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You are here: Home . bulletins . 2007 . cc10

COMMISSIONER'S BULLETIN # B-0013-07

March 27, 2007


To: All insurers writing title insurance in the State of Texas and all direct operations and agents thereof.


Re: Verifying the employment status of bona fide employees.

The Department has continued to receive inquiries from title agents and direct operations regarding what steps should be taken in order to verify whether or not an applicant for an escrow officer's license is the bona fide employee of an attorney who is licensed as an escrow officer (i.e. "fee attorney").

  • Defining bona fide employees.

According to Texas case law, a bona fide employee is a person who works in the service of another person (i.e. the employer) under a contract of hire, whether express or implied, where the employer has the power or right to control or direct the details of how work is to be performed.

  • Liability for a false statement on escrow officer's application.

An application for a Texas Escrow Officer's License requires applicants to check a box in Section A, Question #20 indicating the applicant's employment status as an attorney, a bona fide employee of a title agent or direct operation, or a bona fide employee of an attorney who is licensed as an escrow officer. If the applicant is the bona fide employee of an attorney who is licensed as an escrow officer, the fee attorney must provide a notarized signature confirming the applicant's employment status. The appointing title agent or direct operation is also charged with verifying the applicant's employment status as reported in Section A, Question #20. Each party who signs the application is reminded in prominent bold face font that:

"Securing the issuance of this license based upon a false, fictitious, or fraudulent statement or entry with regard to any material fact is subject to both disciplinary action and criminal prosecution."

If an applicant receives a license to serve as an escrow officer and it is later discovered that the applicant is not a bona fide employee of the fee attorney (i.e. the escrow officer is not employed by the fee attorney's law firm), the filing of the application is a false statement that will lead to disciplinary action against the escrow officer, fee attorney, and title agent or direct operation who signed the original application.

  • Verifying employment.

As indicated, title agents and direct operations have expressed concern about what employment verification steps should be taken before signing an Application for a Texas Escrow Officer's License. The following minimum steps are recommended by the Department, but not required:

1. Establish a uniform company policy for verifying an applicant's employment status.

This policy should require a fee attorney to submit information that is relevant to the applicant's employment status. Helpful documentation may include a copy of the applicant's paycheck or a W-2 form issued by the fee attorney's law firm. Texas Workforce Commission payroll tax records may also be helpful. Employment contracts between the escrow officer and the law firm or a dated offer and acceptance letter describing the applicant's position could be indicia of an applicant's employment status. Each title agent or direct operation should be satisfied that there is full compliance before signing a notice of appointment.

2. Send a letter to all fee attorneys outlining the title agent's or direct operation's policies for employment verification on a go forward basis.

Receipt of the letter should be confirmed and fee attorneys should be required to agree to comply with these policies in writing.

3. Adopt measures to confirm an escrow officer's employment status when a license is renewed.

Because an applicant was the bona fide employee of a fee attorney at the time of the original application does not mean the applicant's employment status is unchanged. Title agents and direct operations are encouraged to adopt the necessary procedures for verifying an applicant's employment status at the time of renewal.

The Department offers these steps as a suggested method for verifying the employment status of an applicant who claims to be the bona fide employee of a fee attorney; however, market solutions are encouraged. Rule proposals designed to address the issues related to the employment verification process are also welcome at the next biennial hearing. In the meantime, if you have additional questions, please do not hesitate to contact our office.

Robert R. Carter, Jr.

Deputy Commissioner - Title



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Last updated: 10/02/2014

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