Provides for regulating immigration bail businesses including restrictions on who may operate such a business; provides for who may bring an action against an immigration bail business.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7770C
SPONSOR: Epstein TITLE OF BILL:
An act to amend the insurance law, in relation to an immigration bail
business
PURPOSE OR GENERAL IDEA OF BILL:
This bill increases oversight of the immigration bond industry and curbs
abusive practices.
SUMMARY OF PROVISIONS:
Section 1 amends the insurance law by adding a new section 1123 that
defines an immigration bail business, and restricting the doing of an
immigration bond business to those authorized to do so by this article
and in compliance with the requirements of this article.
Section 2 amends the insurance law by adding a new section 2140 imposing
certain restrictions on the doing of an immigration bail business in the
state. It prohibits immigration bond businesses from requiring electron-
ic monitoring as a condition of an immigration bail and requires immi-
gration bond companies to disclose the sources of funding for lawyers to
which they refer immigration bail clients and inform immigration bail
clients that they have a right to choose their own legal counsel.
Section 3 amends the insurance law by adding a new section 2313 that
establishes a cap on immigration bond premiums.
Section 4 provides for the severability of any clause found to be inval-
id.
Section 5 directs the superintendent to promulgate regulations imple-
menting this act, and provides the effective date.
JUSTIFICATION:
The scope of immigrant detention is massive. Across the country, more
than 25,000 immigrants were booked into detention in the first three
months of 2021 and there are nearly 14,000 in detention on a daily
basis. Hundreds of immigrant New Yorkers are detained in as many as 76
different detention facilities across the state. In New York the median
dollar amount of bonds granted in immigration cases is $7,500, one of
the highest in the country. This is 50 percent higher than the median
bail set in felony criminal cases in New York City and nearly seven
times more than in non-felony cases. Unlike defendants in criminal
court, immigrants in detention must either put up their entire bond in
cash, or turn to "surety bonds," which require the detained immigrant to
pay a surety or bond company a non-refundable percentage of the bond
amount (usually 15-20%). Many immigrants who cannot afford a cash bond
turn to immigration bond companies for a surety bond, driving rapid
growth in the immigration bond sector in recent years.
One of the most serious concerns about the for-profit immigration bond
sector is excessive fees. Clients of for-profit immigration bond compa-
nies must pay thousands of dollars up front and pay hundreds of dollars
more in fees every month. Over time, these payments can exceed the cost
of the initial bond. And unlike cash bonds, none of these payments are
refundable--a fact that many clients of for-profit immigration bond
companies do not understand until it is too late. Clients of for-profit
immigration bond companies have reported that they did not understand
the contracts they entered into, that contract documents were not trans-
lated into their language, and that they were led to believe fees they
paid to immigration bond companies were refundable. Clients have also
reported that they were falsely informed they could be deported or
returned to detention if they failed to make payments to immigration
bond companies.
For-profit immigration bond companies charge bailees as much as $420
each month as "operating fees" on the electronic ankle monitors it
requires them to wear. The actual cost of operating these devices has
been estimated in court documents as $120 per month, which means that
these companies are making mandatory rent paid by detained immigrants on
their own ankle shackles into a profit center.
Because the average wait time in New York State immigration courts is
over 2 years, detained immigrants may end up paying over $10,000 in fees
for ankle monitoring fees alone. Again, these fees are not refundable,
even if the immigrant prevails in. court. Some clients of for-profit
immigration bond companies have reported that they experienced serious
medical conditions related to their ankle monitors, that they were told
they had to keep the ankle shackle on even during a pregnancy, and that
they were told that they would have to pay $4,000 in fees (several times
the actual cost of the device) if the device were lost or damaged,
including being cut off by medical personnel.
Of further concern, for-profit immigration bond companies have been
known to refer clients to "pro bono" law practices affiliated with the
company that provide free legal representation in immigration
proceedings. While the these arrangements can appear purely charitable,
they create a significant risk of legal conflict of interest, in which
immigration attorneys funded by immigration bond company may have an
incentive to act in the best interests of the company rather than their
clients.
This modest legislation would bring badly needed oversight to a sector
in which companies may be operating as unlicensed insurance agents and
which is rife with abuses by licensing and regulating immigration bond
businesses, reining in inflated fees, requiring more transparency in
contracts, and curbing the abusive practice of charging immigration bond
clients for their own electronic ankle shackles.
PRIOR LEGISLATIVE HISTORY:
2020: A8450/S6521 - referred to economic development / REFERRED TO
CONSUMER PROTECTION
2019: A8450/S6521 - referred to economic development / REFERRED TO RULES
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Unknown.
EFFECTIVE DATE:
60 days after becoming law.
STATE OF NEW YORK
________________________________________________________________________
7770--C
2021-2022 Regular Sessions
IN ASSEMBLY
May 21, 2021
___________
Introduced by M. of A. EPSTEIN, TAYLOR, QUART, SEAWRIGHT, KELLES, GONZA-
LEZ-ROJAS, CRUZ, FORREST, GOTTFRIED, SIMON, REYES, BURGOS, JACKSON,
MEEKS, STECK, TAPIA, RAMOS, FERNANDEZ, AUBRY, GIBBS, SOLAGES, WEPRIN
-- Multi-Sponsored by -- M. of A. COOK -- read once and referred to
the Committee on Insurance -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
recommitted to the Committee on Insurance in accordance with Assembly
Rule 3, sec. 2 -- reported and referred to the Committee on Codes --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- again reported from said committee
with amendments, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the insurance law, in relation to an immigration bail
business
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 1123
2 to read as follows:
3 § 1123. Immigration bail business. (a)(1) Any person, firm, corpo-
4 ration, or other entity who shall for another deposit money or property
5 as bail or execute as surety any bond in any immigration action or
6 proceeding who within a period of one month prior thereto shall have
7 made such a deposit or given such bail in more than two cases not aris-
8 ing out of the same transaction shall be deemed to be doing an immi-
9 gration bail business.
10 (2) Except for a corporation authorized to write fidelity and surety
11 insurance and to do an immigration bail business pursuant to the
12 provisions of this article and otherwise in compliance with all other
13 requirements of this chapter to do such business, no person, firm,
14 corporation, or other entity shall engage in an immigration bail busi-
15 ness in this state.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09647-09-2
A. 7770--C 2
1 (b) (1) No person, firm, corporation, or other entity shall in this
2 state do an insurance business or an immigration bail business as
3 defined in subsection (a) of this section unless authorized by a license
4 issued and in force as provided under this article.
5 (2) The superintendent may authorize a property/casualty insurance
6 company that is authorized to write fidelity and surety insurance to do
7 an immigration bail business in accordance with the provisions of this
8 article, but no individual or entity shall be licensed to do such busi-
9 ness.
10 (c) Any person, firm, corporation, or other entity that violates this
11 section shall be subject to the penalty set forth in subsection (a) of
12 section one thousand one hundred two of this article.
13 (d) Any agreement entered into by an entity subject to this section
14 that is not authorized to do an immigration bail business in accordance
15 with the provisions of this article shall be void and unenforceable.
16 § 2. The insurance law is amended by adding a new section 2140 to
17 read as follows:
18 § 2140. Restrictions on insurance producers procuring immigration
19 bonds. (a) No insurance producer shall require the use of an electronic
20 monitoring device as a condition of immigration bail. For the purposes
21 of this section, an "electronic monitoring device" includes any device
22 that tracks or monitors location, any device that tracks or monitors
23 biometric data, or any device that records or transmits video or audio
24 surveillance data.
25 (b) No insurance producer shall make a referral to or provide contact
26 information for a legal services provider without:
27 (1) disclosing in writing, in a language understood by the consumer,
28 whether the insurance producer or an entity that is an affiliate of the
29 insurance producer: (A) has a financial or ownership interest in the
30 legal services provider; (B) is receiving any compensation, either
31 directly or indirectly, for making a referral to or providing contact
32 information for the legal services provider; or (C) is compensating,
33 either directly or indirectly, the legal services provider for the legal
34 services rendered; and
35 (2) stating that: "The payment of premiums to the insurance producer
36 is not for and does not guarantee that you will receive legal represen-
37 tation. Using this legal services provider is not a requirement of
38 bail. If you choose to hire this legal services provider, you have the
39 right to fire the provider at any time and retain your own counsel."
40 (c) Any agreement, or portion thereof, entered into requiring the
41 waiving of the requirements of this section or otherwise in violation of
42 this section shall be void and unenforceable.
43 § 3. The insurance law is amended by adding a new section 2312 to read
44 as follows:
45 § 2312. Immigration bond premium. (a) The premium for giving an immi-
46 gration bond or depositing money or property as immigration bail in any
47 court having immigration jurisdiction or in any immigration action or
48 proceeding shall not exceed ten per centum of the amount of such bond or
49 deposit in actions where such bonds or deposits do not exceed the sum of
50 three thousand dollars. Where such bonds or deposits exceed the sum of
51 three thousand dollars, the premium shall not exceed ten per centum of
52 the first three thousand dollars and eight per centum of the excess
53 amount over three thousand dollars up to ten thousand dollars and six
54 per centum of the excess amount over ten thousand dollars.
55 (b) No person, firm, corporation, or other entity, including an insur-
56 ance producer, shall:
A. 7770--C 3
1 (1) charge, collect, or receive, directly or indirectly, any fee or
2 compensation in connection with an immigration bail deposit or immi-
3 gration bond, other than the premium based on rates subject to the maxi-
4 mum specified in subsection (a) of this section and filed with the
5 superintendent by the insurer pursuant to this article, notwithstanding
6 subsection (c) of section two thousand one hundred nineteen of this
7 chapter; or
8 (2) accept any fee or compensation for obtaining a license or for
9 obtaining an insurance producer or immigration bond or for an immi-
10 gration bail deposit.
11 (c) Any person, firm, corporation, or other entity that violates this
12 section shall be guilty of a misdemeanor. An indemnitor may maintain a
13 cause of action in a court of competent jurisdiction against any person,
14 firm, corporation, or other entity to recover any fee or compensation in
15 excess of the amount authorized pursuant to this section. The person,
16 firm, corporation, or other entity shall, in any action brought by an
17 indemnitor to recover any such overcharge, be liable for treble damages.
18 (d) Any agreement, or portion thereof, entered into requiring the
19 waiving of the requirements of this section or otherwise in violation of
20 this section shall be void and unenforceable.
21 § 4. Severability clause. If any clause, sentence, paragraph,
22 subsection, section or part of this act shall be adjudged by any court
23 of competent jurisdiction to be invalid, such judgment shall not affect,
24 impair, or invalidate the remainder thereof, but shall be confined in
25 its operation to the clause, sentence, paragraph, subsection, section or
26 part thereof directly involved in the controversy in which such judgment
27 shall have been rendered. It is hereby declared to be the intent of the
28 legislature that this act would have been enacted even if such invalid
29 provisions had not been included herein.
30 § 5. This act shall take effect on the sixtieth day after it shall
31 have become a law. Effective immediately, the addition, amendment
32 and/or repeal of any rule or regulation necessary for the implementation
33 of this act on its effective date are authorized to be made and
34 completed on or before such effective date.
