Idaho § 41-2711 - Requirements for title insurance related business - Bonds

§ 41-2711. Requirements for title insurance related business - Bonds

An escrow officer is an officer or an employee of a title insurance agent whose duties include any of the following: handling escrows, settlements, closings, and funds related thereto, except there are not to be included employees whose duties are wholly clerical or to act only as cosigners of escrow drafts. Each title insurance agent holding a license under this chapter, shall file with the director of insurance on or before January 1, of each year, and amend the same for new escrow officers employed within thirty (30) days of such employment, upon forms furnished by the director of insurance, the name and address of each person employed by it to serve in the capacity of an escrow officer. No title insurance agent shall permit any person to act as an escrow officer within this state beyond the time for compliance with the foregoing conditions. The director of insurance shall keep a record of the names and addresses of all escrow officers whose names have been duly filed with him as employed by title insurance agents within the state.

Every title insurance agent shall procure at its expense and file with the director of insurance a corporate surety bond of the type hereinafter set forth. The bond shall be in the minimum amount of ten thousand dollars ($10,000) per county in which the title insurance agent is licensed and increased in increments of ten thousand dollars ($10,000) corresponding to each additional person employed as an escrow officer in the county, provided that the maximum bond required of any title insurance agent shall be fifty thousand dollars ($50,000) irrespective of the number of counties in which the agent is licensed or the number of escrow officers employed and provided that the manager or supervisor of the title insurance agent’s principal office in a county shall not be counted as an escrow officer in determining the amount of the title insurance agent’s bond. The bond shall run to the director of insurance and the condition of the bond shall be that the title insurance agent shall pay damages which may be sustained by the public in the conduct of title insurance related business as defined in section 41-2704 (3), Idaho Code, by reason of the title insurance agent’s failure to comply with the provisions of this act and the regulations promulgated pursuant thereto by the director of insurance which shall include damages sustained by reason of fraud, dishonesty, forgery, theft or wilful misapplication of funds committed by the title insurance agent and its employees. Such bond(s) may be by blanket form coverage. In lieu of such bond, cash or securities approved by the director in like amount may be deposited through the director of insurance under custodial arrangement as provided for deposits by insurers under section 41-804 , Idaho Code. The cash or securities so deposited shall be subject to the same condition as the bond.

If at any time it appears to the director that the terms of such bond may have been violated, the director may require the agent to appear in Boise with such records as he deems proper on the date not earlier than ten (10) days and not later than twenty-five (25) days after service of such notice, and there conduct an examination into the matter. If, upon examination the director is satisfied that the terms of the bond have been violated, he shall forthwith notify the surety and prepare a written statement covering the facts and deliver it to the attorney general of Idaho, with copy to the surety, whose duty it shall be to investigate the charges, and if satisfied that the terms of the bond have been violated, then to enforce the liability against the cash or securities, or by suit on said bond in Ada County in the name of the director of the department of insurance for the benefit of all parties who have suffered any loss because of the breach of the terms of said bond or deposit.

The provisions of this section as to escrow officers and the requirement for filing escrow fee rates with the director shall also be applicable to any corporation twenty-five per cent (25%) or more of the capital stock or ownership of which is directly or indirectly owned by a title insurer or title insurance agent, or any person or entity directly or indirectly owning a majority of the stock or ownership of such insurer or agent.

[I.C., sec. 41-2711, as added by 1973, ch. 135, sec. 8, p. 252; am. 1975, ch. 209, sec. 1, p. 580.]