This bulletin seeks to clarify certain questions that have arisen regarding the use of assumed names by persons executing bail bonds on behalf of a corporate surety pursuant to Tex.Rev.Civ.Stat.Ann. Article 2372p-3 ("Bail Bond Act"). Among other things, that statute creates bail bond boards in counties of a certain size and authorizes the establishment of bail bond boards in other counties, and gives such boards certain regulatory authority with regard to sureties and bail bondsmen. The Bail Bond Act provides that corporate sureties, which are insurance companies licensed by the Texas Department of Insurance ("Department"), must file with the county clerk a power of attorney designating and authorizing a named agent to execute bail bonds on the surety´s behalf. The surety must also obtain a separate license for each agent operating under a power of attorney. In counties not subject to the Bail Bond Act, the agents of corporate sureties must be licensed as local recording agents under Texas Insurance Code Article 21.14.
It has come to the Department´s attention that in some of the currently 35 counties subject to the Bail Bond Act, persons who operate a bail bond business under an assumed name and who choose to become agents for a corporate surety through powers of attorney may not be allowed by the bail bond boards to use their assumed names in the various lists that are posted in the jails and the criminal courts. Attorney General Letter Opinion No. 98-068, dated August 21, 1998, discussed in general the use of assumed names by individual bondsmen and bondsmen acting as licensed agents of the corporate surety. That opinion pointed out that Chapter 36 of the Business and Commerce Code, which governs the use of assumed names, specifically excludes insurance companies, deferring instead to provisions of the Insurance Code. The opinion concluded, "Thus, a corporate bail bond licensee is not authorized to operate under an assumed name unless expressly authorized to do so by the Insurance Code or Department of Insurance regulations." The opinion further stated that the same limitation applies to persons or bondsmen acting as the corporate surety´s agent.
It is the opinion of the Department that the Texas Insurance Code does not prohibit corporate sureties from transacting the business of bail bond insurance by their duly designated agents, who operate under assumed names, so long as the powers of attorney fully disclose the person acting as agent and his assumed name, and so long as any posted listing of the person under his assumed name also notes that he is agent for the corporate surety. This opinion is based on our finding that there is no statutory prohibition nor public policy reason to prohibit the use of an assumed name by an agent acting through a power of attorney for a corporate bail bond surety.
This clarification recognizes the unique relationship between the corporate surety and its agents acting through a power of attorney. This bulletin is issued in the interest of full disclosure and preservation of bail bond operations and does not impinge upon the Department´s general prohibition against the use of an assumed name by any company which does insurance business in Texas under the authority of the Department except where otherwise provided by the Insurance Code. Further, this clarification does not prohibit the Department from prohibiting the use of any name that may be misleading concerning the business of insurance.
Marilyn Hamilton
Deputy Commissioner
Commercial Property/Casualty Division