solicited for bail directly by the arrestee, the arrestee's attorney of record, or an adult friend or family member; bail agents may not solicit business. Read 2079–2080 as the regulation behind that sentence. You may still run print, radio, web, and directory advertising. You may not walk a jail corridor handing cards to people who have not asked.

Related practice prohibitions the objectives group with this cluster:

• 10 CCR 2070 — no agreement, before any offense is committed, guaranteeing that bail will be furnished if the person is later arrested, and no act that will encourage a person to violate the law.
• 10 CCR 2072 — no collecting or transmitting attorney's fees or costs on behalf of an arrestee; a licensee holding collateral may honor an assignment to an attorney on release of the collateral only if the licensee took no part in negotiating the assignment and does not furnish the forms.
• 10 CCR 2078 — no gifts to public officials or employees with duties in the administration of justice or a detention facility, or to a prisoner; nominal advertising items are not "gifts" except when given to prisoners or persons directly in charge of prisoners in the place of detention.
• 10 CCR 2082 — no service charge in a bail transaction in addition to the filed premium except as 2081(c), (d), and (e) permit. Filed-rate detail is Chapter 10; the licensing point is that you do not invent a "jail run fee" off the rate filing.

California scenario: At 1:30 a.m., Diego texts the sister of a man booked at Twin Towers, pitching a bond she never asked for. Even if she is an adult family member under 2079(c), 2079.1 confines that solicitation to 7 a.m.–11 p.m. unless the arrestee or the attorney has authorized another specific time in writing. The 1:30 a.m. text is the violation. A jail-hallway pitch to the arrestee with no prior request is a 2079.1(a) violation on top of CDI's "may not solicit" consumer rule.

License numbers, the word "insurance," and websites

CIC 1725.5(a) expressly includes a person licensed under Section 1800. On business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state, the licensee shall affix, type, or print its license number in a type size at least as large as any indicated telephone number, address, or fax number, or in 12-point type, or 8-point type for business cards, whichever is larger. If multiple licensed organizations appear, the number of any one of them satisfies (a). Fines: $200 first offense, $500 second, $1,000 third and subsequent, deposited in the Insurance Fund, capped at $1,000 per offense, with a reasonable-cause relief valve if the licensee files a supporting statement.

Note the drafting trap: 1725.5(b) (the requirement to print the word "Insurance") and 1725.5(c) (license number in emails) list other license sections and do not list Section 1800. CIC 1726, however, applies to a person licensed in this state as an insurance agent or broker who advertises insurance on the internet and transacts in California. The home page, or a prominently displayed link from the home page, must identify, in the same size type: the person's name as filed with the commissioner and not disapproved under 1724.5; the state of domicile and principal place of business; the California insurance license number; and the word "insurance." Transacting includes soliciting a California resident, quoting, accepting an application, communicating about terms, negotiating, executing, or servicing a California contract.

Exam trap: An item that says a bail licensee may omit the license number from California print ads because "bail is not insurance" is wrong. CIC 1725.5(a) names Section 1800. CIC 1800.75 separately forbids advertising the business without the proper Chapter 7 licenses.

CIC 1820 is one sentence and a frequent item: every bail license shall be prominently displayed in the office of the licensee. The CDI identification card is what jails demand on site; 1820 is what the office wall demands.

True names, fictitious names, and predecessor names

10 CCR 2066: except as provided in CIC 1724.5 and the commissioner's name regulations, and 2066.1 through 2066.3, every bail licensee shall do business in the bail licensee's own name.

CIC 1724.5 requires every individual and organization licensee and every applicant to file in writing the true name and all fictitious names under which the person conducts or intends to conduct business, and after licensing to file any change or discontinuance. The commissioner may disapprove any true or fictitious name (other than the bona fide natural name of an individual) if the name interferes with or is too similar to a name already filed; may mislead the public; infers the licensee is an insurer, motor club, or hospital service plan, or is entitled to insurance activities the licenses do not permit; states or implies the licensee is an underwriter; or the licensee has already filed and not discontinued more than two names including the true name (with a successor exception). CDI name regulations also treat a bail name that fails to include the word "bail" as a problem.

CIC 1802.2 is the predecessor rule: a bail licensee who has purchased or succeeded to the bona fide business of another bail licensee may use a true or fictitious name used by the predecessor if the predecessor conducted the business for two consecutive years or more.

10 CCR 2066.5: all advertising or telephone listings in the yellow pages shall contain the true name of the licensee who owns it with equal prominence with the fictitious name, so there is no indication that another separate business exists when the ownership is the same.

CDI's DBA process is a three-step completion after name approval. Submit LIC 447-42A (Name Approval Request) and the filing fees. Once the proposed DBA is approved, the following must be submitted within one year to complete the process:

1. A newspaper posting showing the name was advertised.
2. The county clerk filing for the name.
3. An underwriter's agreement from the surety company.

A corporation's true name must be approved; if it is not, an approved alias or DBA must be used in all business. LIC 447-42A can be filed in advance or with the application.

California scenario: "Midnight Bail 24/7 LLC" prints door vinyl and Instagram ads the week the articles of incorporation are filed, before LIC 447-42A comes back. CIC 1724.5 and 1800.75 both fire. Name approval is not retroactive branding.

Corporations and partnerships

CIC 1810(b) is the corporate statute. A license may be held by a corporation only if:

1. The application sets forth the names of all officers and employees who will be authorized to exercise the licensee's powers; each of those persons must meet individual licensure, and disciplinary action may be taken against those persons and the licensee.
2. The corporation may solicit or negotiate execution or delivery of bail on behalf of surety insurers only through natural persons who hold individual licenses as bail agents.
3. One hundred percent of the shares shall be held by licensed bail agents.
4. All shareholders, officers, and directors shall be licensed bail agents and shall be disclosed to the department.
5. Any sale or transfer of stock or other interest shall require the prior approval of the department. The department shall approve or disapprove a completed request within 60 days.

CDI's producer pages and FAQ restate the same structure in operational language: licenses may be issued to corporations to act as bail agents; each officer, director, stockholder, and employee must hold an individual bail agent license; a corporation may not employ a bail solicitor or permittee; the business location must be in California; subsequent stockholder changes require prior department approval and are submitted on LIC 437-25. Original corporate filing is $622 for a two-year term under CIC 1807.7; corporate renewal is $188, with an active bond and an active agent appointment on file.

10 CCR 2061: two or more bail agents or permittees desiring to transact as partners shall file with the commissioner the written statement required by 2061.2 at least 10 days prior to so transacting, except as 2061.3 provides. 10 CCR 2061.5: the licenses of each member of a partnership are subject to suspension or revocation for the failure of the partnership or of any member to comply with the bail laws if that failure occurred with the member's express or implied knowledge, consent, ratification, or collusion. Partnership is not a liability shield for the quiet partner who "did not write that bond."

CIC 1668.5 reminds the exam that a controlling person — presumed at more than 10 percent of voting securities — can sink the organization's license on 1668-style grounds even if the controlling person is not the person who signed the undertaking.

Exam trap: Incorporating does not let you hire unlicensed counter staff to "just take applications," and it does not let you park a solicitor or permittee on the payroll. CIC 1810 and the CDI FAQ both close those doors.

Background changes: 30 days

CIC 1729.2 applies to licenses issued under Chapter 7. An applicant or licensee shall notify the commissioner when specified background information changes after the application was submitted or the license was issued. If the licensee is listed as an endorsee on a business-entity license, the licensee shall also notify any officer, director, or partner listed on that entity license. A business-entity licensee who learns of a change pertaining to an unlicensed person listed on its license (unlicensed officer, director, partner, member, or controlling person) shall notify the commissioner.

"Background information" includes: a misdemeanor or felony conviction; filing of felony criminal charges in state or federal court; an administrative action regarding a professional or occupational license, or regarding conduct for which such a license was required but not possessed; an administrative or civil action filed by or on behalf of a government or regulatory agency alleging unlawful conduct; a licensee's discharge or attempted discharge in bankruptcy of an obligation regarding insurance premiums or fiduciary funds; and any admission or judicial finding of fraud, misappropriation or conversion of funds, misrepresentation, or breach of fiduciary duty.

Notification shall be in writing and sent within 30 days of the date the applicant or licensee learns of the change. Name, date-of-birth, or Social Security errors on the face of the license are a different mailbox (licdocuments@insurance.ca.gov, with proof). Employer errors are a new LIC 438. Do not use 1729.2 as the form for a DBA or a surety drop.

Discipline money: 1748 and 1814

CIC 1814 remains the Chapter 7 public-offense statute: violation of any foregoing provision of the chapter, or of any commissioner rule made pursuant to it, is punishable by a fine not exceeding $10,000, imprisonment pursuant to Penal Code 1170(h) or in county jail not exceeding one year, or both. CDI's Enforcement Branch cites 1814 when it refers a bail CIC or CCR violation for criminal prosecution. CIC 1746 does not currently appear as an active Insurance Code section; do not pick it as the current penalty citation.

CIC 1748 is the alternative money penalty in a disciplinary proceeding: the commissioner may permit a licensee to elect in writing to pay a specified sum in lieu of a suspension or other permitted action, not exceeding $4,000 per offense, $20,000 in the aggregate for all offenses in one proceeding, 30 percent of gross commissions on insurance transacted in the preceding calendar year, or any amount proven or admitted to have been received and retained in violation of the code. Failure to pay can lead to denial, suspension, or revocation, and the unpaid balance must be paid before reinstatement or a new license.

California scenario: A Stockton agency's majority stockholder sells 40 percent of the shares to an unlicensed cousin over a weekend and reports it to CDI six weeks later on a letterhead note. Two statutes are already in play: CIC 1810(b)(5) required prior approval of the stock transfer (LIC 437-25), and 1729.2 required a 30-day written background notice if the cousin's history includes a listed event. Incorporating did not buy anyone extra time.