Nebraska Statutes 44-1994. Conditions for maintaining escrow and security deposit accounts
(1)(a) A title insurer may operate as an escrow, security, settlement, or closing agent subject to the requirements of subdivisions (b) through (e) of this subsection.
Terms Used In Nebraska Statutes 44-1994
- 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.
- Director: shall mean the Director of Insurance. See Nebraska Statutes 44-103
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fiduciary: A trustee, executor, or administrator.
- Insurer: shall include all companies, exchanges, societies, or associations whether organized on the stock, mutual, assessment, or fraternal plan of insurance and reciprocal insurance exchanges. See Nebraska Statutes 44-103
- National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: shall include bodies politic and corporate, societies, communities, the public generally, individuals, partnerships, limited liability companies, joint-stock companies, and associations. See Nebraska Statutes 49-801
- 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 different states of the United States shall be construed to extend to and include the District of Columbia and the several territories organized by Congress. See Nebraska Statutes 49-801
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- United States: shall include territories, outlying possessions, and the District of Columbia. See Nebraska Statutes 49-801
(b) All funds deposited with the title insurer in connection with an escrow, security deposit, settlement, or closing shall be submitted for collection to or deposited in a separate fiduciary trust account or accounts in a qualified financial institution no later than the close of the next business day in accordance with the following requirements:
(i) The funds shall be the property of the person or persons entitled to them under the provisions of the escrow, security deposit, settlement, or closing agreement and shall be segregated for each depository by escrow, security deposit, settlement, or closing in the records of the title insurer in a manner that permits the funds to be identified on an individual basis; and
(ii) The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted.
(c) Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying how and to whom such funds may be disbursed.
(d) Funds held in a security deposit account shall be disbursed only pursuant to a written agreement specifying:
(i) What actions the indemnitor shall take to satisfy his or her obligation under the agreement;
(ii) The duties of the title insurer with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and
(iii) Any other provisions the director may require.
(e)(i) Disbursements may be made out of an escrow, security deposit, settlement, or closing account only if deposits in amounts at least equal to the disbursement have first been made directly relating to the transaction disbursed against and if the deposits are in one of the following forms:
(A) Lawful money of the United States;
(B) Wired funds when unconditionally held by the title insurer;
(C) Cashier’s checks, certified checks, bank money orders, or teller’s checks issued by a federally insured financial institution and unconditionally held by the title insurer; and
(D) United States treasury checks, federal reserve bank checks, federal home loan bank checks, State of Nebraska warrants, and warrants of a city of the metropolitan or primary class.
(ii) For purposes of this subdivision, federally insured financial institution means an institution in which monetary deposits are insured by the Federal Deposit Insurance Corporation or National Credit Union Administration.
(2) Nothing in this section is intended to amend, alter, or supersede other sections of the Title Insurers Act or the laws of this state or the United States regarding an escrow holder’s duties and obligations.
(3) The director may prescribe a standard agreement for escrow, settlement, closing, or security deposit funds.