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[Utah Code Table of Contents]
[TITLE 7. Table of Contents]
7-22-101 Definitions - Exemptions.
(1) As used in this chapter:
(a) "Escrow" means any agreement, express or implied, that provides for one or more parties to deliver or entrust any money, certificate of deposit, security, negotiable instrument, deed, or other property or asset to another person to be held, paid, or delivered in accordance with terms and conditions prescribed in the agreement.
(b) "Escrow agent" means any person that provides or offers to provide escrow services to the public.
(2) This chapter does not apply to:
(a) trust companies authorized to engage in the trust business in Utah in accordance with Title 7, Chapter 5, Trust Business;
(b) persons other than escrow agents regulated under this chapter that are exempted from the definition of trust business in Subsection 7-5-1 (1);
(c) depository institutions chartered by a state or the federal government that are engaged in business as a depository institution in Utah; and
(d) the State Board of Regents, the Utah Higher Education
Assistance Authority, or the State Treasurer.
1996
7-22-102 Authorization required.
Without prior authorization by the department, no person
may perform escrow services, offer to perform escrow services,
advertise that it performs escrow services, use the word
"escrow" in a business name, or do any other thing that might
reasonably cause anyone to believe that the person performs
escrow services.
1991
7-22-103 Registration - Fees - Qualifications.
(1) (a) Each escrow agent shall register with the department annually on or before July 15 of each year and pay a registration fee of $100.
(b) Registration of an escrow agent in accordance with this section includes all directors, officers, employees, and representatives of the escrow agent while acting in the course of its business.
(2) Each escrow agent shall provide a financial statement
and any other information requested by the department when
submitting each annual application for registration.
1996
7-22-104 Net worth requirements.
An escrow agent shall at all times maintain a positive
net worth no less than the greater of $50,000 or 10% of the
agent's average daily escrow liabilities during the preceding
12 months, or during all preceding operations if less than
12 months. For purposes of this section, net worth shall
be calculated in accordance with generally accepted accounting
principles.
1991
7-22-105 Bond required.
(1) Before furnishing any escrow services, each escrow agent shall file with the commissioner a surety bond in accordance with the following schedule: Monthly Average Minimum Escrow Liability Surety Bond Up to $10,000 $10,000 $10,001 to 20,000 $20,000 $20,001 to 30,000 $30,000 $30,001 to 40,000 $40,000 Above $40,000 $50,000
(2) The surety bond shall name as beneficiaries:
(a) this state for payment of any costs incurred and charges made in connection with any escrow agent's insolvency or default, including costs and charges relating to an examination and receivership of any escrow agent; and
(b) when all claims and charges of the state have been paid in full, any person who has a claim against the surety on the bond based on any default or violation of any duty or obligation of the escrow agent.
(3) The total aggregate liability on the bond from all claims including legal fees and other costs incurred in connection with the bond may not exceed the amount of the bond.
(4) An applicant for registration as an escrow agent may,
in lieu of and subject to the same surety conditions described
in Subsection (2), deposit assets with or provide a letter
of credit to the commissioner in the amount of the minimum
surety bond required in Subsection (1).
1996
7-22-106 Accounts to be maintained - Records open to inspection - Retention of records.
(1) Each escrow agent shall maintain in its main office sufficient books, accounts, and records for the department to determine at any time the escrow agent's financial condition, what duties and responsibilities the escrow agent has undertaken to perform and whether it is properly performing all such duties, and any other information considered necessary to determine whether the escrow agent is operating in a safe, competent, and lawful manner. The books, accounts, and records shall be maintained in accordance with generally accepted accounting principles and good business practice.
(2) For each individual escrow account, the escrow agent shall maintain the escrow agreement and all amendments, all instructions affecting the agreement, all related correspondence, and an individual ledger reflecting all activity pertinent to that account.
(3) Each escrow agent shall continuously maintain the following general accounts:
(a) a general ledger reflecting assets, liabilities, income, expense, and equity accounts;
(b) an escrow liability control ledger for all escrow accounts;
(c) a cash receipts and disbursements journal; and
(d) copies of all receipts and disbursements used as a medium of posting to individual escrow accounts.
(4) The records referred to in this section shall be reconciled at least monthly.
(5) All records pertaining to individual escrow accounts
in Subsection (2) shall be maintained by the escrow agent
for six years following the close of each account. All records
relating to general accounts required in Subsection (3) shall
be maintained for six years after the end of the fiscal year
to which they relate.
1991
7-22-107 Examinations.
The department may examine an escrow agent at any time.
The scope and frequency of examinations shall be determined
solely in the discretion of the department. In addition to
annual registration fees, each escrow agent shall pay per
diem assessments incident to an examination in accordance
with Section
7-1-401
.
1991
7-22-108 Segregation of accounts - Duties specified by agreement - Duties generally.
(1) Each escrow agent shall place all funds received in escrow into separate federally insured depository accounts specifically denominated as trust accounts and shall allow no other funds to be placed into a trust account for any purpose. Funds may be paid from trust accounts only in accordance with the terms and conditions of the escrow agreement. An agent may maintain a general trust account and individual accounts for specific escrows in the agent's discretion, subject to any specific terms and conditions of an escrow agreement. Earnings on funds held in an escrow trust account may be periodically dispersed to the escrow agent if the escrow contract specifically provides for such disbursements. Otherwise, earnings on funds held in escrow may be paid out of the escrow account to any other party in accordance with the provisions of the escrow agreement if the agreement does not otherwise provide for payment of the earnings or any portion of the earnings on the escrow funds.
(2) All other assets or property received by an escrow
agent in accordance with an escrow agreement shall be maintained
in a manner which will reasonably preserve and protect the
property from loss, theft, or damage, and which will otherwise
comply with all duties and responsibilities of a fiduciary
or bailee generally.
1991
7-22-109 Priority of claims in case of insolvency.
If the commissioner takes possession of the business and
property of the escrow agent in accordance with Title 7,
Chapter 2, Possession of Depository Institution by Commissioner,
or if the escrow agent files or is involuntarily placed into
bankruptcy, or if a receiver, conservator, or liquidator
is appointed to administer the affairs of the escrow agent,
the claims of persons for losses relating to funds or property
held in escrow shall have the same priority as claims of
depositors in Section
7-2-15
.
1991
