(a) All officers, directors, trustees, and employees of an escrow agent, whether or not compensated, who have access to money or negotiable securities belonging to the escrow agent or in the possession of the escrow agent in the regular discharge of their duties, or persons who draw checks upon the escrow agent or upon the trust funds of the escrow agent in the regular discharge of their duties, before entering upon their duties and throughout the entire term of their office and employment and any subsequent term thereof, shall furnish to the escrow agent a bond indemnifying the escrow agent against loss of money or property. No officer, director, trustee, or employee shall enter upon their duties or have access to money or negotiable securities or draw checks upon the escrow agent or the trust funds of an escrow agent prior to complying with such rules as the commissioner shall adopt with respect to the qualifications of these officers, directors, trustees, or employees to assume their duties.
The commissioner shall prescribe the aggregate amount of the bond and the terms during which the bond runs. The sufficiency of the sureties on the bond are at all times subject to the approval of the commissioner. The bond shall be filed in the commissioner’s office. The aggregate liability of the surety for all claims shall in no event exceed the penal sum of the bond.
Terms Used In California Financial Code 17203.1
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- escrow agent: as used in this division includes joint control agents and Internet escrow agents. See California Government Code 25831
- Trustee: A person or institution holding and administering property in trust.
(b) The commissioner may at any time require an additional bond or surety to be filed when in the commissioner’s opinion any bond then in force is insufficient for any reason.
(Amended by Stats. 1984, Ch. 548, Sec. 1.)