N.M. Admin. Code § 13.14.4.10

Current through Register Vol. 35, No. 23, December 10, 2024

Section 13.14.4.10 - ACCOUNTING PROCEDURES AND INTERNAL CONTROLS

A title insurer or agency shall:

A. require two signatures on all escrow checks; one signature of which shall be a title insurance agent;

B. assign each escrow file a unique number; name identification is not acceptable;

C. on a monthly basis, an owner, officer or director shall review and approve the reconciliation for escrow accounts open for longer than six months;

D. remove the signature blocks from voided checks or otherwise render them ineffective;

E. require management approval for any transfers of funds between escrow accounts;

F. notify the seller within one day after receiving notice an earnest money check deposited in the account is returned by the financial institution to the title insurer or agency due to insufficient funds, unless the check is replaced by available funds within the one day time period; the insurer or agency shall retain a copy of written notices;

G. display related escrow file numbers directly on all escrow checks and deposit slips to provide a clear and direct connection between the document and the related escrow file;

H. maintain in each escrow file a complete, current disbursement sheet that lists the date, source and type of all receipts; date, check number, item description, payee and amount of any other disbursements and any remaining balance; voided checks that have been canceled where funds have been credited back to the account shall be shown on the disbursement sheet;

I. keep invoices substantiating, or sufficient evidence to support, all disbursements in the escrow files;

J. require reimbursement of all shortages from the title insurer's or agency's operating account within three days that reflects the transaction creating the escrow receivable or shortage, unless the shortage is the result of fraud or suspected fraud, in which case the shortage shall be cured within 45 days, unless otherwise ordered by the superintendent;

K. if a settlement statement requires changes, prepare a new statement or have all parties affected by the changes initial pen and ink changes;

L. issue a signed, pre-numbered receipt for any escrow funds received in cash;

M. if a bank does not return actual cancelled checks with bank statements, the agency shall either acquire and retain clearly legible copies of the front and back of each check, or have on file in the office an agreement with the depositor bank that ensures readily available access to such copies for at least four years;

N. an escrow account shall have the designation of "escrow" or "trust" on the bank account, checks and deposit slips; and

O. preserve for at least 15 years all escrow transaction records. This 15 year requirement for escrow records shall apply with respect to title policies issued on or after June 1, 2010.

N.M. Admin. Code § 13.14.4.10

13.14.4.10 NMAC - N, 7-1-05, Amended by New Mexico Register, Volume XXVI, Issue 24, December 30, 2015, eff. 3/1/2016, Adopted by New Mexico Register, Volume XXXI, Issue 24, December 29, 2020, eff. 1/1/2021