Kansas Statutes 40-1139. Same; financial responsibility requirements
(a) The title insurance agent who handles escrow, settlement or closing accounts shall file with the commissioner a surety bond or irrevocable letter of credit in a form acceptable to the commissioner, issued by an insurance company or financial institution authorized to conduct business in this state, securing the applicant’s or the title insurance agent’s faithful performance of all duties and obligations set out in Kan. Stat. Ann. §§ 40-1135 through 40-1141, and amendments thereto.
(b) The terms of the bond or irrevocable letter of credit shall be:
Terms Used In Kansas Statutes 40-1139
- agent: means an authorized person, other than a bona fide employee of the title insurer who, on behalf of the title insurer, performs the following acts, in conjunction with the issuance of a title insurance report or policy:
(1) Determines insurability and issues title insurance reports or policies, or both, based upon the performance or review of a search, or an abstract of title;
(2) collects or disburses premiums, escrow or security deposits or other funds;
(3) handles escrow, settlements or closings;
(4) solicits or negotiates title insurance business; or
(5) records closing documents. See Kansas Statutes 40-1136
- Commissioner: means the commissioner of insurance of the state of Kansas. See Kansas Statutes 40-1136
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Escrow: means written instruments, money or other items deposited by one party with a depository, escrow agent or escrow for delivery to another party upon the performance of a specified condition or the happening of a certain event. See Kansas Statutes 40-1136
- insurance company: as used in this article shall be construed to include any corporation having a capital stock as provided by section 40-1103, and organized for one or more of the purposes set out in section 40-1102. See Kansas Statutes 40-1101
- Person: means a natural person, partnership, association, cooperative, corporation, trust or other legal entity. See Kansas Statutes 40-1136
- Property: includes personal and real property. See Kansas Statutes 77-201
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Kansas Statutes 77-201
(1) The surety bond shall provide that such bond may not be terminated without 30 days prior written notice to the commissioner.
(2) An irrevocable letter of credit shall be issued by a bank which is insured by the federal deposit insurance corporation or its successor if such letter of credit is initially issued for a term of at least one year and by its terms is automatically renewed at each expiration date for at least an additional one-year term unless at least 30 days prior written notice of intention not to renew is given to the commissioner of insurance.
(c) The amount of the surety bond or irrevocable letter of credit for those agents servicing real estate transactions on property located in counties having a certain population shall be required as follows:
(1) $100,000 surety bond or irrevocable letter of credit in counties having a population of 40,001 and over;
(2) $50,000 surety bond or irrevocable letter of credit in counties having a population of 20,001 to 40,000; and
(3) $25,000 surety bond or irrevocable letter of credit in counties having a population of 20,000 or under.
(d) The surety bond or irrevocable letter of credit shall be for the benefit of any person suffering a loss if the title insurance agent converts or misappropriates money received or held in escrow, deposit or trust accounts while acting as a title insurance agent providing any escrow or settlement services.