BILL NUMBER: SB 1363	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Runner

                        FEBRUARY 19, 2010

   An act to amend Section 17405 of, and to add Section 17405.5 to,
the Financial Code, relating to escrow agents.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1363, as introduced, Runner. Escrow agents.
   Existing law, the Escrow Law, provides for the licensure and
regulation of escrow agents by the Commissioner of Corporations.
Under that law, the commissioner is authorized to conduct an
indoctrination or preliminary examination, or both, of any new
licensee within one year of the issuance of the license, and an
inspection and examination within 2 years of the issuance of the
license.
   This bill would require the commissioner to conduct these
examinations with respect to new licensees and would also apply these
provisions to a change of ownership of a licensee. The bill would
also require a licensee, or the licensee's managers and shareholders,
to complete a course in escrow management designated by the
commissioner, within 12 months following the issuance of a new
license or a change of ownership.
   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 17405 of the Financial Code is amended to read:

   17405.  (a) The business, accounts and records of every person
performing as an escrow agent, whether required to be licensed under
this division or not, are subject to inspection and examination by
the commissioner at any time without prior notice. The provisions of
this section shall not apply to persons specified in Section 17006.
   (b) Any person subject to this division shall, upon request,
exhibit and allow inspection and copying of any books and records by
the commissioner or his or her authorized representative.
   (c) (1) The commissioner shall conduct an examination of each
licensed escrow agent as described in subdivision (a) as often as the
commissioner deems necessary and appropriate, but not less than once
every 48 months.
   (2) The examination shall be conducted for the 12-month period
immediately preceding the date that the examination is commenced
unless the commissioner finds, based on information uncovered in the
examination or in the most recent independent audit report, that the
examination should be extended beyond the 12-month period.
   (3) In determining how often an examination shall be conducted,
the commissioner may consider each licensed escrow agent's compliance
with the requirements set forth in this division and other factors
the commissioner may by rule or order designate.
   (4) This subdivision shall apply only to examinations commenced
after the effective date established by the rule or order of the
commissioner for the factors described in paragraph (3).
   (d) Notwithstanding subdivision (c), the commissioner  may
  shall  conduct an indoctrination or preliminary
examination, or both, under this section of any new licensee  or
of a licensee that has a change in ownership  within one year of
the issuance of the license  or of the change of ownership 
under this division, and an examination described in subdivision (a)
within two years of the issuance of the license  or of the
change of ownership  under this division.
  SEC. 2.  Section 17405.5 is added to the Financial Code, to read:
   17405.5.  A licensee, or the licensee's managers and shareholders,
shall, within 12 months following the issuance of a new license or a
change of ownership, complete a course in escrow management
designated by the commissioner.