Insurance Administrator Title Producer ($150,000) Bond - Statewide in Maryland

Brief Summary

A Maryland title insurance producer who is not a Maryland attorney files $150,000 of surety with the Maryland Insurance Administration before the license issues. The surety bond satisfies that requirement without arranging a bank letter of credit, and agencies with employees should plan for a second $150,000 instrument, the blanket fidelity bond, at the same time.

Under Maryland Insurance Article 10-121, a business entity applying for a title insurance producer license files a $150,000 blanket surety bond or letter of credit plus a $150,000 blanket fidelity bond. The MIA also applies the surety bond to sole proprietors and exempts self-employed attorneys and law firms licensed to practice in Maryland. The bond names the State of Maryland as obligee and protects anyone who loses money held in escrow or trust.

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How to Apply for a Insurance Administrator Title Producer ($150,000) Bond:

• Individuals pass the Maryland title insurance exam and file the NAIC Uniform Application for Individual Producer.
• Business entities file the NAIC Uniform Application for Business Entity and license each controlling person and trust money controller.
• Buy a $150,000 surety bond naming the State of Maryland as obligee, or arrange a $150,000 letter of credit.
• Entities with employees also buy a $150,000 blanket fidelity bond. Sole proprietors with no employees file the fidelity bond waiver affidavit.
• Independent contractors covered by an appointed producer's bonds file the TIPIC affidavit instead of their own bonds.
• Pay the $54 initial license fee.

Detailed Information About the Maryland Insurance Administrator Title Producer ($150,000) Bond:

Two bonds, not one

The surety bond on this page is only half of what a Maryland title agency files. Insurance Article 10-121(e) requires a business entity applicant for a title insurance producer license to file a blanket fidelity bond covering appropriate employees and title insurance producer independent contractors, and either a blanket surety bond or a letter of credit. Unless the Commissioner approves a lesser amount, each one is $150,000.

The two instruments protect different people. Under 10-121(f), the surety bond or letter of credit is for the benefit of any person who suffers a loss if the producer converts or misappropriates money received or held in escrow or trust while acting as a title insurance producer or providing escrow, closing or settlement services. The fidelity bond is for the benefit of the producer's employer. Total liability under each bond or letter of credit may not exceed $150,000.

Who files and who is exempt

The MIA title FAQs say a sole proprietor, LLC, partnership or corporation that is a title insurance producer, other than self-employed attorneys and law firms licensed to practice law in Maryland, must file the $150,000 blanket surety bond or letter of credit. A sole proprietor with no employees can file a waiver affidavit for the fidelity bond. That waiver does not reach the surety bond.

An independent contractor providing escrow, closing or settlement services for a licensed and appointed producer does not file separate bonds when covered under that producer's blanket fidelity bond and blanket surety bond or letter of credit. The contractor signs the Affidavit of Title Insurance Producer Independent Contractor (TIPIC) instead and must notify the Commissioner at least ten working days before any change in status. The MIA notes that a producer may not use an independent contractor unless the producer's bonds cover that contractor or the contractor maintains a separate bond.

The bond form

The MIA publishes a Title Surety Bond form naming the State of Maryland and any unknown third party as obligee, but its FAQs say the insurer may use any surety bond form approved by the Commissioner. The surety cancels by giving the Insurance Commissioner 30 days written notice, with a copy to the principal.

License fees and term

The initial license fee is $54. Individual licenses are renewed every two years and expire on the last day of the producer's birth month. Business entity licenses expire two years from issuance. Renewal costs $69, which includes a $15 fraud prevention fee, and continuing education must be completed at least 30 days before expiration.

Eligibility and Requirements for a Maryland Insurance Administrator Title Producer ($150,000) Bond:

• Obligee: the State of Maryland and any unknown third party.
• Penal sum of $150,000 unless the Commissioner approves a lesser amount under Insurance Article 10-121(e).
• Any surety bond form approved by the Commissioner. The MIA Title Surety Bond form is available but not mandatory.
• 30 days written notice to the Insurance Commissioner before the surety cancels.
• Not required of self-employed attorneys and law firms licensed to practice law in Maryland.

Maryland Insurance Administrator Title Producer ($150,000) Bond FAQs:

Official and Additional Resources for the Maryland Insurance Administrator Title Producer ($150,000) Bond: