BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 704 (Cooley) - Escrow services: authorization to transact
business
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|Version: July 6, 2015 |Policy Vote: INS. 8 - 0, B. & |
| | F.I. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 704 would modify the regulatory requirements on
underwritten title companies regulated by the Department of
Insurance.
Fiscal
Impact: Regulatory and licensing costs to the department of
Insurance of $192,000 (offset by $32,000 in fee revenues) in
2015-16, $107,000 (offset by $65,000) in 2016-17, and $80,000
(offset by $56,000) per year thereafter (Insurance Fund).
Background: Under current law, companies providing real estate escrow
services can be licensed by the Department of Insurance, the
Department of Business Oversight, or the Bureau of Real Estate.
Underwritten title companies are regulated by the Department of
Insurance. Underwritten title companies provide escrow services
as well as providing certain services in connection with the
AB 704 (Cooley) Page 1 of
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issuance of title insurance. Current law requires an
underwritten title company to be licensed in any county in which
it conducts business, to maintain a minimum net worth, and to
deposit $7,500 with the Insurance Commissioner for each county
in which it transacts business.
Proposed Law:
AB 704 would modify the regulatory requirements on
underwritten title companies regulated by the Department of
Insurance.
Specific provisions of the bill would:
Authorize an underwritten title company to conduct escrow
services at business locations in counties in which the
company is licensed, regardless of the location of the real
property involved in the transaction;
Delete the requirement that an underwritten title company
deposit $7,500 for each county in which it conducts business
with the Insurance Commissioner (effective July 1, 2016);
Require an underwritten title company maintain a bond of
$50,000 or $100,000 or similar financial instrument, depending
on the size of the company, with the Insurance Commissioner
(effective July 1, 2016);
Make related technical changes.
Related
Legislation: AB 1704 (Hagman, 2014) would have authorized the
Insurance Commissioner to license a an underwritten title
company to engage in escrow services in all California counties.
That bill was never heard in the Assembly Insurance Committee.
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