CHAPTER 2.5. Escrow Agents’ Fidelity Corporation [17300. - 17350.]

Heading of Chapter 2.5 amended by Stats. 1988, Ch. 1458, Sec. 1.

§§ 17300–17350 · 47 sections

1. ARTICLE 1. Definitions §§ 17300–17305 · 6 sections

   • § 17300 “Fidelity Corporation” means the Escrow Agents’ Fidelity Corporation.
   • § 17301 “Member” means any person licensed under this division who is required by Section 17312 to be a member of Fidelity Corporation.
   • § 17302 “Trust obligation” means: (a) All money and property deposited with a member within the State of California in an escrow or joint control transaction. (b) All…
   • § 17303 “Commissioner” means the Commissioner of Financial Protection and Innovation.
   • § 17304 “Loss,” within the meaning of this chapter, means the loss of trust obligations held by a member within the State of California as a result of the fraudulent…
   • § 17305 “Monthly average escrow liability,” as used in this chapter, means the average escrow liability for the 12-month period as reported in the most recent report…
2. ARTICLE 2. Purpose: Scope of Guarantee §§ 17310–17315 · 10 sections

   • § 17310 (a) It shall be the purpose of Fidelity Corporation to indemnify a member within the State of California against loss, subject to the limitations set forth in…
   • § 17311 (a) Persons licensed pursuant to this division shall maintain a corporation under the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section…
   • § 17312 (a) Each person licensed pursuant to this division who is engaged in the business of receiving escrows specified in subdivision (c) and whose escrow business…
   • § 17313 The commissioner shall review and approve the articles of incorporation and bylaws of Fidelity Corporation before they are filed with the Secretary of State.
   • § 17313.1 The fiscal year of Fidelity Corporation shall commence on July 1 of each year.
   • § 17314 (a) Fidelity Corporation shall pay a member for loss of trust obligations subject to the limitations set forth in this chapter. Fidelity Corporation shall pay…
   • § 17314.1 (a) Notwithstanding any other provision of this article, Fidelity Corporation shall not be obligated to pay any claim made by a member unless (1) the claim…
   • § 17314.2 Claims filed prior to the effective date of this chapter shall be governed by the provisions in effect when the loss occurred.
   • § 17314.3 (a) A deductible shall apply to each loss suffered by a member in the amount of five thousand dollars ($5,000), plus 5 percent of the amount by which the loss…
   • § 17315 The commissioner may establish rules which are reasonable and necessary to carry out the provisions of this chapter.
3. ARTICLE 3. Membership Fee and Assessments §§ 17320–17324 · 7 sections

   • § 17320 Fidelity Corporation shall establish and maintain the following funds for payment of claims and for payment of costs of administration: the membership fund,…
   • § 17321 Fidelity Corporation shall bill and collect from each member an annual premium that in the aggregate shall consist of assessments for the operations fund and…
   • § 17321.1 Fidelity Corporation shall levy a special assessment against its members whenever: (a) Deemed necessary by the board of directors in the event of any…
   • § 17321.2 Fidelity Corporation shall be entitled to collect late fees as specified in Fidelity Corporation’s bylaws for any late payment of assessments under Section…
   • § 17322 Fidelity Corporation shall report to the commissioner each levy of assessment within 10 business days after the levy.
   • § 17323 (a) In the event any member fails to pay an assessment when due, Fidelity Corporation shall by written demand addressed to the member request the payment of…
   • § 17324 Any reduction in the membership fund caused by payment of an extraordinary expense pursuant to subdivision (a) of Section 17320 or payment of claims pursuant…
4. ARTICLE 4. General Provisions §§ 17330–17350 · 24 sections

   • § 17330 Any member or successor in interest who suffers a loss may file a claim with Fidelity Corporation for the amount of the loss.
   • § 17331 (a) An applicant applying for licensure as an escrow agent under this division is required to apply for a Fidelity Corporation Certificate, prepared and issued…
   • § 17331.1 (a) Any person not previously issued a certificate must, upon employment with an escrow agent within this state, apply to Fidelity Corporation for a…
   • § 17331.2 (a) Fidelity Corporation shall deny the application for a certificate or revoke the certificate of any person, upon any of the following grounds: (1) The…
   • § 17331.3 (a) Notice to the person, and to the member with whom the person is employed, of the decision to deny an application for or to revoke or suspend a Fidelity…
   • § 17332 When either Fidelity Corporation or the insurer providing the fidelity bond or insurance policy, if any, under Section 17310, or both, pay an obligation on…
   • § 17333 The commissioner may forthwith upon written notice and order take possession of the property and business of Fidelity Corporation and retain possession until…
   • § 17334 Whenever the commissioner has taken possession of the property and business of Fidelity Corporation, Fidelity Corporation within 10 business days after the…
   • § 17335 An appeal may be taken from the judgment of the court by the commissioner or by Fidelity Corporation in the manner provided by law for appeals from the…
   • § 17336 (a) Fidelity Corporation shall have independent authority to investigate claims filed by members pursuant to Section 17330. (b) Fidelity Corporation, upon…
   • § 17337 Fidelity Corporation may invest its funds only as provided by rules of the commissioner adopted with a view to preserving reasonable liquidity. Upon request of…
   • § 17339 Prior to incurring any extraordinary or nonrecurring expense, Fidelity Corporation shall first obtain the written consent of the commissioner.
   • § 17340 In the event the board of directors of Fidelity Corporation deem it necessary and prudent to raise additional moneys for payment of claims or expenses of…
   • § 17341 The commissioner shall give prompt notice to Fidelity Corporation when the commissioner takes possession of the property and business of a member and shall…
   • § 17342 Memberships issued by Fidelity Corporation shall be nontransferable and shall be exempt from the provisions of the Corporate Securities Law of 1968.
   • § 17343 No provision of the Insurance Code shall apply to Fidelity Corporation.
   • § 17344 The operation of Fidelity Corporation shall at all times be subject to the regulation of the commissioner and the commissioner’s duly designated…
   • § 17345 Any member aggrieved by any action or decision of Fidelity Corporation may appeal to the commissioner within 30 days from the action or decision, except that…
   • § 17345.1 (a) A member or successor in interest aggrieved by any action or decision of Fidelity Corporation may file a written request for a hearing with the…
   • § 17346 (a) Fidelity Corporation and its members shall not advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed,…
   • § 17347 (a) The Secretary of State shall not file articles for the incorporation of Fidelity Corporation or an amendment to the articles unless the commissioner has…
   • § 17348 In order to permit Fidelity Corporation to fulfill its obligation under this chapter, the commissioner shall furnish a list of all persons licensed under this…
   • § 17349 If Fidelity Corporation is dissolved, subject to the approval of the commissioner, the net assets after settling all liabilities shall be distributed to the…
   • § 17350 All costs and expenses incurred by the commissioner in the administration of this chapter shall be paid to the commissioner by Fidelity Corporation. The…