Washington revised the terms of the fidelity bond required from escrow agents. The new law now requires the fidelity bond to cover the fraudulent or dishonest acts of the escrow agent’s corporate officers, partners, sole practitioners, escrow officers, and employees of the applicant engaged in escrow transactions acting alone or in collusion with others. The new law provides an exception to the bond being for the sole benefit of the escrow agent. If a corporate officer, partner or sole practitioner commits the fraudulent or dishonest act, then the bond shall be for the benefit of the harmed consumer. If such fidelity coverage is not available, a surety bond is acceptable. Legislation failed in
Hawaii to increase the amount of the fidelity bond required of escrow depositories and in
Iowa, which could have been a new bond opportunity for escrow agents.
August 2010