2005 Texas Insurance Code CHAPTER 2652. ESCROW OFFICERS

INSURANCE CODE

CHAPTER 2652. ESCROW OFFICERS

SUBCHAPTER A. GENERAL PROVISIONS


	§ 2652.001. LICENSE AND BOND OR DEPOSIT REQUIRED.  An 
individual may not act as an escrow officer unless the individual:
		(1)  holds a license issued by the department;  and                           
		(2)  maintains a surety bond or deposit required under 
Subchapter C.        

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.002. EMPLOYMENT OF ESCROW OFFICER.  (a) A title 
insurance agent or direct operation may not employ an individual as 
an escrow officer unless the individual holds a license and 
maintains a surety bond or deposit as required by this chapter.
	(b)  A title insurance agent or direct operation may not 
permit an individual to act as an escrow officer in this state 
before the agent or direct operation has complied with Sections 
2652.151 and 2652.152 with respect to the individual.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.003. ATTORNEY ACTING AS ESCROW OFFICER.  (a) 
Notwithstanding Section 2652.001, an attorney is not required to be 
licensed as an escrow officer to perform the duties of an escrow 
officer as defined by Section 2501.003.
	(b)  An attorney may hold a license to act as an escrow 
officer.  An employee of an attorney licensed as an escrow officer 
also may hold a license to act as an escrow officer.  An attorney 
licensed as an escrow officer shall comply with the provisions of 
this code that apply to escrow officers and trust funds as if the 
attorney were a title insurance agent.
	(c)  Notwithstanding any other provision of this chapter, a 
title insurance company or title insurance agent may not permit an 
attorney to conduct the attorney's business in the name of the 
company or agent unless the attorney and the attorney's bona fide 
employees who close transactions are licensed escrow officers.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.004. TRUST FUND ACCOUNT DISBURSEMENTS.  (a) An 
escrow officer may not disburse funds from a trust fund account 
until good funds related to the transaction have been received and 
deposited in the account in amounts sufficient to fund any 
disbursements from the transaction.
	(b)  An escrow officer is not liable for a violation of this 
section if the violation:
		(1)  was not intentional;  and                                                
		(2)  resulted from a bona fide error despite the 
maintenance of procedures reasonably adopted to avoid the error.
	(c)  The commissioner shall adopt rules and definitions to 
implement this section.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.005. ESCROW ACCOUNT AUDIT.  Each escrow account 
used by a licensed escrow officer for closing a transaction is 
subject to the audit requirements of Subchapter D, Chapter 2651.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.006. RECORD OF ESCROW OFFICERS.  The department 
shall maintain a record of the name and address of each escrow 
officer licensed by the department in a manner that ensures that the 
escrow officers employed by any title insurance agent or direct 
operation in this state may be conveniently determined.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          

SUBCHAPTER B. LICENSE APPLICATION AND RENEWAL


	§ 2652.051. LICENSE APPLICATION.  (a) Before an initial 
license is issued to an individual to act as an escrow officer in 
this state for a title insurance agent or direct operation, the 
title insurance agent or direct operation must file an application 
for an escrow officer's license with the department on forms 
provided by the department.
	(b)  The application must be:                                                  
		(1)  accompanied by a nonrefundable license fee;  and                         
		(2)  signed and sworn to by the title insurance agent or 
direct operation and by the proposed escrow officer.
	(c)  The completed application must state that:                                
		(1)  the proposed escrow officer is an individual who 
is a bona fide resident of this state;
		(2)  the proposed escrow officer is an attorney or is a 
bona fide employee of:
			(A)  an attorney licensed as an escrow officer;  
or                        
			(B)  a title insurance agent or direct operation;                            
		(3)  the proposed escrow officer has reasonable 
experience or instruction in the field of title insurance;  and
		(4)  the title insurance agent or direct operation does 
not know of any fact or condition that disqualifies the proposed 
escrow officer from receiving a license.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.052. LICENSE AND RENEWAL FEES.  (a) The department 
shall prescribe the license fee in an amount not to exceed $50.
	(b)  License fees, and renewal fees collected under Section 
2652.152, shall be deposited to the credit of the Texas Department 
of Insurance operating account to be used by the department to 
enforce this chapter and any other law of this state that regulates 
escrow officers for title insurance agents or direct operations.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.053. LICENSE ISSUANCE.  The department shall issue 
a license if the department determines, based on the application 
and the department's investigation, that the requirements of 
Section 2652.051 are satisfied.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.054. DUPLICATE LICENSE.  (a) The department shall 
collect in advance a fee from a title insurance agent or direct 
operation that requests a duplicate license.
	(b)  The department shall prescribe the fee in an amount not 
to exceed $20.  

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.055. LICENSE TERM.  Unless a system of staggered 
license renewal is adopted under Section 4003.002, a license 
expires on the second June 1 following the date of issuance.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.056. AUTOMATIC TERMINATION OF LICENSE.  The 
license of each escrow officer employed by a title insurance agent 
or direct operation that surrenders its license or has its license 
revoked by the department is automatically terminated without 
notice.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.057. LICENSE SURRENDER OR FORFEITURE.  (a) An 
escrow officer may voluntarily surrender the escrow officer's 
license at any time by giving notice to the department.
	(b)  An escrow officer automatically forfeits the escrow 
officer's license if the officer is not employed as an escrow 
officer.
	(c)  A surrender or forfeiture of a license under this 
section does not affect the culpability of the license holder for 
conduct committed before the effective date of the surrender or 
forfeiture.  The department may institute a disciplinary proceeding 
against the former license holder for conduct committed before the 
effective date of the surrender or forfeiture.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.058. CONTINUING EDUCATION.  (a) To protect the 
public and to preserve and improve the competence of license 
holders, the department shall require as a condition of holding an 
escrow officer license that the license holder enroll in and attend 
or teach continuing education consisting of class instruction, 
lectures, seminars, or other forms of education approved by the 
department for escrow officers.
	(b)  The department shall prescribe the required number of 
hours of continuing education, not to exceed 15 hours in each 
two-year license period.
	(c)  Continuing education instruction must be designed to 
refresh the license holder's understanding of:
		(1)  basic principles and coverages relating to title 
insurance;            
		(2)  recent and prospective changes in those principles 
and coverages;      
		(3)  applicable rules of the commissioner and laws;                           
		(4)  the proper conduct of the license holder's 
business;  and              
		(5)  the duties and responsibilities of the license 
holder.                 
	(d)  The department may permit a license holder to complete 
an equivalent course of study and instruction by mail if, because of 
the remote location of the license holder's residence or business, 
the license holder is unable to attend educational sessions with 
reasonable convenience.
	(e)  On written request by the license holder, the department 
may extend the time for the license holder to comply with the 
requirements of this section or may exempt the license holder from 
all or part of the requirements for a license period if the 
department determines that the license holder is unable to comply 
with the requirements because of illness, medical disability, or 
another extenuating circumstance beyond the control of the license 
holder.  The commissioner shall prescribe the criteria for an 
extension or exemption by rule.
	(f)  The commissioner shall adopt rules to administer this 
section.          

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          

SUBCHAPTER C. BOND AND DEPOSIT REQUIREMENTS


	§ 2652.101. BOND REQUIRED.  (a) A title insurance agent 
or direct operation shall obtain, at its own expense, a bond for its 
escrow officers payable to the department.  The bond shall obligate 
the principal and surety to pay for any pecuniary loss sustained by 
the title insurance agent or direct operation through an act of 
fraud, dishonesty, forgery, theft, embezzlement, or wilful 
misapplication by an escrow officer, either directly and alone or 
in conspiracy with another person.
	(b)  The bond must be:                                                         
		(1)  of a type approved by the department;  and                               
		(2)  issued by a surety licensed by the department to do 
business in this state.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.102. ALTERNATIVE TO BOND.  (a) Instead of the bond 
required by Section 2652.101, a title insurance agent or direct 
operation may deposit with the department:
		(1)  cash;                                                                    
		(2)  irrevocable letters of credit issued by a 
financial institution insured by an agency of the United States;  or
		(3)  securities approved by the department.                                   
	(b)  The cash, letters of credit, or securities deposited 
under this section are subject to the conditions required for a bond 
under Section 2652.101.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.103. AMOUNT OF BOND OR DEPOSIT.  The amount of the 
bond or deposit required under this subchapter is determined by 
multiplying the number of escrow officers employed by the title 
insurance agent or direct operation by $5,000, except that the 
maximum amount of the bond or deposit required under this 
subchapter is $50,000.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.104. EXAMINATION OF LOSS COVERED BY BOND OR 
DEPOSIT.  (a) At any time it appears that a loss covered by a bond 
or deposit has occurred, the department may require the escrow 
officer to appear in Travis County, with records the department 
determines to be proper, for an examination.
	(b)  The department shall specify a date for the examination 
that is not earlier than the 10th day or later than the 15th day 
after the date of service of notice of the requirement to appear.  
Copies of the notice shall be sent to any title insurance agent or 
direct operation concerned.
	(c)  If after the examination the department determines that 
a loss covered by the bond or deposit has occurred, the department 
shall immediately notify the appropriate title insurance agent or 
direct operation and the surety on the bond, if applicable, and 
prepare a written statement of the facts of the loss and deliver the 
statement to the attorney general.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.105. INVESTIGATION BY ATTORNEY GENERAL.  (a) On 
receipt of a written statement under Section 2652.104, the attorney 
general shall investigate the charges and, on determining that a 
loss covered by the bond or deposit has occurred, shall enforce the 
liability by collecting against the deposited cash or securities or 
by filing suit on the bond.
	(b)  A suit brought under this section shall be filed in the 
name of the department in Travis County for the benefit of all 
parties who have suffered any loss covered by the bond or deposit.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          

SUBCHAPTER D. DUTIES OF TITLE INSURANCE AGENTS AND DIRECT 
OPERATIONS REGARDING ESCROW OFFICERS


	§ 2652.151. LIST OF ESCROW OFFICERS.  (a) A title 
insurance agent or direct operation shall certify to the 
department, not later than the expiration date of the title 
insurance agent's or direct operation's license, the name and 
address of each individual employed by the title insurance agent or 
direct operation to serve as an escrow officer in this state.
	(b)  The certification required by this section must be on a 
form provided by the department.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.152. RENEWAL.  A title insurance agent or direct 
operation shall apply for renewal and pay a nonrefundable license 
renewal fee prescribed by the department in an amount not to exceed 
$50 for each escrow officer listed by the title insurance agent or 
direct operation under Section 2652.151.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.153. NOTICE OF TERMINATION.  A title insurance 
agent or direct operation that terminates the employment of a 
licensed escrow officer shall:
		(1)  immediately notify the department in writing of 
the termination and request cancellation of the license;  and
		(2)  notify the escrow officer of the action by the 
title insurance agent or direct operation.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          

SUBCHAPTER E. LICENSE DENIAL AND DISCIPLINARY ACTION


	§ 2652.201. GROUNDS FOR LICENSE DENIAL OR DISCIPLINARY 
ACTION.  The department may deny an application for a license or 
discipline an escrow officer under Sections 4005.102, 4005.103, and 
4005.104 if the department determines that the applicant or license 
holder has:
		(1)  wilfully violated this title;                                            
		(2)  intentionally made a material misstatement in the 
license application; 
		(3)  obtained or attempted to obtain the license by 
fraud or misrepresentation;
		(4)  misappropriated or converted to the escrow 
officer's own use or illegally withheld money belonging to a title 
insurance agent, direct operation, or another person;
		(5)  been guilty of fraudulent or dishonest practices;                        
		(6)  materially misrepresented the terms and 
conditions of a title insurance policy or contract;  or
		(7)  failed to complete all educational requirements.                         

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.          


	§ 2652.202. LICENSE APPLICATION AFTER DENIAL, REFUSAL, OR 
REVOCATION.  (a) An applicant whose license application has been 
denied or refused or a license holder whose license has been revoked 
under this subchapter may not file another application for a 
license as an escrow officer before the first anniversary of:
		(1)  the effective date of the denial, refusal, or 
revocation;  or          
		(2)  the date of a final court order affirming the 
denial, refusal, or revocation if judicial review is sought.
	(b)  A license application filed after the time required by 
this section may be denied by the department unless the applicant 
shows good cause why the denial, refusal, or revocation should not 
be a bar to the issuance of a license.

Added by Acts 2003, 78th Leg., ch. 1274, § 6, eff. April 1, 2005.