6-814

6-814. Procedure for licensing; surety
bond

A. Every escrow agent before engaging in the escrow business shall file with the
superintendent an application for a license, in writing, verified by oath and in the form
prescribed by the superintendent. It shall state the location of the principal office
and all branch offices in this state, the name or style of doing business, the names and
residence and business addresses of all persons holding an interest in the business as
principals, partners, officers, trustees and directors, specifying as to each his
capacity and title, the general plan and character of operation and the length of time
they have been engaged in the escrow business.

B. The superintendent may require additional information he considers necessary in
connection with any application for a license under this article.

C. At the time of filing an application for a license and at all times while
holding the license, the applicant shall deposit and maintain with the superintendent a
corporate surety bond in the amount of one hundred thousand dollars payable to any person
injured by the failure of the licensee to comply with the requirements of this chapter or
for the wrongful act, default, fraud or misrepresentation of the licensee or his
employees and to this state for the benefit of the person injured and executed by a
surety company qualified to do business in this state.

D. Notwithstanding section 35-155, in lieu of the total corporate surety bond
required by this section, an applicant or licensee may deposit with the superintendent a
deposit in the form of cash or alternatives to cash in the amount of one hundred thousand
dollars. The superintendent may accept as an alternative to cash any of the following:

1. Certificates of deposit or investment certificates which are payable or assigned
to the state treasurer, issued by banks doing business in this state and fully insured by
the federal deposit insurance corporation or any successor institution.

2. Certificates of deposit, investment certificates or share accounts which are
payable or assigned to the state treasurer, issued by a savings and loan association
doing business in this state and fully insured by the federal deposit insurance
corporation or any successor institution.

3. Certificates of deposit, investment certificates or share accounts which are
payable or assigned to the state treasurer, issued by a credit union doing business in
this state and fully insured by the national credit union administration or any successor
institution.

E. The superintendent shall deposit the cash or alternatives to cash received under
this section with the state treasurer. The state treasurer shall hold the cash or
alternatives to cash in the name of this state to guarantee the faithful performance of
all legal obligations of the person required to post the bond. The person is entitled to
receive any accrued interest earned from the alternatives to cash. The state treasurer
may impose a fee to reimburse the state treasurer for administrative expenses. The fee
shall not exceed ten dollars for each cash or alternatives to cash deposit and shall be
paid by the licensee. The state treasurer may prescribe rules relating to the terms and
conditions of each type of security provided by this section.

F. A deposit of cash or an assignment of an alternative to cash shall contain an
affirmative statement by the assignor that the monies assigned are not derived from any
escrow deposit. In addition to such other terms and conditions as the superintendent
prescribes by rule, the principal amount of the deposit shall be released only on written
authorization of the superintendent or on the order of a court of competent jurisdiction,
but in any event the principal amount of the deposit shall not be released before the
expiration of three years from the date of substitution of a bond for a cash alternative,
the surrender of the license pursuant to section 6-838 or the revocation or expiration of
the license, whichever occurs first.

G. No suit may be commenced on a bond or cash or alternative to cash after the
expiration of three years following the act or acts on which the suit is based, except
that time for purposes of claims for fraud shall be measured as provided in section
12-543, paragraph 3. If an injured person commences an action for a judgement to collect
from the bond or cash alternative deposited in lieu of a bond, the injured person shall
notify the superintendent of the action in writing at the time of commencement of the
action and shall provide copies of all documents relating to the action to the
superintendent upon request.

H. The superintendent shall examine the application for a license and if he is
satisfied that the applicant should not be refused a license under section 6-817, he
shall issue the license.