LEGISLATIVE COUNSEL'S DIGEST


SB 204, as amended, Benoit. Financial transactions: escrow
agents. agents: exchange facilitators.
Existing law provides for the licensing and regulation of escrow
agents by the Commissioner of Corporations. Existing law, until
January 1, 2010, requires each escrow agent to pay an annual license
fee of up to $2,800 for each office or location and authorizes the
commissioner to additionally levy a special assessment of up to $500,
which is required to be paid by the escrow agent within 30 days of
receipt of notification by the commissioner, for each office or
location in certain circumstances. Commencing January 1, 2010,
existing law instead requires each escrow agent to pay to the
commissioner the agent's pro rata share of the commissioner's annual
administrative costs and expenses, as specified.
This bill would repeal the provisions that would require an escrow
agent, commencing January 1, 2010, to pay to the commissioner the
agent's pro rata share of the commissioner's annual administrative
costs and expenses. The bill would, instead, continue the requirement
for an escrow agent to pay an annual license fee of up to $2,800 for
each office or location. The bill would authorize the special
assessment that may be levied by the commissioner to be in an amount
of up to $1,000 for each office or location. The bill would require
an escrow agent to pay the special assessment within 60 days of
notification by the commissioner.
Existing law provides that the license of an escrow agent remains
in effect until surrendered, revoked, or suspended. Existing law sets
forth the procedure for the surrender of the license of an escrow
agent, and requires a surrendering licensee to, among other things,
tender his or her license and all other indicia of licensure to the
commissioner, and submit a closing audit to the commissioner, as
specified. Existing law provides that a license is not surrendered
until the commissioner has reviewed and accepted the closing audit,
made a determination that there is no violation of law, and, in
writing, accepted tender of the license.
This bill would delete the requirement that the commissioner make
a determination that there is no violation of law and instead require
a determination that acceptance of the surrender is in the public
interest.
Existing law requires a person engaging in business as an exchange
facilitator, as defined, to comply with certain bonding and
insurance requirements that may include, among other things,
maintaining a fidelity bond or bond and a policy of errors and
omissions insurance executed by an insurer authorized to do business
in this state. Existing law authorizes a person to file a claim to
recover damages on the bonds, deposits, or letters of credit
maintained by an exchange facilitator for a failure to comply with
the provisions regulating exchange facilitators.
This bill would authorize the fidelity bond or bonds and the
policy of errors and omissions insurance maintained by an exchange
facilitator to be executed by specified eligible surplus line
insurers. The bill would require claims for damages to be subject to
the terms and conditions of the bonds, deposits, or letters of credit
maintained by an exchange facilitator and would provide that the
amounts of those bonds, deposits, or letters of credit shall be
reduced to the extent of any payment made.

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Comments/questions on SB 204 (Benoit and Huff and Runner): Financial transactions: escrow agents: exchange facilitators.