New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on September 6, 2002, representing the position of the New York State Insurance Department.

RE: Bail Bond Collateral Held Out-of-State

Question Presented:

May cash collateral collected by a NYS licensed bail bondsman and forwarded to an authorized insurer be deposited in an out-of-state segregated escrow account?

Conclusion:

Yes. The Department has no objection to an authorized insurer maintaining an out-of-state escrow account to hold fiduciary money securing a bail bond.

Facts:

A defendant in a NYS criminal case asked a NYS licensed bail bondsman to write a $25,000 bail bond, with part of the collateral being $8,000 cash from the defendant’s family. The bondman’s authorized insurance company approved the writing of this bond. The bondsman was requested to send the money to the insurer, which would deposit the collateral into a segregated escrow account at an out-of-state bank.

Analysis:

There are no specifically applicable Insurance Laws or regulations regarding an authorized insurer using an out-of-state bank to hold collateral in a segregated escrow account. Such practice is standard and customary in the bail bond insurance business.

For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.