Texas Non-Resident Escrow Officer Employee Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Texas Non-Resident Escrow Officer Employee bond (if you are looking for the Texas Resident Escrow Officer Employee bond, click here).
At a Glance:
- Lowest Cost: $50 per year or $5 a month
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs It: All title insurance agents operating in Texas that employ non-resident escrow officers
- Purpose: To protect the public from financial harm if the escrow officer employee commits fraud or engages in unfair business practices
- Who Regulates Non-Resident Escrow Officer Employers in Texas: The Texas Department of Insurance
Background
Texas Insurance Code 2652.001 requires all non-resident escrow officers operating in the state to obtain a license from the Department of Insurance. The Texas Legislature enacted the licensing requirement to ensure that escrow officers do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, title insurance agents operating in Texas that employ non-resident escrow officers must purchase and maintain a surety bond to be eligible for operation.
What Is the Purpose of the Texas Non-Resident Escrow Officer Employee Bond?
If a title insurance agent plans on hiring an escrow officer, Texas Insurance Code 2652.101 requires the agent to purchase a surety bond at their own expense to cover the employment of such escrow officers. The bond ensures that restitution is available to any damaged party should the escrow officer under the employment of a title insurance agent fail to abide by the regulations outlined in the Texas Insurance Code Title 11, Chapter 2652. Specifically, the bond protects claimants if the escrow officer commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the escrow officer violates the terms of their license while under the employment of a title insurance agent.
How Can an Insurance Agent Obtain a Texas Non-Resident Escrow Officer Employee Bond?
BondExchange makes obtaining a Texas Non-Resident Escrow Officer Employee bond easy. Simply log in to your account and use our keyword search to find the “escrow officer” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How Is the Bond Amount Determined?
According to Texas Insurance Code 2652.103, the amount of the Non-Resident Escrow Officer Employee bond is based on the residency of the potential escrow officer employee. If the escrow officer is a non-resident, the bond limit is to be equal to $10,000 per employee. The maximum amount of the bond is set at $50,000 per the Department of Insurance.
Is a Credit Check Required for the Texas Non-Resident Escrow Officer Employee Bond?
Surety companies will run a credit check on the title insurance agent to determine eligibility and pricing for the Texas Non-Resident Escrow Officer Employee bond. Title insurance agents with excellent credit and work experience can expect to receive the best rates. Title insurance agents with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Texas Non-Resident Escrow Officer Employee Bond Cost?
The Texas Non-Resident Escrow Officer Employee bond can cost between 0.5% to 5% of the bond amount per year. Monthly subscription options are also available. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $10,000 requirement.
$10,000 Texas Non-Resident Escrow Officer Employee Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 649 – 720+ | $50 | $5 |
| 629 – 648 | $75 | $8 |
| 600 – 628 | $125 | $13 |
| 580 – 599 | $150 | $15 |
| 550 – 579 | $200 | $20 |
| 525 – 549 | $250 | $25 |
| 500 – 524 | $300 | $30 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Texas Define “Escrow Officer”?
To paraphrase Texas Insurance Code 2652.151-2652.153, escrow officers perform various tasks on behalf of a title insurance agent or agency such as preparing and delivering title insurance forms.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Escrow Officers Become Licensed in Texas?
Escrow officers in Texas must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department of Insurance’s Escrow Officer webpage for details on the process.
License Period – Per the Texas Department of Insurance, escrow officer licenses expire on June 1st following the initial license issuance date.
Step 1 – Background Check
Escrow officer applicants must get a fingerprint background check from IdentoGO. Once completed, a copy of the results and a receipt must be sent to the Texas Department of Insurance.
Step 2 – License Application
Via Sircon, applicants are to complete and submit an application under the “New Insurance License” prompt. Further details on what requirements and documents are needed can be found on the Title Licensing Forms webpage. An application fee of $35 is also mandated.
Step 3 – Employment Surety Bond
If an escrow officer is to be employed by a title insurance agent or agency, a surety bond must be purchased and maintained by the employer for the entirety of the escrow officer’s employment in the State of Texas.
How Do Escrow Officers in Texas Renew Their Licenses?
Upon the annual expiration date (June 1st), the renewal of an escrow officer license can be completed online through the Sircon website. A renewal application fee of $35 is required.
What Are the Insurance Requirements for Escrow Officers in Texas?
Texas does not require escrow officers to purchase any form of liability insurance as a prerequisite to obtaining a license. In addition, title insurance agents are not required to purchase any form of liability insurance in order to employ an escrow officer. To employ an escrow officer, title insurance agents must simply purchase and maintain a surety bond.
How Do Title Insurance Agents File Their Bonds in Texas?
Title insurance agents should submit their completed bond forms, including the power of Escrow Officer Appointment Form to the Texas Department of Insurance (see the mailing address listed below).
Department of Insurance
Agent and Adjuster Licensing
PO Box 12030
Austin, TX 78711
The surety bond requires signatures from the surety company, as well as the title insurance agent. The surety company should include the following information on the bond form:
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Texas Escrow Officers Do to Avoid a Claim Against Their Surety Bond?
The easiest way to avoid a claim as an escrow officer is to comply with all applicable license regulations. Common actions that can cause an official bond claim are listed below:
- Negligence
- Default
- Misrepresentation
- Fraud
What Other Insurance Products Can Agents Offer Non-Resident Escrow Officer Employers in Texas?
Most reputable title insurance agents will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Title Insurance Agent Customers in Texas?
Texas conveniently provides a public database to search for active title insurance agents in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.