New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter B - Property and Casualty Insurance
Part 66 - Surety Bond Forms-waiver Of The Filing And Prior Approval Requirements Of Section 2307 Of The Insurance Law
Section 66.0 - Preamble

(a) Section 2307 (b) of the Insurance Law provides:

"No policy form shall be delivered or issued for delivery unless it has been filed with the superintendent and either (i) he has approved it or (ii) thirty days have elapsed and he has not disapproved it as misleading or violative of public policy."

(b) This provision creates serious problems with respect to surety bond forms which generally are specially prepared to meet the needs of individual insureds. Surety companies have little freedom in determining the makeup of surety bond forms. In most instances the obligee and/or its attorneys make this determination and the surety is given the choice of writing the bond on a "take it or leave it" basis. In those few cases where the surety is permitted to change a proffered surety bond form the final product undergoes the careful scrutiny and receives the eventual approval of the obligee's attorney.

(c) No public benefit would be gained by requiring surety bonds to be filed for prior approval. The provisions of surety bonds generally are not under the control of the surety company but are controlled by the conditions of the underlying contracts or prescribed under the authority of the laws, ordinances, documents and orders of public officers or public bodies. With respect to court fiduciary and judicial bonds, the form is essentially controlled by the condition language of the pertinent statutory provision of the New York law or by court rules. The form is checked by the attorney for the party obtaining the bond, the attorney for the opposing party and it is subject to the approval of the administrative personnel of the court in which it is required to be filed. Where there is any question about its acceptability it is subjected to the examination of the court, which is under the law the final arbiter of the form of such bonds.

(d) The bond form is usually needed immediately. The time required to file a new form and to obtain approval of the Department of Financial Services would severely inhibit the traditional use of surety bonds and cause principals and obligees to turn to other forms of security. The immediate need for such forms makes it impracticable to have them filed and approved prior to their use. Compliance with the requirement under section 2307 (b) of the Insurance Law would also result in an inordinate number of filings of surety bond forms that are tailor-made to meet the specific needs of individual insureds.

(e) Section 2307 (c) of the Insurance Law provides that the superintendent may, by a regulation adopted after a public hearing, waive the requirement of filings and prior approval of any policy form by the superintendent.

(f) However, unlike other surety bonds, bail bonds are usually standardized and are not specially prepared to meet the needs of individual insureds. As a result of complaints filed with the department, the superintendent is concerned that bail agents are using forms other than the forms of the insurer issuing the bail bond. These forms often include language and terms that impose unreasonable, punitive, or predatory conditions on principals and indemnitors. Therefore, the superintendent has determined that it would benefit the public for all bail bond forms to be filed with and approved by the superintendent.