- June 28, 1994
- All Florida Offices and Agents
- Escrow Disbursement/Uncollected Funds
The Insurance Department regulations under the "good funds" rule allow that you accept certain types of checks but you may not accept drafts. The generally accepted distinction between the two is that a draft has to be approved before it is paid whereas a check is an unconditional promise to pay. You may disburse on "good funds" even though they have not actually cleared as in "collected".
From time to time some mortgage lender will decide that it wants to use drafts. This means that the loan is not actually funded at the time you receive your package with accompanying draft but when the draft reaches the bank, it may wait for a day or several days or longer before there are sufficient funds to clear. This obviously can create a disaster in your office if you have relied upon that instrument and have disbursed.
In a memorandum dated June 15, 1994, copy enclosed, the Insurance Department has restated the regulation to remind everyone that drafts may not be honored until they are cleared and only then is a draft "good" funds. The memorandum makes it clear that the Department is prepared to take action against violators of this rule. It is necessary that you comply with this rule and if you are aware of any violations by others, they should be brought to the attention of the Insurance Department immediately.
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.
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 5.16 Escrow Closings
- Exceptions Manual: