NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS
Title Insurance Task Force Conference Call: In advance of the upcoming Summer National Meeting in Chicago, the Title Insurance Task Force (“Task Force”) held a conference call on July 30 to discuss and act upon the following topics:
- Title Insurance Consumer Shopping Tool and Buyers Guide: The Title Insurance Consumer Shopping Tools Working Group presented a draft template entitled “How to Buy Title Insurance in [Insert State].” The purpose of the template is to provide states with a ready-made consumer education publication regarding title insurance that can be edited to meet the individual needs of a state. The Task Force discussed the template and heard comments from its members, including California, which requested language discussing coverage for catastrophe exposures such as earthquake, floods and wildfires. Following the discussion, the Task Force voted to adopt the template.
- Title Insurance Guaranty Fund Working Group: The Task Force voted to disband the Title Insurance Guaranty Fund Working Group now that its goal of publishing title insurance guaranty fund guidelines has been accomplished.
- Affiliated Business Arrangements (“AfBA”): At the May conference call of the Task Force, an update to the 2010 “Survey of State Insurance Laws Regarding Title Data and Title Matters” was discussed and Nebraska Insurance Department Director Bruce Ramge, chair of the Task Force, recommended that the updated version of the survey include information on state requirements applicable to AfBAs. A draft document entitled “Summary of Affiliated Business Arrangements” that surveys disclosure requirements for AfBA’s under federal and state laws was presented to the Task Force and includes information on federal and state disclosure requirements in currently in place (Colorado, Nebraska), states considering enhanced AfBA regulation (Florida, New York) and a proposed AfBA disclosure form from NAIC consumer representatives (Birny Birnbaum). At the upcoming Chicago meeting of the Task Force, the AfBA document will be discussed further, as well as state responses to the Task Force’s survey of state regulation of AfBAs.
New Regulations Proposed: The Colorado Department of Regulatory Agencies, Division of Insurance, recently proposed new Regulations 8-1-1 and 8-1-2 (3 CCR 702-8) in connection with title insurance rates and fees and consumer protection. Proposed Regulation 8-1-1 relocates provisions for rate and fee filings by title insurers currently found in Regulations 3-5-1 and 5-1-10 to the new regulation and adds a new requirement for all title agents and insurers to comply with the same fee filing standards. Proposed Regulation 8-1-2 relocates consumer protection provisions currently in Regulations 3-5-1 and 5-1-10 to the new regulation and adds new requirements, including: (i) recording certain documents within 7 calendar days, and (ii) issuing and delivering title insurance policies to insureds within 90 calendar days after the effective date of the policy or satisfaction of the terms, conditions and requirements of the title commitment. The proposed regulations have an effective date of October 1, 2015.
Bulletin Discusses State Escrow Requirements: The New Mexico Insurance Department of Insurance recently published Bulletin 2015-023, which reaffirms the applicability of certain state escrow service requirements in the face of the forthcoming CFPB changes to consumer disclosure requirements. The bulletin stated that the following requirements under New Mexico law remain in place, including (i) the delivery to each affected party of a written statement of the escrow specifying all receipts and disbursements of funds made by or on behalf of each affected party to or from the escrow account, including from whom received and to whom made and maintaining a disbursement; and (ii) maintaining 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 all checks; date, amount and type of any other disbursements (such as outgoing wire-transfers) and any remaining balance; and voided checks that have been canceled where funds have been credited back to the account shall be shown on the disbursement sheet.
Texas Closing Disclosure Form Adopted: The Texas Department of Insurance issued Commissioner’s Order 4038 (the “Order”), effective August 1, that adopts a new procedural rule and Form T-64 (the “Texas Disclosure”) as amendments to the state’s title insurance rate manual. The Texas Disclosure is an addendum to the new CFPB closing disclosure form. The procedural rule requires settlement agents to use the Texas Disclosure along with the CFPB closing disclosure form. The Order states the Texas Disclosure is necessary to provide a clear and complete disclosure of closing and title insurance costs in Texas, as some of the changes in the CFPB closing disclosure conflict with Texas closing requirements and practices. The Texas Disclosure will require agents to list portions of the premium or real estate commission paid to third parties and requires settlement agents to separately itemize other fees and charges paid to the real estate agent that may have been aggregated on the CFPB closing disclosure. In addition, the Texas Disclosure will show the actual price for title insurance in a simultaneous-issue transaction in the state. The Texas Disclosure also adds a signature line, authorizing the settlement agent to disburse the funds.