Far West Insurance Company, in Liquidation

BAIL AGENT RELATIONS

Frequently Asked Questions

Question: Have the Amwest/Far West bail bonds been cancelled?

Answer: Yes, all active bail bonds were cancelled as of December 9, 2001 at 11:59 p.m. CST as required by Nebraska statutes and as a result of the Liquidation of Amwest/Far West.

Question: Why is Nebraska involved?

Answer: Because both Amwest and Far West are incorporated under the laws of the state of Nebraska.

Question: Now that the bail bonds are cancelled, does this mean that the bond is exonerated?

Answer: Cancellation means that Amwest/Far West is no longer obligated to pay the court should the bond be forfeited due to a defendant’s failure to appear. Amwest/Far West has no further liability beyond the cancellation date.

Question: What about bail bonds that were ordered forfeited by a court prior to the December 9, 2001 cancellation?

Answer: These are considered to be valid forfeitures and all customary steps should be taken by the bail agent to address the matter. Since these are valid forfeitures, it is our opinion that the bail agent still retains the right to apprehend the defendant.

Question: What about bail bonds that were ordered forfeited by a court after the December 9, 2001 cancellation?

Answer: We will consider these to be invalid forfeitures as to Amwest/Far West’s obligations on the bonds. However, bail agents should consult their attorney and should consider moving the court to vacate the order of forfeiture based upon the fact that the bond was cancelled prior to the forfeiture. It is our opinion that the right to apprehend does not survive cancellation of these bonds.

However, if the agent is jointly and severally liable according to the terms of the bond, the forfeiture may be valid as to the agent, and therefore the agent’s right to apprehend may survive the cancellation. We suggest that you check the language in the bond, consult your state and local statutes and regulations, and consult with an attorney to determine if any statutes, regulations or court rules address this matter.

Question: What documentation must be mailed by the bail agent to courts and defendants?

Answer: 1. Regarding all bail bonds that were active at the time of the December 9, 2001 cancellation, the agent must mail notice to the court and defendant advising them of the Order of Liquidation and of the cancellation of the bail bonds. The notice must be sent via first-class mail and include the name and address of Amwest/Far West, your name and address, the Court case number and the power number of the bail bond(s) being cancelled. Agents should have mailed these notices in early December, 2001. Further, you are required to file a report with the Liquidator showing your compliance with this notice requirement. Please note on the address on the envelope, Attention Liquidator, “Court Division Report of Compliance” and mail to Amwest/Far West’s Court Division at P.O. Box 4500 Woodland Hills, CA 91365.

2. Agents are required to send a Proof of Claim form to any person or entity known or reasonably expected to have a claim against Amwest or Far West. This may include your clients and the Courts. Amwest and Far West Proof of Claim (POC) forms have been mailed to agents. Agents are required to file a Compliance Report with the Liquidator indicating that they have complied with the mailing requirements in relation to the Proof of Claim forms.

Question: Now that the bonds are cancelled, am I required to post new bail for the defendant?

Answer: Neither Amwest/Far West nor the Liquidator requires bail agents to post a new bond for the defendant.

Question: If as a result of the cancellation, a judge orders that a new bond be posted for the defendant, will Amwest/Far West pay the premium? Also, can the premium be paid from the agent’s reserve account?

Answer: If premium is paid by the agent for a replacement bond that an agent chooses to execute, the agent may file a proof of claim with the Liquidator for the premium attributable to the replacement of the cancelled bond(s), net of commission. This claim must be filed in accordance with the Proof of Claim process. At this time, the Liquidator cannot predict what amount, if any, will ultimately be approved or paid on this or any other type of claim. You may wish to contact your state insurance guaranty association to determine whether such premiums are considered a covered claim by your guaranty association. Please see the “Guaranty Fund Association” information listed elsewhere in this website.

It will not be possible to pay premium for replacement bonds utilizing funds from the agent’s reserve account.

Question: What about the Proof of Claim (POC) process?

Answer: The Liquidator has implemented a claim’s process and has adopted a separate Proof of Claim form (Bail POC) for both Amwest & Far West. Claims will be subject to adjudication by the Liquidator. The POC bar date for Far West (last day for filing a timely POC) is September 30, 2002 while the POC bar date for Amwest was June 7, 2002. Amwest will continue to accept any and all claims filed on the prescribed Proof of Claim (POC) forms, however all POC forms received with a postmark after the bar date (June 7, 2002) will be considered late. Some states have initiated ancillary receivership or liquidation proceedings and those bar dates may differ from those established by Amwest or Far West. To the extent a claim is filed in an ancillary proceeding, you must comply with the bar date established by that state in order for a claim to be considered timely filed in the ancillary proceeding. All communications should be directed to the Court Division of Amwest/Far West at P.O. Box 4500 Woodland Hills, CA 91365. The phone number is (800) 423-2245. If you need Proof of Claim forms, please contact us. Please see above for information as to the agent’s obligation to mail these forms to Courts and defendants.

Question: If the agent chooses to execute a new bond, may the premium be paid from defendant collateral being held by the agent that secures the Amwest/Far West bail bond?

Answer: Only with prior approval from the depositor of the collateral. Furthermore, we believe the judge should first acknowledge the cancellation of the Amwest/Far West bail bond.

Question: Now that the bonds are cancelled, will contractual bail agents of Amwest/Far West have their reserve accounts released?

Answer: Reserve account monies will not be released until agents can show that:

1. all of their bonds have been exonerated,

2. they have reported and paid for all executed powers,

3. they have returned all unused powers,

4. they have paid Amwest/Far West all monies owed.

Question: Are agent Build up Fund or Reserve account funds safe?

Answer: Yes. All such accounts remain on deposit in segregated trust accounts at an appropriate financial institution. They have not become the property of the Liquidator. These funds are held by the Liquidator as security for the agents’ indemnity obligations pursuant to the terms of the agents’ contract.

Question: What if the court does not exonerate the bonds pursuant to the cancellation of the bail bonds?

Answer: We hope that the courts will react to the cancellation process by ordering the bail bond exonerated. However, we realize that not all judges will issue such an order. In all cases, the judge needs to have taken some affirmative action acknowledging the cancellation. Some examples would be, if the court orders that the defendant be released upon his own recognizance, orders the defendant remanded, or orders the defendant be rebailed. In these cases, upon receipt of necessary documentation, we will consider the bond to have been discharged.

Question: As a result of the cancellation of the bail bonds, is the person who paid the agent the premium entitled to a refund of that premium?

Answer: No. This is because premiums for bail bonds are fully earned upon release of the defendant from custody.