44-19,116 Conditions for providing escrow, security, settlement, or closing services and maintaining escrow and security deposit accounts. - Nebraska Statutes

44-19,116. Conditions for providing escrow, security, settlement, or closing services and maintaining escrow and security deposit accounts.(1)(a) A title insurance agent may operate as an escrow, security, settlement, or closing agent subject to the requirements of subdivisions (b) through (f) of this subsection.(b) All funds deposited with the title insurance agent in connection with an escrow, settlement, closing, or security deposit shall be submitted for collection to or deposited in a separate fiduciary trust account or accounts in a qualified financial institution no later than the close of the next business day in accordance with the following requirements:(i) The funds shall be the property of the person or persons entitled to them under the provisions of the escrow, settlement, security deposit, or closing agreement and shall be segregated for each depository by escrow, settlement, security deposit, or closing in the records of the title insurance agent in a manner that permits the funds to be identified on an individual basis; and(ii) The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted.(c) Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying how and to whom such funds may be disbursed.(d) Funds held in a security deposit account shall be disbursed only pursuant to a written agreement specifying:(i) What actions the indemnitor shall take to satisfy his or her obligation under the agreement;(ii) The duties of the title insurance agent with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and(iii) Any other provisions the director may require.(e)(i) Disbursements may be made out of an escrow, settlement, or closing account only if funds in an amount at least equal to the disbursement have first been received and if the funds received are in one of the following forms:(A) Lawful money of the United States;(B) Wired funds when unconditionally held by the title insurance agent;(C) Cashier's checks, certified checks, bank money orders, or teller's checks issued by a federally insured financial institution and unconditionally held by the title insurance agent; and(D) United States treasury checks, federal reserve bank checks, federal home loan bank checks, State of Nebraska warrants, and warrants of a city of the metropolitan or primary class.(ii) For purposes of this subdivision, federally insured financial institution means an institution in which monetary deposits are insured by the Federal Deposit Insurance Corporation or National Credit Union Administration.(f) A title insurance agent who holds funds relating to an exchange under section 1031 of the Internal Revenue Code shall provide written disclosure, at or before closing, to the person whose funds are being held, on a separate paper with no other information on the paper, which states that:(i) Such services performed by a title insurance agent are not regulated by the Department of Banking and Finance, the Department of Insurance, or any other agency of the State of Nebraska or by any agency of the United States Government;(ii) The safety and security of such funds is not guaranteed by any agency of the State of Nebraska or of the United States Government or otherwise protected by law; and(iii) The owner of such funds should satisfy himself or herself as to the safety and security of such funds.(2) If the title insurance agent is appointed by two or more title insurers and maintains fiduciary trust accounts in connection with providing escrow, closing, or settlement services, the title insurance agent shall allow each title insurer access to the accounts and any or all of the supporting account information in order to ascertain the safety and security of the funds held by the title insurance agent.(3) Nothing in the Title Insurance Agent Act shall be deemed to prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction if all parties consent to the transaction in writing.(4) Nothing in this section is intended to amend, alter, or supersede other sections of the act or the laws of this state or the United States regarding an escrow holder's duties and obligations.(5) The director may prescribe a standard agreement for escrow, settlement, closing, or security deposit funds. SourceLaws 1997, LB 53, § 39; Laws 1999, LB 259, § 7; Laws 2002, LB 1139, § 21; Laws 2003, LB 216, § 10; Laws 2004, LB 155, § 4.