California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 9 - Escrow Agents › Article 3 - Bonds › Section 1723 - Form and Amount of Fidelity Bond

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Applicants for an escrow agent's license
				  and licensees that are not required to be members of Escrow Agents' Fidelity
				  Corporation pursuant to Section
				  17312 of
				  the Financial Code or that will engage in or are engaged in the business of
				  receiving escrows for deposit or delivery of the types of transactions not
				  specified in subdivision (c) of Section
				  17312 of
				  the Financial Code shall do the following:
(1)
				  File with the Department a fidelity bond, providing fidelity coverage on each
				  officer, director, trustee, and employee of not less than $125,000, for the
				  purpose of indemnifying the escrow agent, or the escrow agent's successor in
				  interest, for loss of trust obligations held by the escrow agent as a result of
				  the fraudulent or dishonest abstraction, misappropriation, or embezzlement of
				  trust obligations by an officer, director, trustee, or employee of the escrow
				  agent. The fidelity bond may be either a primary commercial blanket bond or a
				  blanket position bond, but shall be written by an insurer who has been licensed
				  by the Department of Insurance of the State of California. The fidelity bond
				  shall contain a rider as set forth in subsection (b). Section
				  1725 of these rules shall not
				  apply to a bond required under this section.
(2) The licensee shall maintain minimum
				  fidelity coverage in accordance with the following schedule:
Monthly average escrow
							 liability
Minimum
							 coverage
Up to $125,000
							 ......................................................................................
$ 125,000
$125,001 to $250,000
							 .......................................................................................
$ 250,000
$250,001 to $500,000
							 .......................................................................................
$ 500,000
$500,001 to $750,000
							 .......................................................................................
$ 750,000
$750,001 to $1,000,000
							 .......................................................................................
$1,000,000
$1,000,001 to $3,000,000
							 .......................................................................................
$2,000,000
$3,000,001 to $5,000,000
							 .......................................................................................
$3,000,000
$5,000,001 to $7,500,000
							 .......................................................................................
$4,000,000
$7,500,001 to $10,000,000
							 .......................................................................................
$5,000,000
and additional coverage at the rate of $1.00 for every
					 $3.00 of average escrow liability in excess of $10,000,000.
The foregoing schedule is a guide for the determination of
					 the minimum fidelity coverage required of a licensee and shall not limit the
					 Department in requiring any additional fidelity coverage that may be required
					 under the circumstances.