The Ten Percent Was Never Law: Inside the $69 Million Settlement

For twenty years, the answer to "can you do better than ten percent?" has been some version of "no, the rate is set by law." A proposed $69.4 million settlement in a California federal court says that answer was never true, and that the sureties knew it.

If a judge signs off, the companies backing a large share of California bail paper will pay out to roughly two million people, stop coordinating on price, and tell the agents who write their bonds something the industry has spent two decades not saying out loud: the premium is negotiable.

What Was Alleged

The case is In re California Bail Bond Antitrust Litigation, filed in the U.S. District Court for the Northern District of California and heard by Judge Jon Tigar. It has been running for more than seven years.

The core allegation is not that ten percent is too high. It is that ten percent was a floor the sureties agreed to hold, rather than a price the market set. Plaintiffs say the carriers orchestrated a default price of ten percent of the bond amount and then worked to stamp out the discounting that competition would otherwise have produced. Alongside that, the complaint alleges customers were led to believe the premium was fixed by law and therefore not negotiable, which is a tidy way to stop anyone asking.

The timing in the complaint is the part worth sitting with. The alleged conspiracy is dated from 2004, the year the California Supreme Court confirmed that bail agents could legally rebate part of the standard premium approved by the state Department of Insurance. On the plaintiffs' account, the moment discounting became clearly lawful is the moment the coordination started.

Who Is Paying What

The settlements filed in late June break down as follows: companies affiliated with Crum & Forster at $18.8 million, American Surety Company at $15.2 million, and Accredited Surety & Casualty Company and American Contractors Indemnity Company at $9.4 million each. Those, with several others, make up the $66.3 million reported across nine sureties. Add an earlier $3.1 million settlement with two other defendants and the total reaches roughly $69.4 million.

The class is large: approximately two million people who paid part or all of a commercial bail bond premium in a California state criminal case between 2004 and 2026.

This does not close the matter. Litigation continues against International Fidelity Insurance Company and other defendants who have not settled. A settlement is also not a finding of liability, and the sureties have not conceded wrongdoing by paying.

The Part That Actually Changes Your Week

Most coverage of this case is written for the two million consumers getting a cheque. That is not the interesting part for anyone writing bonds.

The interesting part is the reported injunctive term. If the settlements are approved, the settling insurers must stop coordinating on price and must notify bail agents that premiums are negotiable. Read that as an operational fact rather than a legal one. Every agent on those carriers' paper is due to receive, in writing, from their own surety, a statement that the number they have been quoting as fixed is not fixed.

Your competitors will get that letter too.

Two Ways to Read It

The pessimistic read is obvious. If ten percent is openly negotiable and every agent in the county knows it, premium compresses, and it compresses fastest in the markets with the most agents chasing the same jail. Nobody who has watched a commoditized market do this needs the ending explained.

The optimistic read is that this has been the actual state of California law since 2004 and the sky did not fall, because most families are not price shopping bail at two in the morning. What they are buying is the person who answers the phone, knows the jail, and completes the paperwork without a mistake that costs them a day. Price competition punishes agencies with nothing else to offer. It does not do much to an agency with a real reputation.

Which read is right probably depends on your market and on what you have built beyond a rate card.

What to Do About It

Nothing dramatic. But a few things are worth doing before the letters land rather than after.

Find out whether your carrier is a settling defendant. Four are named above; the full list of nine is worth confirming with your surety directly rather than inferring from a headline.

Ask your carrier what the notice will say and when it goes out. If your clients are going to be told premiums are negotiable, you would rather know the date in advance than hear it from a customer.

Work out, honestly, what you charge for beyond the paper. If the answer is "we are the ones who pick up," that is a real answer, and it is worth being able to say it out loud when someone asks for a discount.

Watch your own state. This case is California, and it turns on a California Supreme Court decision about rebating. It does not automatically travel. But the alleged mechanism, a default rate that everyone treats as law, is not a California invention, and plaintiffs' firms read each other's filings.

Frequently Asked Questions

Q: Does this mean the ten percent premium is illegal?
A: No. The allegation is not that the rate is unlawful, it is that the sureties agreed among themselves to hold it as a floor and suppress discounting, which is a competition problem rather than a rate problem. Rate rules vary by state, and you should confirm what applies to you with your state's insurance regulator or a licensed local attorney.

Q: Have the sureties admitted to price fixing?
A: No. These are proposed settlements, they require court approval, and settling a claim is not the same as conceding it. Several defendants, including International Fidelity, have not settled and the case against them continues.

Q: Will this change what I can charge outside California?
A: Not directly. The case is in a California federal court and rests on California's rebating rules. Whether your state permits rebating or discounting is a separate question for your regulator. The practical spillover, if any, is likely to be reputational and competitive rather than legal.

Q: I write on one of the settling carriers. What happens to me?
A: Based on reporting, the settling insurers would have to stop coordinating on price and notify agents that premiums are negotiable. Beyond that, nothing about your appointment or your paper is reported to change. Ask your carrier directly rather than relying on press coverage, including this piece.

Sources: Reuters reported the $69.4 million total; MLex reported nine sureties settling for $66.3 million (read it here); case background and the rebating history are from plaintiff counsel Lieff Cabraser (read it here). Case No. 4:19-cv-00717-JST, N.D. Cal. This piece is commentary and is not legal advice; confirm anything that affects your business with your carrier, your state regulator, or a licensed local attorney.