10.2 Earned Premium, NCF, Dismissal, and Rebating
Key Takeaways
- The bail-bond agreement and California practice treat premium as fully earned upon the defendant's release from custody. No complaint filed (NCF) and dismissal of charges do not un-earn it.
- CDI's consumer FAQ states that premiums are nonrefundable even if charges are dropped. The main regulatory exception is 10 CCR 2090 on a pre-forfeiture surrender, taught in detail in Chapter 13.
- Proposition 103 rebating is legal. CDI's consumer FAQ says a bail agent may negotiate a lower fee by rebating, citing Pacific Bonding Corporation v. Garamendi (2004).
- Rebating a lower consumer fee does not rewrite the surety filing. Agents must still pay the surety and build-up (BUF) based upon the filed rate.
- Penal Code 1276.1, operative January 1, 2022, forbids any insurer, bail agent, or other bail licensee from charging, collecting, or receiving a renewal premium, and from writing a bail contract that requires more than one premium for the duration of the agreement, which lasts until bail is exonerated. A violation carries actual damages plus statutory damages of $3,000, with costs and attorney's fees to a prevailing affected person.
Earned Premium, NCF, Dismissal, and Rebating
Quick Answer: Premium is fully earned when the defendant is released. No complaint filed (NCF) and dismissal do not make it unearned. CDI says premiums are nonrefundable even if charges are dropped. You may rebate a lower consumer fee under Proposition 103, but you still remit to the surety and to BUF on the filed rate. Penal Code 1276.1 bans renewal premiums beginning January 1, 2022.
Section 10.1 answered what you may charge. This section answers when that premium is yours as earned compensation (subject to the surety's account-current and BUF), when it is not refundable, when you may cut the consumer's price, and when you may not come back for a second premium.
Earned at release, not at disposition
A compensated surety is paid for the risk of the appearance period, not for the district attorney's charging decision. The typical California bail-bond agreement therefore states that the premium is fully earned upon the defendant's release. The family is buying the defendant's walk out of the jail, plus the surety's continuing guarantee until exoneration. They are not buying a not-guilty verdict, a dismissal, or a promise that the prosecutor will file a complaint.
Two dispositions show up on exam items as fake refund events.
No complaint filed (NCF). The defendant is released on your undertaking. Days later the prosecutor files nothing. The case never becomes a pending complaint. The appearance risk you sold still happened: the person left custody on the surety's paper. The premium does not return because the district attorney chose NCF.
Dismissal. Charges are filed and later dismissed. CDI's consumer FAQ is blunt: premiums are nonrefundable even if charges are dropped. Dismissal is not a 10 CCR 2081 refund event and it is not an automatic 2090 event. The bond did the job it was bought to do — it got the defendant out and stood until the court ended the obligation.
Candidates mix this up with cash bail deposited with the court. Cash bail, if exonerated, is a court deposit that can come back to the depositor. A surety premium is not cash bail. Teaching 'the premium comes back when the case ends' is an auto-fail.
The written bail-bond agreement is where this rule is supposed to live in the file. If the indemnitor later claims 'we thought it was a deposit,' the exam will ask whether the premium was earned at release. Unless 2090 or another specific rule applies, the answer is yes.
The 2090 trap, pointed at Chapter 13
CDI's same FAQ carves the exception the public actually hears about: unless the bailee is surrendered, the bail fee is refundable minus administrative costs per 10 CCR 2090. That regulation is a pre-forfeiture surrender rule, not a dismissal rule.
In short — detail belongs in Chapter 13 — a licensee who surrenders the arrestee to custody before the appearance specified in the undertaking, or before any other occasion when the arrestee's presence is lawfully required, must return all premium paid, unless judicial action, information concealed or misrepresented by the arrestee, or other reasonable cause, any one of which was material to the hazard assumed, substantially increased the hazard, in which case the licensee may retain incurred out-of-pocket 2081(c) and (d) expenses. Surrender because the arrestee is again in custody on an offense for which a greater penalty may not be imposed, or surrender at the guarantor's request, shall never, in and of themselves, be reasonable cause. On any such early surrender the licensee must tell the arrestee about Penal Code 1300(b) rights to petition the court on return of premium.
The exam trap in this chapter is treating 'charges were dropped' as 2090. 2090 is about taking the body back before forfeiture. Dismissal and NCF are CDI's nonrefundable category.
Rebating under Proposition 103
Charging more than the filed rate is the 2081(a) violation from Section 10.1. Charging the consumer less is a different statute cluster.
CDI's consumer FAQ asks, 'Is bail rebating legal?' and answers yes. A bail agent may choose to negotiate a lower fee by rebating, as allowed by Proposition 103. CDI points to the 2004 superior-court decision in Pacific Bonding Corporation v. John Garamendi. The department's published position is not 'rebating is a secret courtesy.' It is a consumer-page rule.
Rebating is a discount to the person paying you. It is not a rewrite of the surety's filing and it is not permission to short the company. The educational objectives and the surety relationship both keep this split in view:
| Relationship | What the filed rate still does |
|---|---|
| Agent and consumer | Prop 103 lets the agent rebate a lower fee than the filed premium |
| Agent and surety | The agent still owes the surety based on the filed rate |
| Agent and build-up / reserve | BUF is likewise settled on the filed rate, not on the discounted cash the family handed over |
If the undertaking's filed premium is $5,000 and you rebate the family to $4,000, you have made a $1,000 business decision. You have not reduced the surety's filed premium to $4,000. The account current and the BUF invoice still run on $5,000. Paying the company on the discounted figure is a fiduciary short, not a Prop 103 feature.
Rebating also does not authorize a side charge that 2082 forbids. You may not 'rebate' the premium and then recapture it as a document fee. You may not tell one family the filed rate is mandatory and tell another family that CDI 'requires ten percent' while quietly cutting a cash deal. The lawful move is transparent: the filed rate is X; you are rebating Y; expenses, if any, are 2081(c) items with vouchers.
Penal Code 1276.1: one premium until exoneration
On and after January 1, 2022, Penal Code 1276.1(a) does two things at once.
No insurer, bail agent, or other bail licensee shall enter into a contract, agreement, or undertaking of bail that requires the payment of more than one premium for the duration of the agreement, and the duration of the agreement shall be until bail is exonerated. Separately, no insurer, bail agent, or other bail licensee shall charge, collect, or receive a renewal premium in connection with that contract, agreement, or undertaking.
The old 'annual renewal' on a long-running case is the target. The defendant is still out on the same undertaking a year later. You do not send a second premium bill because a year passed. The one lawful premium is the filed premium earned at release, for a contract that lasts until exoneration.
PC 1276.1(b) runs a parallel rule for immigration bonds beginning July 1, 2022. PC 1276.1(c) is the private-right-of-action sting: a violation makes the violator liable to the person affected for all damages that person may sustain by reason of the violation plus statutory damages of $3,000. A prevailing affected person is entitled to court costs and reasonable attorney's fees. CDI's consumer FAQ restates the headline: it is illegal to charge renewal premium beginning January 1, 2022, per Penal Code 1276.1.
A 'continuation certificate,' 'anniversary premium,' or 'same-case re-write' that is really a second premium on the same undertaking is 1276.1. A new arrest, a new booking, and a new undertaking are a new transaction with a new filed premium. Do not treat every trip back to the jail as a renewal, and do not treat a still-open original bond as a new sale.
California scenarios
NCF in Oakland. A defendant walks on Friday. Monday the prosecutor stamps NCF. The indemnitor wants 'the deposit' back. The premium was earned at release. NCF is not 2090 and it is not a CDI refund event.
Dismissal in Fresno. Six weeks after posting, the case is dismissed. The indemnitor quotes a blog that 'unused bail is refundable.' CDI's FAQ says premiums are nonrefundable even if charges are dropped. Point the family at the bail-bond agreement's earned-at-release clause, not at cash-bail folklore.
Rebate in Santa Ana. Filed premium is $3,000. The agent rebates to $2,400 to match a competitor. Lawful under Prop 103 and Pacific Bonding. The surety account current and BUF still run on $3,000. The $600 difference comes from the agency, not from the company's filing.
Anniversary invoice in Modesto. The case is still pending thirteen months later. The agency mails a 'year-two premium.' PC 1276.1(a) forbids charging, collecting, or receiving a renewal premium, and forbids a contract that requires more than one premium until exoneration. The statutory add-on is $3,000 plus actual damages.
Guarantor surrender used as a refund story. An indemnitor in San Diego says 'take him back, I want my money.' That is Chapter 13's 2090 problem: surrender at the guarantor's request is never, by itself, reasonable cause to keep premium. It is not an NCF/dismissal refund, and it is not a Prop 103 rebate.
Traps
- Earned at release, not at arraignment, not at sentencing, not at exoneration.
- NCF and dismissal do not unwind premium. CDI says even dropped charges do not.
- Cash bail returned by the court is not a model for surety premium.
- 2090 is a surrender-return rule. Do not cite it for 'the DA dropped the case.'
- Rebating a lower consumer fee is legal. Charging more than the filed rate is not rebating; it is an overcharge.
- Surety remittance and BUF follow the filed rate even when the family paid a discounted amount.
- PC 1276.1 is a one-premium-until-exoneration statute with a $3,000 statutory-damage adder, not a 'courtesy' billing guideline.
- A new arrest can support a new undertaking. A still-open original bond cannot support a renewal premium.
A defendant is released Friday night on a compensated California undertaking. The following week the prosecutor stamps no complaint filed (NCF). The indemnitor demands return of the premium as an 'unused deposit.' Which statement matches CDI's consumer rule and the earned-premium doctrine?
An Orange County agent rebates a family's premium from the surety's $4,000 filed rate to $3,200, citing Proposition 103. How must the agent treat the surety and build-up fund (BUF)?
Thirteen months after posting, a Modesto case is still pending and the original undertaking is still in force. The agency invoices a 'year-two premium.' Which statute controls?
A Fresno indemnitor's charges are dismissed six weeks after release. Separately, another indemnitor asks the agent to surrender the defendant before any forfeiture because the indemnitor 'changed his mind' and wants premium back. Which pairing is correct?