California Requires Bond for Title Companies Providing Escrow Services


Underwritten title companies in California that engage in escrow business or act as escrow agents must now post a surety bond. Assembly Bill 704 introduces the new regulation, effective July 1, 2016. The bill will modify a portion of the California Insurance Code.

AB 704 allows companies that are stock corporations to conduct escrow services if the company meets the following requirements:

  • approval of company name from the Insurance Commissioner
  • maintains minimum net worth based on the number of documents filed in the offices of county recorders (in counties where the company is licensed to do business) in the previous calendar year
    • less than 50,000 documents – minimum net worth of $75,000
    • 50,000 to 100,000 documents – minimum net worth of $120,000
    • 100,000 to 500,000 documents – minimum net worth of $200,000
    • 500,000 to 1,000,000 documents – minimum net worth of $300,000
    • 1,000,000 or more documents – minimum net worth of $400,000
  • obtains a license to conduct business from the Department of Insurance
  • furnishes audits to the Commissioner

The underwritten title company that wishes to perform escrow services must also purchase a surety bond. The amount of the bond depends on the number of documents filed and the company’s net worth. Companies with a minimum net worth of $75,000 to $120,000 require a $50,000 surety bond. A minimum net worth of $200,000 or more requires a $100,000 bond.

In lieu of the surety bond, companies can maintain a deposit in the required amount. The Commissioner will make a special deposit in the State Treasury for that amount. If there are no claims made, the deposit will be returned with any interest and dividends to the depositor four years after all escrows handled by the depositor have been closed. The four-year period may be dismissed at the discretion of the Commissioner. Companies also have the option of obtaining an irrevocable letter of credit in lieu of the bond.

Contact the California Department of Insurance with questions about the upcoming changes. can answer your questions about purchasing a bond in California.

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About the Author

Melanie Baravik
Melanie is a senior at the University of Missouri - Columbia studying English with an emphasis in creative writing. She is a member of the marketing department and outreach team for, a leading provider of online bonding for clients nationwide.