Maryland Title Agents Have New Bond Requirements
Are you a Maryland Title Agent? Do You have your bond?
Maryland Title Agents are being required as of their 2016 renewal to provide a title agent bond. The Maryland Insurance Administration (MIA) is requiring title agents, regardless if they have employees,to purchase a fidelity bond or policy. For about 15 years, the MIA has been allowing waivers, but under the new commission, they realized that the waiver is not in the statute and can no longer be allowed. I have been advised that the Maryland Land Title Association’s legislative committee hopes to get this revised, but in the meantime, in order to conduct business as a title agent in Maryland you must get a fidelity bond upon your upcoming license renewal.
A Maryland Title Agent is required by the Insurance Commissioner of State of Maryland to have a bond for a $150,000 coverage limit. The purpose of the bond is to ensure that people that are exercising control over trust money do not spend or use this trust money for any way other than authorized to do so. A misuse of the money by the one entrusted with it, would result in a claim.
A fidelity bond is similar to crime insurance, which provides first party coverage. Its primary coverage is for employee theft. This will pay for loss or damage to money, securities and other property directly from theft or forgery by an employee. On the crime policy we can also offer fraudulently induced transfer coverage that would not be coverage available on a fidelity bond.
A Title agent bond is a form of insurance that title agents must buy so that they can operate their business. The surety bond ensures legal operations by the title agent and will reimburse victims of title agency fraud. Before you can purchase a bond from an agency, the business and owners must have a credit check by the bonding company and must have the application approved. Depending on the financial status of both the business and the owners will impact the price of the bond. Under a bond, the person who committed the crime will be sought after for restitution for the crime and charges will need to brought against that person before the bond will make a payment.
Regardless of whether there is a specific requirement to carry the bond or not, it always best for peace of mind and to protect yourself from employees stealing money, including escrow and operating funds is to have a title agent bond.
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