California Insurance Commissioner John Garamendi has moved to shut down the operations of a Reading, Pennsylvania firm reportedly found to be transacting bail bonds without a bail agent license in California.
The California Department of Insurance issued a cease and desist order to Capital Bonding Corporation, which operates under the name Capital Bonding Insurance Services in California. The move comes after an investigation by the California Department of Insurance’s Investigation Division, which determined that the company had no legal authority to transact bail bonds in this state.
“This type of unlawful practice seriously undermines respect for the law that governs the insurance industry,” Garamendi said. “Just as importantly, it creates an unfair advantage for unscrupulous companies against those who operate within the scope of our laws. I will work diligently to help ensure that this type of action does not go unchecked.”
According to investigators, Capital Bonding’s activities as a program administrator for Harco National Insurance Company, as well as its past activities as administrator for other surety insurers, requires that it hold a license to transact bail in California as a bail agent.
As administrators, Capital Bonding employed licensed California bail agents to place bonds with California Courts, collected premiums, paid commissions and settled claims on forfeited bail bonds California.
Should Capital Bonding fail to cease & desist from transacting bail in California, the Insurance Commissioner may impose fines of up to $5,000 per day for each day that the order is violated.
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