(a) All deposits, excluding processing fees, shall be placed in an escrow account. All terms governing the deposit escrow account shall be approved in advance by the department.
(b) The deposit escrow account shall be established by an escrow agent and all deposits shall be deposited in a depository located in California and approved by the department. The department’s approval of the depository shall be based, in part, upon its ability to ensure the safety of funds and properties entrusted to it and its qualifications to perform the obligations of the depository pursuant to the deposit escrow account agreement and this chapter. The depository may be the same entity as the escrow agent. All deposits shall be kept and maintained in a segregated account without any commingling with other funds, including any funds or accounts owned by the applicant.
(c) If the escrow agent is a title company, it shall meet the following requirements:
(1) A Standard and Poors rating of “A” or better or a comparable rating from a comparable rating service.
(2) Licensure in good standing with the Department of Insurance.
(3) Tangible net equity as required by the Department of Insurance.
(4) Reserves as required by the Department of Insurance.
(d) All deposits shall remain in escrow until the department has authorized release of the deposits, as provided in Section 1783.3.
(e) Deposits shall be invested in instruments guaranteed by the federal government or an agency of the federal government, or in investment funds secured by federally guaranteed instruments.
(f) No funds deposited in a deposit escrow account shall be subject to any liens, judgments, garnishments, or creditor’s claims against the applicant or the continuing care retirement community. The deposit agreement shall also provide that deposits may not be subject to any liens or charges by the escrow agent except that cash equivalent deposits may be subject to transaction fees, commissions, prepayment penalties, and other fees incurred in connection with those deposits.
(Amended by Stats. 2000, Ch. 820, Sec. 34. Effective January 1, 2001.)
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