- October 13, 1997
- All Stewart Title Offices and Agents in Florida
- Interest Bearing Escrow Accounts Repurchase Agreements
Attached is a copy of a memorandum from the Department of Insurance dated September 30, 1997, which is directed toward interest bearing escrow accounts and repurchase agreements.
You are advised to follow the directive of the department which requires that escrow funds be held only in insured accounts.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
THE TREASURER OF THE STATE OF FLORIDA
DEPARTMENT OF INSURANCE
To:All Title Insurers
From:W. M. Senter
Subject:Interest Bearing Escrow Accounts
Date:September 30, 1997
Section 626.8473 (3) F. S. states as follows:
All funds received by a title insurance agent to be held in trust shall be immediately placed in an escrow trust account in a financial institution insured by an agency of the federal government and located within this state ...
Rule 4-186.008 (4) (a) states as follows:
All collected funds shall be deposited in a trust account held in a fiduciary capacity as required by section 626.8473, Florida Statutes, and shall be insured by an agency of the federal government.
Repurchase agreements (REPO Accounts) are not accounts insured by "an agency of the federal government" (FDIC) since they are considered "borrowed funds".
It is incumbent on all agencies and insurers, where such accounts exist, to change to an FDIC insured account immediately.
The Department considers repurchase agreements to be a statutory and rule violation since they are not insured accounts. Administrative action will be taken when such violations are found to exist.