Amended in Senate July 6, 2015

Amended in Senate June 15, 2015

Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 704

Introduced by Assembly Member Cooley

February 25, 2015

An act to amend, repeal, and add Section 12389 of, and to add Section 12340.13 to, the Insurance Code, relating to escrow.

LEGISLATIVE COUNSEL’S DIGEST

AB 704, as amended, Cooley. Escrow services: authorization to transact business.

Existing law authorizes an underwritten title company to engage in the escrow business and to act as an escrow agent if the company satisfies specified requirements, including maintenance of specified records, and the deposit of a specified sum of money with the commissioner. Existing law specifies the conditions under which the commissioner may release or return those deposits to the company.

This bill would expand the requirements for a company to be authorized to conduct escrow services, to engage in the escrow business, and to act as an escrow agent. The bill would authorize a company that is a stock corporation to conduct escrow services through a business location, as defined, if the company receives approval of its name from the commissioner, maintains a minimum net worth, obtains a license to transact its business from the commissioner, and furnishes audits to the commissioner, as specified. The bill would require a company, on and after July 1, 2016, as a condition of engaging in the escrow business or acting as an escrow agent, to maintain a bond begin delete of $50,000. end delete begin insert or deposit in a specified amount. end insert The bill would authorize a company to, with the approval of the commissioner, obtain an irrevocable letter of credit in lieu of that bond. The bill would specify conditions for the issuance of that bond or letters of credit or use of that cash deposit. The bill would require the commissioner to promptly release all escrow-related deposits made with the commissioner before July 1, 2016, under specified conditions, including the deposit of the bond, letter of credit, or cash deposit described above.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 12340.13 is added to the Insurance Code,
to read:

12340.13.  

“Business location” means a facility or other place
of business in this state where an underwritten title company or
controlled escrow company engages in the business of conducting
escrow services.

SEC. 2.  

Section 12389 of the Insurance Code is amended to
read:

12389.  

(a) An underwritten title company as defined in Section
12340.5, which shall be a stock corporation, may, subject to
subdivision (b), (1) engage in the business of preparing title
searches, title reports, title examinations, or certificates or abstracts
of title, upon the basis of which a title insurer writes title policies,
and (2) conduct escrow services at business locations, as defined
in Section 12340.13, in counties in which the underwritten title
company is licensed to conduct escrow services regardless of the
location of the real or personal property involved in the transaction.

(b) (1) Only domestic corporations may be licensed under this
section and no underwritten title company, as defined in Section
12340.5, shall become licensed under this section, or change the
name under which it is licensed or operates, unless it has first
complied with Section 881.

(2) (A) Depending upon the county or counties in which the
company is licensed to transact business, it shall maintain required
minimum net worth as follows:

 

Aggregate number of documents recorded and documents filed in the offices of the county recorders in the preceding calendar year in all counties where the company is licensed to transact business.
Number of documents		Amount of required minimum net worth
Less than 50,000		$ 75,000
50,000 to 100,000		120,000
100,000 to 500,000		200,000
500,000 to 1,000,000		300,000
1,000,000 or more		400,000

 

(B) “Net worth” is defined as the excess of assets over all
liabilities and required reserves. It may carry as an asset the actual
cost of its title plant, provided the value ascribed to that asset shall
not exceed the aggregate value of all other assets.

(C) If a title plant of an underwritten title company is not being
currently maintained, the asset value of the plant shall not exceed
its asset value as determined in the preceding paragraph as of the
date to which that plant is currently maintained, less one-tenth
thereof for each succeeding year or part of the succeeding year
that the plant is not being currently maintained. For the purposes
of this section, a title plant shall be deemed currently maintained
so long as it is used in the normal conduct of the business of title
insurance, and (i) the owner of the plant continues regularly to
obtain and index title record data to the plant or to a continuation
thereof in a format other than that previously used, including, but
not limited to, computerization of the data, or (ii) the owner of the
plant is a participant, in an arrangement for joint use of a title plant
system regularly maintained in any format, provided the owner is
contractually entitled to receive a copy of the title record data
contained in the jointly used title plant system during the period
of the owner’s participation therein, either periodically or upon
termination of that participation, at a cost not to exceed the actual
cost of duplication of the title record data.

(D) An underwritten title company at all times shall maintain
current assets of at least ten thousand dollars ($10,000) in excess
of its current liabilities, as current assets and liabilities may be
defined pursuant to regulations made by the commissioner. In
making the regulations, the commissioner shall be guided by
generally accepted accounting principles followed by certified
public accountants in this state.

(3) (A) An underwritten title company shall obtain from the
commissioner a license to transact its business. The license shall
not be granted until the applicant conforms to the requirements of
this section and all other provisions of this code specifically
applicable to the applicant. After issuance the holder shall continue
to comply with the requirements as to its business set forth in this
code, in the applicable rules and regulations of the commissioner
and in the laws of this state.

(B) An underwritten title company that possesses, or is required
to possess, a license pursuant to this section is subject as if an
insurer to the provisions of Article 8 (commencing with Section
820) of Chapter 1 of Part 2 of Division 1 of this code and is deemed
to be subject to authorization by the Insurance Commissioner
within the meaning of subdivision (e) of Section 25100 of the
Corporations Code.

(C) The license may be obtained by filing an application on a
form prescribed by the commissioner accompanied by a filing fee
of three hundred fifty-four dollars ($354). The license when issued
shall be for an indefinite term and shall expire with the termination
of the existence of the holder, subject to the annual renewal fee
imposed under Sections 12415 and 12416.

(D) An underwritten title company seeking to extend its license
to an additional county shall pay a two-hundred-seven-dollar ($207)
fee for each additional county, and shall furnish to the
commissioner evidence, at least sufficient to meet the minimum
net worth requirements of paragraph (2), of its financial ability to
expand its business operation to include the additional county or
counties.

(4) (A) An underwritten title company shall furnish an audit to
the commissioner on the forms provided by the commissioner
annually, either on a calendar year basis on or before March 31
or, if approved in writing by the commissioner in respect to any
individual company, on a fiscal year basis on or before 90 days
after the end of the fiscal year. The time for furnishing any audit
required by this paragraph may be extended, for good cause shown,
on written approval of the commissioner for a period, not to exceed
60 days. Failure to submit an audit on time, or within the extended
time that the commissioner may grant, shall be grounds for an
order by the commissioner to accept no new business pursuant to
subdivision (d). The audits shall be private, except that a synopsis
of the balance sheet on a form prescribed by the commissioner
may be made available to the public.

(B) The audits shall be made in accordance with generally
accepted auditing standards by an independent certified public
accountant or independent licensed public accountant whose
certification or license is in good standing at the time of the
preparation. The fee for filing the audit shall be three hundred
thirteen dollars ($313).

(C) The commissioner may refuse to accept an audit or order a
new audit for any of the following reasons:

(i) An adverse result in any proceeding before the California
Board of Accountancy affecting the auditor’s license.

(ii) The auditor has an affiliation with the underwritten title
company, or any of its officers or directors, that would prevent his
or her reports on the company from being reasonably objective.

(iii) The auditor has suffered conviction of a misdemeanor or
felony based on his or her activities as an accountant.

(iv) A judgment adverse to the auditor in any civil action finding
him or her guilty of fraud, deceit, or misrepresentation in the
practice of his or her profession.

(D) A company that fails to file any audit or other report on or
before the date it is due shall pay to the commissioner a penalty
fee of one hundred eighteen dollars ($118) and on failure to pay
that or another fee or file the audit required by this section shall
forfeit the privilege of accepting new business until the delinquency
is corrected.

(c) An underwritten title company may engage in the escrow
business and act as escrow agent provided that:

(1) The company maintains a record of all receipts and
disbursements of escrow funds.

(2) (A) The company deposits seven thousand five hundred
dollars ($7,500) for each county in which it transacts business in
some form permitted by Section 12351 with the commissioner
who shall immediately make a special deposit of that amount in
the State Treasury and that deposit shall be subject to Sections
12353, 12356, 12357, and 12358 and, as long as there are no claims
against the deposit, all interest and dividends thereon shall be paid
to the depositor. The deposit shall be for the security and protection
of persons having lawful claims against the depositor growing out
of escrow transactions with it. The deposit shall be maintained
until four years after all escrows handled by the depositor have
been closed.

(B) The commissioner may release the deposits prior to the
passage of the four-year period upon presentation of evidence
satisfactory to the commissioner of either a statutory merger of
the depositor into a licensee or certificate holder subject to the
jurisdiction of the commissioner, or a valid assumption agreement
under which all liability of the depositor stemming from escrow
transactions handled by it is assumed by a licensee or certificate
holder subject to the jurisdiction of the commissioner.

(C) With the foregoing exceptions, the deposit shall be returned
to the depositor or lawful successor in interest following the
four-year period, upon presentation of evidence satisfactory to the
commissioner that there are no claims against the deposit stemming
from escrow transactions handled by the depositor. If the
commissioner has evidence of one or more claims against the
depositor, and the depositor is not in conservatorship or liquidation,
the commissioner may interplead the deposit by special
endorsement to a court of competent jurisdiction for distribution
on the basis that claims against the depositor stemming from
escrow transactions handled by it have priority in the distribution
over other claims against the depositor.

(d) The commissioner shall, whenever it appears necessary,
examine the business and affairs of a company licensed under this
section. The examination shall be at the expense of the company.

(e) (1) If the commissioner determines, after notice and hearing,
that a company licensed under this section has willfully failed to
comply with a provision of this section, the commissioner shall
make his or her order prohibiting the company from conducting
its business for a period of not more than one year.

(2) A company violating the commissioner’s order is subject to
seizure under Article 14 (commencing with Section 1010) of
Chapter 1 of Part 2 of Division 1, is guilty of a misdemeanor, and
may have the license revoked by the commissioner. Any person
aiding and abetting any company in a violation of the
commissioner’s order is guilty of a misdemeanor.

(f) The purpose of this section is to maintain the solvency of
the companies subject to this section and to protect the public by
preventing fraud and requiring fair dealing. In order to carry out
these purposes, the commissioner may make reasonable rules and
regulations to govern the conduct of its business of companies
subject to this section. The rules and regulations shall be adopted,
amended, or repealed in accordance with the procedure provided
in Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code.

(g) The name under which each underwritten title company is
licensed shall at all times be an approved name. The fee for filing
an application for a change of name shall be one hundred eighteen
dollars ($118). Each begin delete such end delete company shall be subject to the
provisions of Article 14 (commencing with Section 1010) and
Article 14.5 (commencing with Section 1065.1) of Chapter 1 of
Part 2 of Division 1.

(h) This section is repealed as of July 1, 2016.

SEC. 3.  

Section 12389 is added to the Insurance Code, to read:

12389.  

(a) On and after July 1, 2016, an underwritten title
company as defined in Section 12340.5 that is a stock corporation
may, subject to subdivision (b), (1) engage in the business of
preparing title searches, title reports, title examinations, or
certificates or abstracts of title, upon the basis of which a title
insurer writes title policies, and (2) conduct escrow services
through business locations, as defined in Section 12340.13, in
counties in which the underwritten title company is licensed to
conduct escrow services regardless of the location of the real or
personal property involved in the transaction.

(b) (1) Only a domestic corporation may be licensed under this
section and no underwritten title company, as defined in Section
12340.5, may become licensed under this section, or change the
name under which it is licensed or operates, unless it has first
complied with Section 881.

(2) (A) Depending upon the county or counties in which the
company is licensed to transact business, it shall maintain required
minimum net worth begin insert and a bond or cash deposit end insert as follows:

begin delete

 

Aggregate number of documents recorded and documents filed in the offices of the county recorders in the preceding calendar year in all counties where the company is licensed to transact business.
Number of documents		Amount of required minimum net worth
Less than 50,000		$ 75,000
50,000 to 100,000		120,000
100,000 to 500,000		200,000
500,000 to 1,000,000		300,000
1,000,000 or more		400,000

 

end delete

 

begin insert

begin insert Aggregate number of documents recorded and documents filed in the preceding calendar year in all counties where the company is licensed to transact business end insert	begin insert   end insert	begin insert   end insert	begin insert   end insert
begin insert   end insert	begin insert   end insert	begin insert   end insert	begin insert   end insert
begin insert Number of documents end insert	begin insert   end insert	begin insert Amount of required minimum net worth end insert	begin insert Amount of bond or cash deposit end insert
begin insert Less than 50,000    end insert		begin insert $ 75,000 end insert	begin insert $ 50,000 end insert
begin insert 50,000 to 100,000    end insert		begin insert 120,000 end insert	begin insert 50,000 end insert
begin insert 100,000 to 500,000    end insert		begin insert 200,000 end insert	begin insert 100,000 end insert
begin insert 500,000 to 1,000,000    end insert		begin insert 300,000 end insert	begin insert 100,000 end insert
begin insert 1,000,000 or more    end insert		begin insert 400,000 end insert	begin insert 100,000 end insert

end insert

 

(B) “Net worth” for the purposes of this section is defined as
the excess of assets over all liabilities and required reserves. The
company may carry as an asset the actual cost of its title plant,
provided the value ascribed to that asset shall not exceed the
aggregate value of all other assets.

(C) If a title plant of an underwritten title company is not
currently maintained, the asset value of the plant shall not exceed
its asset value as determined in the preceding paragraph as of the
date to which that plant is currently maintained, less one-tenth
thereof for each succeeding year or part of the succeeding year
that the plant is not being currently maintained. For the purposes
of this section, a title plant shall be deemed currently maintained
so long as it is used in the normal conduct of the business of title
insurance, and (i) the owner of the plant continues regularly to
obtain and index title record data to the plant or to a continuation
thereof in a format other than that previously used, including, but
not limited to, computerization of the data, or (ii) the owner of the
plant is a participant, in an arrangement for joint use of a title plant
system regularly maintained in any format, provided the owner is
contractually entitled to receive a copy of the title record data
contained in the jointly used title plant system during the period
of the owner’s participation therein, either periodically or upon
termination of that participation, at a cost not to exceed the actual
cost of duplication of the title record data.

(D) An underwritten title company shall at all times maintain
current assets of at least ten thousand dollars ($10,000) in excess
of its current liabilities, as current assets and liabilities may be
defined pursuant to regulations made by the commissioner. In
making the regulations, the commissioner shall be guided by
generally accepted accounting principles followed by certified
public accountants in this state.

(3) (A) An underwritten title company shall obtain from the
commissioner a license to transact its business. The license shall
not be granted until the applicant conforms to the requirements of
this section and all other provisions of this code specifically
applicable to the applicant. After issuance the holder of the license
shall continue to comply with the requirements as to its business
set forth in this code, in the applicable rules and regulations of the
commissioner, and in the laws of this state.

(B) An underwritten title company that possesses, or is required
to possess, a license pursuant to this section shall be subject as if
an insurer to the provisions of Article 8 (commencing with Section
820) of Chapter 1 of Part 2 of Division 1 of this code and is deemed
to be subject to authorization by the Insurance Commissioner
within the meaning of subdivision (e) of Section 25100 of the
Corporations Code.

(C) The license may be obtained by filing an application on a
form prescribed by the commissioner accompanied by a filing fee
of three hundred fifty-four dollars ($354). The license when issued
shall be for an indefinite term and shall expire with the termination
of the existence of the holder, subject to the annual renewal fee
imposed under Sections 12415 and 12416.

(D) An underwritten title company seeking to extend its license
to an additional county shall pay a two-hundred-seven-dollar ($207)
fee for each additional county, and shall furnish to the
commissioner evidence, at least sufficient to meet the minimum
net worth requirements of paragraph (2), of its financial ability to
expand its business operation to include the additional county or
counties.

(4) (A) An underwritten title company shall furnish an audit to
the commissioner on the forms provided by the commissioner
annually, either on a calendar year basis on or before March 31
or, if approved in writing by the commissioner in respect to any
individual company, on a fiscal year basis on or before 90 days
after the end of the fiscal year. The time for furnishing any audit
required by this paragraph may be extended, for good cause shown,
on written approval of the commissioner for a period, not to exceed
60 days. Failure to submit an audit on time, or within the extended
time that the commissioner may grant, is grounds for an order by
the commissioner to accept no new business pursuant to
subdivision (d). The audits shall be private, except that a synopsis
of the balance sheet on a form prescribed by the commissioner
may be made available to the public.

(B) The audits shall be made in accordance with generally
accepted auditing standards by an independent certified public
accountant or independent licensed public accountant whose
certification or license is in good standing at the time of the
preparation. The fee for filing the audit shall be three hundred
thirteen dollars ($313).

(C) The commissioner may refuse to accept an audit or order a
new audit for any of the following reasons:

(i) An adverse result in any proceeding before the California
Board of Accountancy affecting the auditor’s license.

(ii) The auditor has an affiliation with the underwritten title
company or any of its officers or directors that would prevent his
or her reports on the company from being reasonably objective.

(iii) The auditor has been convicted of a misdemeanor or felony
based on his or her activities as an accountant.

(iv) A judgment adverse to the auditor in any civil action finding
him or her guilty of fraud, deceit, or misrepresentation in the
practice of his or her profession.

(D) A company that fails to file an audit or other report on or
before the date it is due shall pay to the commissioner a penalty
fee of one hundred eighteen dollars ($118) and on failure to pay
that or another fee or file the audit required by this section shall
forfeit the privilege of accepting new business until the delinquency
is corrected.

(c) An underwritten title company may engage in the escrow
business and act as escrow agent, provided that:

(1) It maintains a record of all receipts and disbursements of
escrow funds.

begin delete

(2) (A) The company shall maintain a bond of fifty thousand
dollars ($50,000).

(B) An applicant or licensee may obtain an irrevocable letter of
credit approved by the commissioner in lieu, and in the amount,
of the bond. The bond or letter of credit, as applicable, shall run
to the state for the use of the state, and for any person who has
cause against the obligor of the bond or the applicant of a letter of
credit, under the provisions of this chapter.

end delete begin insert

(2) (A) It maintains a bond satisfactory to the commissioner in
the amount set forth in subparagraph (A) of paragraph (2) of
subdivision (b) of this section. The bond shall run to the state for
the use of the state, and for any person who has cause against the
obligor of the bond or under the provisions of this chapter.

end insert begin insert

(B) (i) In lieu of the bond described in subparagraph (A), the
company shall maintain a deposit in the amount set forth in
subparagraph (A) of paragraph (2) of subdivision (b) of this
section, and in a form permitted by Section 12351, with the
commissioner, who shall immediately make a special deposit in
that amount in the State Treasury. The deposit shall be subject to
Sections 12353, 12356, 12357, and 12358. As long as there are
no claims against the deposit, all interest and dividends thereon
shall be paid to the depositor. The deposit shall be security for the
same beneficiaries and purposes as the bond, as set forth in
subparagraph (A) and in paragraph (3) of this subdivision. The
deposit shall be maintained until four years after all escrows
handled by the depositor have been closed.

end insert begin insert

(ii) The commissioner may release the deposit prior to the
passage of the four-year period described in clause (i) upon
presentation of evidence satisfactory to the commissioner of either
a statutory merger of the depositor into a licensee subject to the
jurisdiction of the commissioner, or a valid assumption agreement
under which the liability of the depositor stemming from escrow
transactions handled by it is assumed by a licensee subject to the
jurisdiction of the commissioner.

end insert begin insert

(iii) With the foregoing exceptions, the deposit shall be returned
to the depositor or lawful successor in interest following the
four-year period described in clause (i) upon presentation of
evidence satisfactory to the commissioner that there are no claims
against the deposit arising out of escrow transactions handled by
the depositor. If claims against the deposit are presented to the
commissioner, the commissioner may pay a valid claim or claims
until the deposit amount is exhausted. If the commissioner has
evidence of one or more claims against the depositor, and the
depositor is in conservatorship, bankruptcy, or liquidation
proceedings, the commissioner may release the deposit to the
conservator, trustee, or liquidator. If the depositor is not in
conservatorship, bankruptcy or liquidation, the commissioner may
interplead the deposit by special endorsement to a court of
competent jurisdiction for distribution to claimants on the deposit.

end insert

(3) (A) The bond provided by a surety insurer naming the
underwritten title company as principal obligor or the letter of
credit of an issuing bank shall be subject to the following
conditions:

(i) The licensee shall faithfully conform to and abide by the
provisions of this chapter and all of the rules made by the
commissioner under this chapter concerning the conduct of escrow
services.

(ii) The licensee will honestly and faithfully apply all funds
received, and will faithfully and honestly perform all obligations
and undertakings under this chapter, concerning the conduct of
escrow services.

(B) In determining the liability of the principal and the sureties
under the bond, any money recovered to restore any deficiency in
the trust shall not be considered as an asset of the liquidation
subject to the assessment for the cost of the liquidation.

(C) The surety under the bond, or the issuing bank of a letter of
credit, may pay the full amount of its liability thereunder to the
commissioner as conservator, liquidator, receiver, or anyone
appointed by the commissioner as a conservator, liquidator, or
receiver in lieu of payment to the state or persons having a cause
of action against the principal of a bond or applicant under a letter
of credit, and upon such payment the surety on the bond, or the
issuing bank under a letter of credit shall be completely released,
discharged, and exonerated from further liability under the bond
or letter of credit, as applicable. The conservator, liquidator, or
receiver may use the proceeds of the bond, or letter of credit, for
any purposes, including the funding of the costs of conservatorship,
receivership, or liquidation.

(D) If there is no reasonable or adequate admitted market for
surety bonds as required by this section, the commissioner may
act pursuant to Section 1763.1 or, begin delete under extraordinary
circumstances and end delete for good cause shown, begin insert may end insert permit a begin delete cash deposit end delete
begin insert letter of credit end insert in lieu thereof, and in the amount of the bond begin insert or
deposit end insert required by this section. In that case, the commissioner
may fashion the begin delete deposit end delete begin insert letter of credit end insert requirements as appropriate
to the circumstances and cause.

(4) On and after July 1, 2016, the commissioner shall promptly
release to the depositor, upon application, all escrow-related
deposits previously made pursuant to paragraph (2) of subdivision
(c) of former Section 12389 if any of the following occurs:

(A) The underwritten title company has provided to the
commissioner bond begin delete coverage end delete begin insert coverage, a deposit, end insert or an approved
irrevocable letter of credit as set forth in this subdivision.

(B) Upon presentation of evidence satisfactory to the
commissioner of either a statutory merger of the underwritten title
company depositor into a licensee or certificate holder subject to
the jurisdiction of the commissioner, or a valid assumption
agreement under which all liability of the depositor stemming from
escrow transactions handled by it is assumed by a licensee or
certificate holder subject to the jurisdiction of the commissioner.

(5) Otherwise the deposit shall be promptly returned to the
depositor, its duly appointed trustee in bankruptcy or lawful
successor in interest upon application for release following the
four-year period specified in paragraph (2) , as that paragraph read
on June 30, 2016, unless the commissioner has received claims
against the deposit stemming from escrow transactions handled
by the depositor. If the commissioner has received one or more
claims against the depositor, and the depositor is not in
conservatorship, bankruptcy, or liquidation, the commissioner may
interplead the deposit by special endorsement to a court of
competent jurisdiction for distribution on the basis that claims
against the depositor stemming from escrow transactions handled
by the depositor have priority in the distribution over other claims
against the depositor.

(d) The commissioner shall, whenever it appears necessary,
examine the business and affairs of a company licensed under this
section. The examination shall be at the expense of the company.

(e) (1) At any time that the commissioner determines, after
notice and hearing, that a company licensed under this section has
willfully failed to comply with a provision of this section, the
commissioner shall make his or her order prohibiting the company
from conducting its business for a period of not more than one
year.

(2) A company that violates the commissioner’s order is subject
to seizure under Article 14 (commencing with Section 1010) of
Chapter 1 of Part 2 of Division 1, is guilty of a misdemeanor, and
may have its license revoked by the commissioner. Any person
aiding and abetting any company in a violation of the
commissioner’s order is guilty of a misdemeanor.

(f) The purpose of this section is to maintain the solvency of
the companies subject to this section and to protect the public by
preventing fraud and requiring fair dealing. In order to carry out
these purposes, the commissioner may make reasonable rules and
regulations to govern the conduct of its business of companies
subject to this section. The rules and regulations shall be adopted,
amended, or repealed in accordance with the procedures provided
in Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code.

(g) The name under which each underwritten title company is
licensed shall at all times be an approved name. The fee for filing
an application for a change of name shall be one hundred eighteen
dollars ($118). Each company shall be subject to the provisions
of Article 14 (commencing with Section 1010) and Article 14.5
(commencing with Section 1065.1) of Chapter 1 of Part 2 of
Division 1.

(h) This section does not prohibit an underwritten title company
from engaging in escrow, settlement, or closing activities on
properties located outside this state if those activities do not violate
the laws of that other state or country.

(i) This section is operative on July 1, 2016.