Bail bondsmen able to use installments to collect premiums Appeals court rules against insurance official

April 18, 1997|By Dennis O'Brien | Dennis O'Brien,SUN STAFF

In a ruling expected to make it easier for defendants to post bail, the state's highest court said yesterday that bail bondsmen may collect premiums from clients in installments.

The Court of Appeals ruled unanimously that the state insurance commissioner may not prohibit Steven E. Engelman, a Baltimore bondsman, from allowing clients to pay only part of the 10 percent premium required up front to post bail in most cases.

The appeals court said that nothing in Maryland's codes gives the insurance commissioner the authority to prohibit the practice -- known among bondsmen as accepting "short money."

"The commissioner's reading of the statute is commercially unrealistic and simply does not square with the practice of many insurers," Judge Robert L. Karwacki wrote in a 23-page decision.

Engelman said the decision will save his business from closing.

It also will give many defendants the chance to remain free rather than being locked up and awaiting trial at the city Detention Center and at other crowded jails across the state, he said.

"I'm ecstatic," Engelman said. "It's been four years of pure hell, and now it's finally over."

Engelman, who operates Professional Bail Bonds Inc., sued the insurance commissioner in 1995 after his bondsman's license was suspended for 30 days because he allowed clients to pay part of their premiums in interest-free installments.

Baltimore Circuit Judge John Carroll Byrnes reversed the suspension, ruling in Engelman's favor, and the commissioner appealed.

Joy Y. Hatchette, an assistant attorney general for the commissioner, declined to comment on yesterday's decision.

But she said state codes specify that rates charged by bail bonds- men, along with those charged by other insurers, must be approved by the insurance commissioner.

She said that Engelman's installment payment plans were never approved and that without such approval, Engelman could discriminate in the rates he charges his clients.

"You could have one consumer getting one rate and the next consumer with the same situation come through the door and get an entirely different rate for the same service," she said.

But Engelman's lawyer said there was never evidence his client discriminated.

"Our position was, what's wrong with allowing people to make payments over time rather than in a lump sum? Who is hurt by that?" said Andrew Jay Graham, Engelman's lawyer.

Pub Date: 4/18/97

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