NRS645A.041. Duty of escrow agency to deposit surety bond with Commissioner; escrow agents must be named as principals on bond; form and amount of bond; exceptions.

      1.  Except as otherwise provided in NRS 645A.042, as a condition to doing business in this State, each escrow agency shall deposit with the Commissioner and keep in full force and effect a corporate surety bond payable to the State of Nevada, in the amount set forth in subsection 4, which is executed by a corporate surety satisfactory to the Commissioner and which names as principals the escrow agency and all escrow agents employed by or associated with the escrow agency.

      2.  At the time of filing an application for a license as an escrow agent, the applicant shall file with the Commissioner proof that the applicant is named as a principal on the corporate surety bond deposited with the Commissioner by the escrow agency with whom he or she is associated or employed.

      3.  The bond must be in substantially the following form:

 

       Know All Persons by These Presents, that ........................, as principal, and ........................, as surety, are held and firmly bound unto the State of Nevada for the use and benefit of any person who suffers damages because of a violation of any of the provisions of chapter 645A of NRS, in the sum of ............, lawful money of the United States, to be paid to the State of Nevada for such use and benefit, for which payment well and truly to be made, and that we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.

       The condition of that obligation is such that: Whereas, the principal has been issued a license as an escrow agency or escrow agent by the Commissioner of Mortgage Lending of the Department of Business and Industry of the State of Nevada and is required to furnish a bond, which is conditioned as set forth in this bond:

       Now, therefore, if the principal, his or her agents and employees, strictly, honestly and faithfully comply with the provisions of chapter 645A of NRS, and pay all damages suffered by any person because of a violation of any of the provisions of chapter 645A of NRS, or by reason of any fraud, dishonesty, misrepresentation or concealment of material facts growing out of any transaction governed by the provisions of chapter 645A of NRS, then this obligation is void; otherwise it remains in full force.

       This bond becomes effective on the ..........(day) of ................(month) of ......(year), and remains in force until the surety is released from liability by the Commissioner of Mortgage Lending or until this bond is cancelled by the surety. The surety may cancel this bond and be relieved of further liability hereunder by giving 60 days’ written notice to the principal and to the Commissioner of Mortgage Lending of the Department of Business and Industry of the State of Nevada.

       In Witness Whereof, the seal and signature of the principal hereto is affixed, and the corporate seal and the name of the surety hereto is affixed and attested by its authorized officers at ........................, Nevada, this .............(day) of ................(month) of ...….(year).

 

                                                   ............................................................................. (Seal)

                                                                                    Principal

                                                   ............................................................................. (Seal)

                                                                                      Surety

                                                                           By..........................................................

                                                                                             Attorney-in-fact

                                                                           ...............................................................

                                                                            Nevada Licensed Insurance Agent

 

      4.  Each escrow agency shall deposit a corporate surety bond that complies with the provisions of this section or a substitute form of security that complies with the provisions of NRS 645A.042 in the following amount based upon the average monthly balance of the trust account or escrow account maintained by the escrow agency pursuant to NRS 645A.160:

 

AVERAGE MONTHLY BALANCE                              AMOUNT OF BOND OR

                                                                                               SECURITY REQUIRED

$50,000 or less................................................................................................ $20,000

More than $50,000 but not more than $250,000....................................... 50,000

More than $250,000 but not more than $500,000.................................. 100,000

More than $500,000 but not more than $750,000.................................. 150,000

More than $750,000 but not more than $1,000,000............................... 200,000

More than $1,000,000................................................................................... 250,000

 

The Commissioner shall determine the appropriate amount of the surety bond or substitute form of security that must be deposited initially by the escrow agency based upon the expected average monthly balance of the trust account or escrow account maintained by the escrow agency pursuant to NRS 645A.160. After the initial deposit, the Commissioner shall, on a semiannual basis, determine the appropriate amount of the surety bond or substitute form of security that must be deposited by the escrow agency based upon the average monthly balance of the trust account or escrow account maintained by the escrow agency pursuant to NRS 645A.160.

      5.  A bond used to satisfy the requirements of NRS 627.180 or a substitute for that bond which satisfies the requirements of NRS 627.183 may be used to satisfy the requirements of this section if:

      (a) The amount required by NRS 627.180 for a bond is not less than the amount required by this section for a bond; or

      (b) The amount required by NRS 627.180 for a bond is less than the amount required by this section for a bond, and the escrow agency deposits an additional bond in an amount not less than the difference between the amount required by NRS 627.180 and the amount required by this section.

      (Added to NRS by 1973, 1306; A 1985, 1810; 1991, 1849; 1993, 503, 1891; 1995, 527, 1004; 1999, 3762; 2001, 282; 2011, 3598)