30-909 FINANCIAL RESPONSIBILITY -- FIDELITY BOND -- ERRORS AND OMISSIONS POLICY -- SURETY BOND. - Idaho Statutes

TITLE 30

CORPORATIONS

CHAPTER 9

IDAHO ESCROW ACT

30-909. Financial responsibility -- Fidelity bond -- Errors and omissions policy -- Surety bond. At the time of filing an application for an escrow agency license, and at the time of any renewal or reinstatement of such license, the applicant or licensee shall provide satisfactory evidence to the director of having obtained the following as evidence of financial responsibility:

(1) A fidelity bond providing coverage in the aggregate amount of two hundred thousand dollars ($200,000) with a deductible no greater than ten thousand dollars ($10,000) covering the applicant or licensee, as well as each corporate officer, partner, managing member, escrow agent and employee of the applicant or licensee;

(2) An errors and omissions policy issued to the escrow agency providing coverage in the minimum aggregate amount of fifty thousand dollars ($50,000) or, alternatively, cash or securities in such amount deposited in a depository approved by the director on condition that they be available for payment of any claim payable under an equivalent errors and omissions policy in such amount; and

(3) A surety bond in an amount as set forth in paragraphs (a) through (f) of this subsection. The surety bond shall be in a form provided by the director and the applicant shall be named as principal. The bond shall be executed by the applicant as obligor and by a company authorized to do a surety business in Idaho. The bond shall be conditioned that the obligor as licensee will faithfully conform to and abide by this chapter and all rules adopted thereunder, and shall be liable for reimbursement to all persons who suffer loss by reason of a violation of this chapter or rules adopted thereunder. The surety bond provided shall be in an amount based upon the average month-end balance of the escrow trust accounts of the applicant or licensee for the preceding calendar year, in increments as described in the following subsections:

(a) For average month-end escrow trust account balances of fifty thousand dollars ($50,000) or less, a surety bond in the amount of twenty thousand dollars ($20,000) is required;

(b) For average month-end escrow trust account balances of more than fifty thousand dollars ($50,000) but not more than two hundred fifty thousand dollars ($250,000), a surety bond in the amount of fifty thousand dollars ($50,000) is required;

(c) For average month-end escrow trust account balances of more than two hundred fifty thousand dollars ($250,000) but not more than five hundred thousand dollars ($500,000), a surety bond in the amount of one hundred thousand dollars ($100,000) is required;

(d) For average month-end escrow trust account balances of more than five hundred thousand dollars ($500,000) but not more than seven hundred fifty thousand dollars ($750,000), a surety bond in the amount of one hundred fifty thousand dollars ($150,000) is required;

(e) For average month-end escrow trust account balances of more than seven hundred fifty thousand dollars ($750,000) but not more than one million dollars ($1,000,000), a surety bond in the amount of two hundred thousand dollars ($200,000) is required;

(f) For average month-end escrow trust account balances of more than one million dollars ($1,000,000), a surety bond in the amount of two hundred fifty thousand dollars ($250,000) is required.

(4) The escrow agency licensee shall place on file with the director the surety bond and proof of its errors and omissions coverage and its fidelity bond, which bonds and insurance coverage shall be continuous during the period of licensure of the licensee whether or not the bond is renewed, continued, reinstated, reissued, or otherwise extended, replaced or modified, including increases or decreases in the penal sum. The surety upon the bond shall not be liable in an aggregate amount exceeding the penal sum set forth on the face of the bond.

(5) The surety bond shall name as beneficiaries:

(a) The state, for payment of any costs incurred and charges made in connection with any escrow agency’s insolvency or default, including costs and charges relating to an examination and receivership of any escrow agency; and

(b) Any person who has a claim against the surety on the bonds based on any default or violation of any duty or obligation of the escrow agency.

(6) In lieu of the bonds required by this section, a certificate of deposit issued by a financial institution authorized to conduct business in Idaho and made payable to the director may be provided to the director in the same principal amount as required for the bonds. The interest on the certificate of deposit shall be payable to the escrow agency licensee. The certificate of deposit shall be maintained at all times during which the licensee is authorized to engage in business as an escrow agency under this chapter, and must provide that it will remain in effect for at least three (3) years following discontinuance of operations unless released earlier by the director.

(7) The director may, in the public interest and for good cause shown, waive or modify any requirements of this section.