In Texas, title insurance agents and direct operations must file two surety bonds with the Texas Department of Insurance in order to receive their license: the Escrow Officers Schedule Bond and the Title Insurance Agent/Direct Operation Bond. Both of these bonds are required as a comprehensive guarantee that your actions as a title insurance agent or direct operation (and any escrow officers under your employment) will not cause harm to the public.
The Escrow Officers Schedule Bond ensures that escrow agents will pay the Department for financial losses sustained by the title insurance agent or direct operation as a result of the escrow officer’s deceptive business practices. The Title Insurance Agent/Direct Operation Bond is used for protection against financial damages to the Department of Insurance and participants of a real estate property transaction that are caused by the title insurance agent’s illegal actions.
With Jet, you can purchase your bonds for as low as $100 for one year per bond. Of course, rates will vary based on the bond limit needed and a personal credit check. See the chart below for rates a preferred credit applicant will be approved for.
The Escrow Officer Bond and the Title Insurance Agent Bond are separate bonds and are offered separately as well. Please make sure that you are applying for both bonds.
Both of these bonds have a variable limit to allow for an appropriate amount of coverage. The Title Insurance Agent/Direct Operation Bond is based on the amount of gross premium that is written, while the Escrow Officers Bond has a limit that is based on the number of escrow officers under your employment.
Title Insurance Agent/Direct Operation Bond Limit: $10,000; or 10% of the total premium according to the last available statistical report (with a maximum of $100,000)
Escrow Officers Schedule Bond Limit: multiplied by the number of escrow officers employed (with a maximum of $50,000):
Applying for your license bonds is easy with Jet! We simplified our application process to only ask for the required information. That means adding in general business information, contact information, and a social security number, which only takes a couple of minutes to complete. Please be mindful of which bond you are applying for and that you are applying for both.
After you are done with the application, you will find your approved quote that is ready for purchase for bond limits that are under $50,000; if the limit is over $50,000, the application will be submitted for review by a Jet team member. Once the review is complete, you will get an email with your approved quote that can be purchased right away. When checking out, you can choose to have the bond mailed to you or leave it to Jet for filing. The original bond must be mailed to the address below:
Texas Department of Insurance
PO Box 149104
Austin, TX 78714
To renew the bond, Jet will send you a notice via mail and email. Either option only takes a minute to fill out and submit so you are all set for your renewal.
If you no longer need the Escrow Officer Bond, send an email to [email protected] to request cancellation. There is a 30-day cancellation period before the Department of Insurance fully cancels the bond, which still counts as an active period on the bond. Once the cancellation is complete, Jet will take any time left in the term and calculate it into a refund.
A title insurance agent or direct operation is obligated to comply with Section 2651 of the Texas Insurance Code, while an escrow officer is obligated to comply with Section 2652. A title insurance agent is in the business of writing, signing, or delivering title insurance and may have escrow officers working for them. Escrow officers are responsible for:
Both the Escrow Officers Bond and the Title Insurance Agent/Direct Operation Bond are used to protect against any fraud, embezzlement, dishonesty, theft, deliberate misapplication, or forgery during the performance of duties, but each bond holds a different party accountable. The Escrow Agent Bond protects the direct operation or title insurance agent from suffering pecuniary damage caused by the actions of an escrow officer. Claims on the Escrow Officer Bond will be filed according to Insurance Code Section 2652.104.
The Title Insurance Agent Bond protects the Department and those involved in a real estate sale. The Department is owed administrative fees; should the title insurance agent fail to pay such fees, the bond would cover the Department’s losses. As for real estate transactions, if deceptive business practices are used in the transaction, any party that is financially injured can seek restitution from the bond according to Insurance Code Section 2651.103.
The Texas Insurance Code has established a process for those seeking action on Title Insurance Agent Bonds, as indicated in Sections 2651.103–2651.104 and Sections 2652.104–2652.105. If there is reason to believe that a loss covered by the bond has occurred, the Department of Insurance will request the title insurance agent, direct operation, or escrow officer to present their records for an examination to take place within 10-15 days of the notice to appear.
If it is found that a covered loss has occurred, the Department will contact Jet and send a proof of loss to the attorney general—for the Escrow Officer Bond, the Department will also contact the title insurance agent/direct operation. The attorney general will conduct an investigation to determine if the loss occurred; if confirmed, liability will be enforced by bringing action against the bond to reimburse those who have been financially harmed.
Perhaps; a title insurance agent or direct operation needs to have both the Escrow Officers Schedule Bond and the Title Insurance Agent/Direct Operation Bond to receive a license. But, a third bond may also be required to meet the minimum amount of unencumbered assets needed for licensure as stated in Section 2651.012.
The Minimum Capitalization Bond would be just one way to prove that you meet the minimum requirement, but there are several other ways to meet this requirement, including cash, deposits, letters of credit, real estate, liquid assets, or other accounts. Given that there are so many ways to prove that you meet the minimum capitalization requirement, it is not common for title insurance agents to hold this bond.
The amount that the Department needs to reach the minimum requirement depends on the population of the county in which the principal office is located. See the chart below for the amount needed.
|Minimum Capitalization Amount||Population|
|None Required||Less than 10,000 people|
|$25,000||10,000 – 49,999 people|
|$50,000||50,000 – 199,999 people|
|$100,000||200,000 – 999,999 people|
|$150,000||1,000,000 or more people|