AZ Escrow Rate Regulation

Arizona Escrow Rate Statutes (updated 3-22-17)

6-846. Making of escrow rates

A. Every escrow agent who is also a title insurer or title insurance agent licensed under title 20 shall make escrow rates that are not excessive or inadequate for the safety and soundness of the escrow agent, that do not unfairly discriminate between risks in this state which involve essentially the same exposure to loss and expense elements and that give due consideration to the following:

1. The desirability for stability of rate structures.

2. The necessity, by encouraging growth in assets of escrow agents in periods of high business activity, of assuring the financial solvency of escrow agents in periods of economic depression.

3. The necessity for paying dividends on the capital stock of escrow agents sufficient to induce capital to be invested in the capital stock.

B. Every escrow agent who is required to make escrow rates under subsection A shall adopt basic classifications of escrow services that will be used as the basis for its escrow rates.

C. Rates for escrow services and title insurance policies that are issued in connection with escrow services shall not be combined.

6-846.01. Filing of escrow rates

A. Every escrow agent who is required to make escrow rates under section 6-846 shall file with the superintendent his schedules of fees, every manual of classifications, the rules and plans pertaining to the manual and every modification of any of the foregoing. The filing shall state the proposed effective date and shall indicate the character and extent of the contemplated service.

B. The superintendent shall review the filings as necessary to carry out the provisions of this article.

C. Subject to subsection E of this section, each filing does not become effective until fifteen days after the date of filing. On written notice to the escrow agent making the filing, the superintendent may extend the waiting period for up to an additional fifteen days. The waiting period may be extended further with the consent of the escrow agent making the filing. On written application by the escrow agent making the filing, the superintendent may authorize part or all of a filing to become effective before the expiration of the waiting period or any extension.

D. Except in the case of rates filed under subsection E of this section, a filing that has become effective is deemed to meet the requirements of this article.

E. If the superintendent finds that a rate for a particular kind or class of escrow service cannot practicably be filed before it is used or a kind of escrow service, by reason of rarity or peculiar circumstances, does not lend itself to advance determination and filing of rates, the superintendent pursuant to rules adopted by the superintendent may permit the rate to be used without a previous filing and waiting period.

6-846.02. Justification for escrow rates

A. An escrow agent shall accompany a rate filing with a statement setting forth the basis on which the rate was fixed and the manner in which the fees are to be computed. A filing may be justified by:

1. The experience or judgment of the escrow agent making the filing.

2. The escrow agent's interpretation of any statistical data on which the agent relied.

3. The experience of other escrow agents.

4. Any other factors that the escrow agent deems relevant.

B. The statement and justification shall be open to public inspection after the rate to which the statement and justification apply becomes effective.

6-846.03. Disapproval of escrow filings

A. Before issuing an order of disapproval and not less than twenty days after written notice, the superintendent shall hold a hearing on an escrow rate filing. The notice shall specify in reasonable detail the matters to be considered at the hearing and shall be sent to every escrow agent who made the filing. If after the hearing the superintendent finds that all or part of the filing does not satisfy the provisions of this article, the superintendent shall issue an order that specifies what part of the filing failed and, if the filing has become effective under section 6-846.01, when all or part of the filing will be deemed no longer effective. At any time an escrow agent may withdraw all or part of a filing. The superintendent shall send copies of the order to each escrow agent affected. The order does not affect any escrow that was contracted before the expiration of the period set forth in the order.

B. On written application to the superintendent a person or organization other than the escrow agent who made the filing that is aggrieved with respect to any rate filing that is in effect may request a hearing. The application shall specify in reasonable detail the grounds on which the applicant is relying. If within thirty days after receipt of the application the superintendent finds that the application was made in good faith, that the applicant would be aggrieved if his grounds are established and that the grounds justify a hearing, the superintendent, not less than twenty days after written notice to the applicant and every escrow agent who made the filing, shall hold a hearing. If after the hearing the superintendent finds that all or part of the filing does not satisfy the provisions of this article, the superintendent shall issue an order that specifies what part of the filing failed and, if the filing has become effective under section 6-846.01, when all or part of the filing will be deemed no longer effective. The superintendent shall send copies of the order to the applicant and to each escrow agent affected. The order does not affect any escrow that was contracted before the expiration of the period set forth in the order.

C. A filing or modification shall not be disapproved if the rates satisfy the requirements of this article.

6-846.04. Deviations in escrow rates; civil penalty

A. An escrow agent may not deviate from his escrow rates that are in effect pursuant to section 6-846.01.

B. If the superintendent finds that an escrow rate has been charged that deviates from the escrow rate in effect pursuant to section 6-846.01, the escrow agent may be subject to a penalty that is equal to the difference between the rate charged and the allowable rate in effect pursuant to section 6-846.01.

C. If the superintendent finds that an escrow agent knowingly or with such frequency as to indicate a general business practice violated subsection A of this section with respect to a particular provision of the applicable escrow rate, the superintendent, in addition to the penalty imposed under subsection B of this section, may:

1. For each violation, impose an additional penalty of not more than two times the penalty imposed under subsection B of this section.

2. Revoke the escrow agent's license.

D. In addition to penalties imposed under subsection B or C of this section, the superintendent may impose civil penalties pursuant to section 6-132 if the superintendent finds that an escrow agent knowingly violated subsection A of this section with respect to a particular provision of the applicable escrow rate by charging rates that are greater than the rates allowable pursuant to section 6-846.01.