Bill Text: IL HB3701 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Title Insurance Act. Provides that it is unlawful for any person, firm, partnership, association, corporation, or other legal entity to act as or hold itself out to be a title insurance agent without first procuring a license from the Secretary of Financial and Professional Regulation. Provides that the Secretary or the Secretary's authorized representative shall have the power and authority to compel an independent escrowee's compliance with the provisions of the Act. Provides that every title insurance agent shall pay specified fees. Provides that the Secretary may require participation in a third-party, multi-state licensing system. Sets forth additional title insurance licensing requirements for applicants. Provides that a title insurance license shall be renewed every 2 years (rather than annually). Sets forth provisions concerning premiums and endorsement charges. Provides that the Secretary may refuse to grant, and may suspend or revoke, any certificate of authority, registration, or license or may impose a fine if he or she determines that the holder of or applicant for such certificate, registration, or license has engaged in specified acts. Removes language that provides that expenses incurred in the course of such examinations will be the responsibility of the title insurance company, and that if a present or former registered agent or its successor refuses or is unable to cooperate with a title insurance company in furnishing the records requested by the Secretary or his or her authorized agent, then the Secretary or his or her authorized agent shall have the power and authority to obtain those records directly from the registered agent. Makes other changes. Defines terms. Effective January 1, 2024.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-03-10 - Rule 19(a) / Re-referred to Rules Committee [HB3701 Detail]

Download: Illinois-2023-HB3701-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3701 Introduced , by Rep. Camille Y. Lilly SYNOPSIS AS INTRODUCED:
215 ILCS 155/3 from Ch. 73, par. 1403
215 ILCS 155/5 from Ch. 73, par. 1405
215 ILCS 155/12 from Ch. 73, par. 1412
215 ILCS 155/14 from Ch. 73, par. 1414
215 ILCS 155/16 from Ch. 73, par. 1416
215 ILCS 155/17 from Ch. 73, par. 1417
215 ILCS 155/18 from Ch. 73, par. 1418
215 ILCS 155/18.2 new
215 ILCS 155/19 from Ch. 73, par. 1419
215 ILCS 155/21 from Ch. 73, par. 1421
Amends the Title Insurance Act. Provides that it is unlawful for any person, firm, partnership, association, corporation, or other legal entity to act as or hold itself out to be a title insurance agent without first procuring a license from the Secretary of Financial and Professional Regulation. Provides that the Secretary or the Secretary's authorized representative shall have the power and authority to compel an independent escrowee's compliance with the provisions of the Act. Provides that every title insurance agent shall pay specified fees. Provides that the Secretary may require participation in a third-party, multi-state licensing system. Sets forth additional title insurance licensing requirements for applicants. Provides that a title insurance license shall be renewed every 2 years (rather than annually). Sets forth provisions concerning premiums and endorsement charges. Provides that the Secretary may refuse to grant, and may suspend or revoke, any certificate of authority, registration, or license or may impose a fine if he or she determines that the holder of or applicant for such certificate, registration, or license has engaged in specified acts. Removes language that provides that expenses incurred in the course of such examinations will be the responsibility of the title insurance company, and that if a present or former registered agent or its successor refuses or is unable to cooperate with a title insurance company in furnishing the records requested by the Secretary or his or her authorized agent, then the Secretary or his or her authorized agent shall have the power and authority to obtain those records directly from the registered agent. Makes other changes. Defines terms. Effective January 1, 2024.
LRB103 29438 BMS 55829 b
A BILL FOR
HB3701 LRB103 29438 BMS 55829 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Title Insurance Act is amended by changing
Sections 3, 5, 12, 14, 16, 17, 18, 19, and 21 and by adding
Section 18.2 as follows:
(215 ILCS 155/3) (from Ch. 73, par. 1403)
Sec. 3. As used in this Act, the words and phrases
following shall have the following meanings unless the context
requires otherwise:
(1) "Title insurance business" or "business of title
insurance" means:
(A) Issuing as insurer or offering to issue as insurer
title insurance; and
(B) Transacting or proposing to transact one or more
of the following activities when conducted or performed in
contemplation of or in conjunction with the issuance of
title insurance;
(i) soliciting or negotiating the issuance of
title insurance;
(ii) guaranteeing, warranting, or otherwise
insuring the correctness of title searches for all
instruments affecting titles to real property, any

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interest in real property, cooperative units and
proprietary leases, and for all liens or charges
affecting the same;
(iii) handling of escrows, settlements, or
closings;
(iv) executing title insurance policies;
(v) effecting contracts of reinsurance;
(vi) abstracting, searching, or examining titles;
or
(vii) issuing insured closing letters or closing
protection letters;
(C) Guaranteeing, warranting, or insuring searches or
examinations of title to real property or any interest in
real property, with the exception of preparing an
attorney's opinion of title; or
(D) Guaranteeing or warranting the status of title as
to ownership of or liens on real property and personal
property by any person other than the principals to the
transaction; or
(E) Doing or proposing to do any business
substantially equivalent to any of the activities listed
in this subsection, provided that the preparation of an
attorney's opinion of title pursuant to paragraph (1)(C)
is not intended to be within the definition of "title
insurance business" or "business of title insurance".
(1.5) "Title insurance" means insuring, guaranteeing,

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warranting, or indemnifying owners of real or personal
property or the holders of liens or encumbrances thereon or
others interested therein against loss or damage suffered by
reason of liens, encumbrances upon, defects in, or the
unmarketability of the title to the property; the invalidity
or unenforceability of any liens or encumbrances thereon; or
doing any business in substance equivalent to any of the
foregoing. "Warranting" for purpose of this provision shall
not include any warranty contained in instruments of
encumbrance or conveyance. Title insurance is a single line
form of insurance, also known as monoline. An attorney's
opinion of title pursuant to paragraph (1)(C) is not intended
to be within the definition of "title insurance".
(2) "Title insurance company" means any domestic company
organized under the laws of this State for the purpose of
conducting the business of title insurance and any title
insurance company organized under the laws of another State,
the District of Columbia or foreign government and authorized
to transact the business of title insurance in this State.
(3) "Title insurance agent" means a person, firm,
partnership, association, corporation or other legal entity
licensed under this Act registered by a title insurance
company and authorized by a title insurance such company to
determine insurability of title in accordance with generally
acceptable underwriting rules and standards in reliance on
either the public records or a search package prepared from a

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title plant, or both, and authorized by such title insurance
company in addition to do any of the following: act as an
escrow agent pursuant to subsections (f), (g), and (h) of
Section 16 of this Act, solicit title insurance, collect
premiums, or issue title insurance commitments, policies, and
endorsements of the title insurance company; provided,
however, the term "title insurance agent" shall not include
officers and salaried employees of any title insurance
company.
(4) "Producer of title business" is any person, firm,
partnership, association, corporation or other legal entity
engaged in this State in the trade, business, occupation or
profession of (i) buying or selling interests in real
property, (ii) making loans secured by interests in real
property, or (iii) acting as broker, agent, attorney, or
representative of natural persons or other legal entities that
buy or sell interests in real property or that lend money with
such interests as security.
(5) "Associate" is any firm, association, partnership,
corporation or other legal entity organized for profit in
which a producer of title business is a director, officer, or
partner thereof, or owner of a financial interest, as defined
herein, in such entity; any legal entity that controls, is
controlled by, or is under common control with a producer of
title business; and any natural person or legal entity with
whom a producer of title business has any agreement,

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arrangement, or understanding or pursues any course of conduct
the purpose of which is to evade the provisions of this Act.
(6) "Financial interest" is any ownership interest, legal
or beneficial, of more than 1% in a privately held or except
ownership of publicly traded company stock.
(7) "Refer" means to place or cause to be placed, or to
exercise any power or influence over the placing of title
business, whether or not the consent or approval of any other
person is sought or obtained with respect to the referral.
(8) "Escrow Agent" means any title insurance company or
any title insurance agent, including independent contractors
of either, acting on behalf of a title insurance company,
which receives deposits, in trust, of funds or documents, or
both, for the purpose of effecting the sale, transfer,
encumbrance or lease of real property to be held by such escrow
agent until title to the real property that is the subject of
the escrow is in a prescribed condition. An escrow agent
conducting closings shall be subject to the provisions of
paragraphs (1) through (4) of subsection (e) of Section 16 of
this Act.
(9) "Independent Escrowee" means any firm, person,
partnership, association, corporation or other legal entity,
other than a title insurance company or a title insurance
agent, which receives deposits, in trust, of funds or
documents, or both, for the purpose of effecting the sale,
transfer, encumbrance or lease of real property to be held by

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such escrowee until title to the real property that is the
subject of the escrow is in a prescribed condition. Federal
and State chartered banks, savings and loan associations,
credit unions, mortgage bankers, banks or trust companies
authorized to do business under the Illinois Corporate
Fiduciary Act, licensees under the Consumer Installment Loan
Act, real estate brokers licensed pursuant to the Real Estate
License Act of 2000, as such Acts are now or hereafter amended,
and licensed attorneys when engaged in the attorney-client
relationship are exempt from the escrow provisions of this
Act. "Independent Escrowee" does not include employees or
independent contractors of a title insurance company or title
insurance agent authorized by a title insurance company to
perform closing, escrow, or settlement services.
(10) "Single risk" means the insured amount of any title
insurance policy, except that where 2 or more title insurance
policies are issued simultaneously covering different estates
in the same real property, "single risk" means the sum of the
insured amounts of all such title insurance policies. Any
title insurance policy insuring a mortgage interest, a claim
payment under which reduces the insured amount of a fee or
leasehold title insurance policy, shall be excluded in
computing the amount of a single risk to the extent that the
insured amount of the mortgage title insurance policy does not
exceed the insured amount of the fee or leasehold title
insurance policy.

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(11) "Department" means the Department of Financial and
Professional Regulation.
(12) "Secretary" means the Secretary of Financial and
Professional Regulation.
(13) "Insured closing letter" or "closing protection
letter" means an indemnification or undertaking to a party to
a real property transaction, from a principal such as a title
insurance company, setting forth in writing the extent of the
principal's responsibility for intentional misconduct or
errors in closing the real property transaction on the part of
a settlement agent, such as a title insurance agent or other
settlement service provider, or an indemnification or
undertaking given by a title insurance company or an
independent escrowee setting forth in writing the extent of
the title insurance company's or independent escrowee's
responsibility to a party to a real property transaction which
indemnifies the party against the intentional misconduct or
errors in closing the real property transaction on the part of
the title insurance company or independent escrowee and
includes protection afforded pursuant to subsections (f), (g),
and (h) of Section 16, Section 16.1, subsection (h) of Section
17, and Section 17.1 of this Act even if such protection is
afforded by contract.
(14) "Residential real property" means a building or
buildings consisting of one to 4 residential units or a
residential condominium unit where at least one of the

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residential units or condominium units is occupied or intended
to be occupied as a residence by the purchaser or borrower, or
in the event that the purchaser or borrower is the trustee of a
trust, by a beneficiary of that trust.
(15) "Financial institution" means any bank subject to the
Illinois Banking Act, any savings and loan association subject
to the Illinois Savings and Loan Act of 1985, any savings bank
subject to the Savings Bank Act, any credit union subject to
the Illinois Credit Union Act, and any federally chartered
commercial bank, savings and loan association, savings bank,
or credit union organized and operated in this State pursuant
to the laws of the United States.
(16) "Core title services" means to:
(A) determine insurability of title, which includes
title examination and title clearance; and
(B) issue or cause to issue title insurance
commitments, policies, and endorsements.
(17) "Multi-state licensing system" means a web-based
platform that allows an applicant to submit his or her
application or license renewal application to the Department
online.
(Source: P.A. 100-485, eff. 9-8-17.)
(215 ILCS 155/5) (from Ch. 73, par. 1405)
Sec. 5. Certificate of authority required to engage in
activities under this Act.

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(a) It is unlawful for any company to engage or to continue
in the business of title insurance without first procuring
from the Secretary a certificate of authority stating that the
company has complied with the requirements of Section 4 of
this Act. An insurer that transacts any class of insurance
other than title insurance anywhere in the United States is
not eligible for the issuance of a certificate of authority to
transact title insurance in this State nor for a renewal of a
certificate of authority.
(b) It is unlawful for any person, firm, partnership,
association, corporation, or other legal entity to act as or
hold itself out to be a title insurance agent without first
procuring from the Secretary a license subject to the
conditions of Section 16.
(c) As used in this Act, the terms "license" and
"certificate of authority" have the same meaning.
(Source: P.A. 94-893, eff. 6-20-06.)
(215 ILCS 155/12) (from Ch. 73, par. 1412)
Sec. 12. Examinations; compliance.
(a) The Secretary or his authorized representative shall
have the power and authority, and it shall be his duty, to
cause to be visited and examined annually any title insurance
company doing business under this Act, and to verify and
compel compliance with the provisions of law governing it.
(b) The Secretary or his authorized representative agent

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shall have power and authority to compel compliance with the
provisions of this Act, may visit a title insurance agent, and
shall, only upon the showing of good cause, require a title
insurance agent to make appropriate records any title
insurance company to take all legal means to obtain the
appropriate records of its registered agents and make them
available for examination at a time and place designated by
the Secretary. Expenses incurred in the course of such
examinations will be the responsibility of the title insurance
company. In the event that a present or former registered
agent or its successor refuses or is unable to cooperate with a
title insurance company in furnishing the records requested by
the Secretary or his or her authorized agent, then the
Secretary or his or her authorized agent shall have the power
and authority to obtain those records directly from the
registered agent.
(c) The Secretary or the Secretary's authorized
representative shall have the power and authority to compel an
independent escrowee's compliance with the provisions of this
Act pursuant to subsection (f) of Section 17.
(Source: P.A. 94-893, eff. 6-20-06.)
(215 ILCS 155/14) (from Ch. 73, par. 1414)
Sec. 14. Fees.
(a) Every title insurance company and every independent
escrowee subject to this Act shall pay the following fees:

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(1) for filing the original application for a
certificate of authority and receiving the deposit
required under this Act, $500;
(2) for the certificate of authority, $10;
(3) for every copy of a paper filed in the Department
under this Act, $1 per folio;
(4) for affixing the seal of the Department and
certifying a copy, $2; and
(5) for filing the annual statement, $50.
(b) Each title insurance company shall remit, for all of
its title insurance agents subject to this Act for filing an
annual registration of its agents, an amount equal to $3 for
each policy issued by all of its title insurance agents in the
immediately preceding calendar year.
(c) Every title insurance agent subject to this Act shall
pay the following fees:
(1) for a resident of this State filing the original
application for a certificate of authority and for the
certificate of authority, $80;
(2) for a nonresident of this State filing the
original application for a certificate of authority and
for the certificate of authority, $120;
(3) for a resident or nonresident of this State filing
for renewal of a certificate of authority, $80; and
(4) for a resident or nonresident of this State filing
for reinstatement of a lapsed certificate of authority,

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$120.
(Source: P.A. 99-104, eff. 1-1-16.)
(215 ILCS 155/16) (from Ch. 73, par. 1416)
Sec. 16. Title insurance agents.
(a) No person, firm, partnership, association, corporation
or other legal entity shall act as or hold itself out to be a
title insurance agent unless it is authorized to perform core
title services duly registered by a title insurance company
and has a license from with the Secretary. Every title
insurance agent registration issued before, on, or after the
effective date of this amendatory Act of the 103rd General
Assembly shall satisfy the requirements for a license under
this amendatory Act of the 103rd General Assembly until
January 1 of the calendar year immediately following the
adoption of rules by the Department as may be necessary for the
administration of granting of the license for title insurance
agents under this amendatory Act of the 103rd General
Assembly, and until the related application is either approved
or disapproved. The continued recognition of such title
insurance agent registrations during this period does not
relieve title insurance agents and title insurance companies
of their other obligations under this Act before, on, or after
the effective date of this amendatory Act of the 103rd General
Assembly.
(b) Each application for a license registration shall be

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made on a form specified by the Secretary and prepared by each
title insurance company which the agent represents. The title
insurance company shall retain the copy of the application and
forward a copy to the Secretary. The Secretary may require
participation in a third-party, multi-state licensing system
for licensing under this Act. The third-party, multi-state
licensing system may share regulatory information and maintain
records in compliance with the provisions of this Act. The
third-party, multi-state licensing system may charge an
administration fee. The title insurance agent licensing fees
that are set forth in Section 14 shall be paid by the title
insurance agent to the Department.
(c) License applications shall comply with the following:
(1) Every applicant for a license registration, except
a firm, partnership, association, limited liability
company, or corporation, must be 18 years or more of age.
(2) Every applicant for a license that is a firm,
partnership, association, corporation, or other legal
entity shall designate and name at least one individual
who:
(i) has a financial interest in the licensee; and
(ii) is authorized by at least one title insurance
company to determine insurability of title.
(3) Included in every application for a license
registration of a title insurance agent, including a firm,
partnership, association, limited liability company, or

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corporation, shall be an affidavit of the applicant title
insurance agent, signed and notarized in front of a notary
public, affirming that the applicant and every owner,
officer, director, principal, member, or manager of the
applicant has never been convicted or pled guilty to any
felony or misdemeanor involving a crime of theft or
dishonesty or otherwise accurately disclosing any such
felony or misdemeanor involving a crime of theft or
dishonesty. No person who has had a conviction or pled
guilty to any felony or misdemeanor involving theft or
dishonesty may be appointed registered by a title
insurance company without a written notification to the
Secretary disclosing the conviction or plea, and no such
person may serve as an owner, officer, director,
principal, or manager of any registered title insurance
agent without the written permission of the Secretary.
(4) Every applicant shall obtain and maintain errors
and omissions insurance or its equivalent, such as
malpractice insurance covering title insurance agent
services, in an amount acceptable to the title insurance
company authorizing the agent, but in no event in an
amount less than $250,000 per claim and an aggregate limit
of $500,000 with a deductible in an amount acceptable to
the title insurance company appointing the agent. A title
insurance company shall not provide the insurance directly
or indirectly on behalf of a title insurance agent. If

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errors and omissions insurance is unavailable generally,
the Department shall adopt rules for alternative methods
to comply with this paragraph.
(d) A license Registration shall be renewed by February 1
every 2 years made annually by a filing with the Secretary or
other method using a multi-state licensing system as
determined by the Secretary through the adoption of rules;
supplemental filings registrations for a new agency agreement
with a title insurance company agents to be added between
license renewal annual filings shall be made from time to time
in the manner provided by the Secretary; licenses
registrations shall remain in effect unless revoked or
suspended by the Secretary, or voluntarily withdrawn by the
title insurance agent, registrant or the title insurance agent
no longer has any agency agreement with a title insurance
company.
(e) Funds deposited in connection with any escrows,
settlements, or closings shall be deposited in a separate
fiduciary trust account or accounts in a bank or other
financial institution insured by an agency of the federal
government unless the instructions provide otherwise. The
funds shall be the property of the person or persons entitled
thereto under the provisions of the escrow, settlement, or
closing and shall be segregated by escrow, settlement, or
closing in the records of the escrow agent. The funds shall not
be subject to any debts of the escrowee and shall be used only

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in accordance with the terms of the individual escrow,
settlement, or closing under which the funds were accepted.
Interest received on funds deposited with the escrow agent
in connection with any escrow, settlement, or closing shall be
paid to the depositing party unless the instructions provide
otherwise.
The escrow agent shall maintain separate records of all
receipts and disbursements of escrow, settlement, or closing
funds.
The escrow agent shall comply with any rules adopted by
the Secretary pertaining to escrow, settlement, or closing
transactions.
(f) A title insurance agent shall not act as an escrow
agent in a nonresidential real property transaction where the
amount of settlement funds on deposit with the escrow agent is
less than $2,000,000 or in a residential real property
transaction unless the title insurance agent, title insurance
company, or another authorized title insurance agent has
committed for the issuance of title insurance in that
transaction and the title insurance agent is authorized to act
as an escrow agent on behalf of the title insurance company for
which the commitment for title insurance has been issued. The
authorization under the preceding sentence shall be given
either (1) by an agency contract with the title insurance
company which contract, in compliance with the requirements
set forth in subsection (g) of this Section, authorizes the

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title insurance agent to act as an escrow agent on behalf of
the title insurance company or (2) by a closing protection
letter in compliance with the requirements set forth in
Section 16.1 of this Act, issued by the title insurance
company to the seller, buyer, borrower, and lender. A closing
protection letter shall not be issued by a title insurance
agent. The provisions of this subsection (f) shall not apply
to the authority of a title insurance agent to act as an escrow
agent under subsection (g) of Section 17 of this Act.
(g) If an agency contract between the title insurance
company and the title insurance agent is the source of the
authority under subsection (f) of this Section for a title
insurance agent to act as escrow agent for a real property
transaction, then the agency contract shall provide for no
less protection from the title insurance company to all
parties to the real property transaction than the title
insurance company would have provided to those parties had the
title insurance company issued a closing protection letter in
conformity with Section 16.1 of this Act.
(h) A title insurance company shall be liable for the acts
or omissions of its title insurance agent as an escrow agent if
the title insurance company has authorized the title insurance
agent under subsections (f) and (g) of this Section 16 and only
to the extent of the liability undertaken by the title
insurance company in the agency agreement or closing
protection letter. The liability, if any, of the title

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insurance agent to the title insurance company for acts and
omissions of the title insurance agent as an escrow agent
shall not be limited or otherwise modified because the title
insurance company has provided closing protection to a party
or parties to a real property transaction escrow, settlement,
or closing. The escrow agent shall not charge a fee for
protection provided by a title insurance company to parties to
real property transactions under subsections (f) and (g) of
this Section 16 and Section 16.1, but shall collect from the
parties the fee charged by the title insurance company and
shall promptly remit the fee to the title insurance company.
The title insurance company may charge the parties a
reasonable fee for protection provided pursuant to subsections
(f) and (g) of this Section 16 and Section 16.1 and shall not
pay any portion of the fee to the escrow agent. The payment of
any portion of the fee to the escrow agent by the title
insurance company, shall be deemed a prohibited inducement or
compensation in violation of Section 24 of this Act. Any other
charges to a party to the transaction that are related to
escrow services shall not be duplicative of any other charges
to that party and shall be commensurate with the actual cost of
the work performed and the material furnished.
(i) The Secretary shall adopt and amend such rules as may
be required for the proper administration and enforcement of
this Section 16 consistent with the federal Real Estate
Settlement Procedures Act and Section 24 of this Act.

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(Source: P.A. 98-398, eff. 1-1-14; 98-832, eff. 1-1-15;
99-104, eff. 1-1-16.)
(215 ILCS 155/17) (from Ch. 73, par. 1417)
Sec. 17. Independent escrowees.
(a) Every independent escrowee shall be subject to the
same certification and deposit requirements to which title
insurance companies are subject under Section 4 of this Act.
(b) No person, firm, corporation or other legal entity
shall hold itself out to be an independent escrowee unless it
has been issued a certificate of authority by the Secretary.
(c) Every applicant for a certificate of authority, except
a firm, partnership, association or corporation, must be 18
years or more of age.
(d) Every certificate of authority shall remain in effect
one year unless revoked or suspended by the Secretary or
voluntarily surrendered by the holder.
(e) An independent escrowee may engage in the escrow,
settlement, or closing business, or any combination of such
business, and operate as an escrow, settlement, or closing
agent, provided that:
(1) Funds deposited in connection with any escrow,
settlement, or closing shall be deposited in a separate
fiduciary trust account or accounts in a bank or other
financial institution insured by an agency of the federal
government unless the instructions provide otherwise. Such

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funds shall be the property of the person or persons
entitled thereto under the provisions of the escrow,
settlement, or closing and shall be segregated by escrow,
settlement or closing in the records of the independent
escrowee. Such funds shall not be subject to any debts of
the escrowee and shall be used only in accordance with the
terms of the individual escrow, settlement or closing
under which the funds were accepted.
(2) Interest received on funds deposited with the
independent escrowee in connection with any escrow,
settlement or closing shall be paid to the depositing
party unless the instructions provide otherwise.
(3) The independent escrowee shall maintain separate
records of all receipt and disbursement of escrow,
settlement or closing funds.
(4) The independent escrowee shall comply with any
rules or regulations promulgated by the Secretary
pertaining to escrow, settlement or closing transactions.
(f) The Secretary or his authorized representative shall
have the power and authority to visit and examine at any time
any independent escrowee certified under this Act and to
verify and compel compliance with the provisions of this Act.
(g) A title insurance company or title insurance agent,
not qualified as an independent escrowee, may act in the
capacity of an escrow agent when it is supplying an abstract of
title, grantor-grantee search, tract search, lien search, tax

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assessment search, or other limited purpose search to the
parties to the transaction even if it is not issuing a title
insurance commitment or title insurance policy. A title
insurance agent may act as an escrow agent only when
specifically authorized in writing on forms prescribed by the
Secretary by a title insurance company that has duly
registered the agent with the Secretary and only when notice
of the authorization is provided to and receipt thereof is
acknowledged by the Secretary. The authority granted to a
title insurance agent may be limited or revoked at any time by
the title insurance company.
(h) An independent escrowee may, pursuant to Section 17.1
of this Act, issue an insured closing letter if, in addition to
complying with the same certification and deposit requirements
that title insurance companies are subject to under Section 4
of this Act, the independent escrowee:
(1) Satisfies the Secretary that it has a minimum
capital and surplus of $2,000,000. The Secretary may
provide the forms and standards for this purpose by rule.
This paragraph applies only to independent escrowees
licensed under this Act for the first time on or after the
effective date of this amendatory Act of the 100th General
Assembly.
(2) Files with and has approved by the Secretary proof
of a fidelity bond in the minimum amount of $2,000,000 per
occurrence.

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(3) Establishes and maintains a statutory closing
protection letter reserve for the protection of parties
named in warranties of services consisting of a sum of 25%
of the closing protection letter revenue received by the
independent escrowee on or after the effective date of
this amendatory Act of the 100th General Assembly. The
reserve shall be reported as a liability of the
independent escrowee in its financial statements. Amounts
placed in the statutory closing protection letter reserve
shall be deducted in determining the net profit of the
independent escrowee for the year. Except as provided in
this subsection, assets in value equal to the statutory
closing protection letter reserve are not subject to
distribution among creditors, stockholders, or other
owners of the independent escrowee until all claims of
parties named in warranties of services have been paid in
full and discharged.
(4) Releases from the statutory closing protection
letter reserve a sum equal to 10% of the amount added to
the reserve during a calendar year on July 1 of each of the
5 years following the year in which the sum was added and
releases from the statutory closing protection letter
reserve a sum equal to 3 1/3% of the amount added to the
reserve during that year on each succeeding July 1 until
the entire amount for that year has been released.
Notwithstanding an insured closing letter pursuant to

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Section 17.1, any other charges to a party to the transaction
that are related to escrow services shall not be duplicative
of any other charges to that party and shall be commensurate
with the actual cost of the work performed and the material
furnished.
The Secretary shall adopt and amend rules as may be
required for the proper administration and enforcement of this
subsection (h) consistent with the federal Real Estate
Settlement and Procedures Act and Section 24 of this Act.
(Source: P.A. 100-485, eff. 9-8-17.)
(215 ILCS 155/18) (from Ch. 73, par. 1418)
Sec. 18. Disclosure of financial interests No referral
payments; kickbacks.
(a) Application of this Section is limited to residential
properties of 4 or fewer units, at least one of which units is
occupied or to be occupied by an owner, legal or beneficial.
(b) No title insurance company, independent escrowee, or
title insurance agent may issue a title insurance policy to,
or provide services to an applicant if it knows or has reason
to believe that the applicant was referred to it by any
producer of title business or by any associate of such
producer, where the producer, the associate, or both, have a
financial interest in the title insurance company, independent
escrowee, or title insurance agent to which business is
referred unless the producer has disclosed to any party paying

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for the products or services, or his representative, the
financial interest of the producer of title business or
associate referring the title business and a disclosure of an
estimate of those charges to be paid as described in Section
19. Such disclosure must be made in writing on forms
prescribed by the Secretary prior to the time that the
commitment for title insurance is issued. The title insurance
company, independent escrowee, or title insurance agent shall
maintain the disclosure forms for a period of 3 years.
(c) Each title insurance company, independent escrowee,
and title insurance agent shall file with the Secretary, on
forms prescribed by the Secretary, reports setting forth the
names and addresses of those persons, if any, who have had a
financial interest in the title insurance company, independent
escrowee, or title insurance agent during the calendar year,
who are known or reasonably believed by the title insurance
company, independent escrowee, or title insurance agent to be
producers of title business or associates of producers.
(1) Each title insurance company and independent
escrowee shall file the report required under this
subsection with its application for a certificate of
authority and at any time there is a change in the
information provided in the last report.
(2) Each title insurance agent shall file the report
required under this subsection with its title insurance
company for inclusion with its application for

HB3701 - 25 - LRB103 29438 BMS 55829 b
registration and at any time there is a change in the
information provided in its last report.
(3) Each title insurance company, independent
escrowee, or title insurance agent doing business on the
effective date of this Act shall file the report required
under this subsection within 90 days after such effective
date.
(Source: P.A. 94-893, eff. 6-20-06.)
(215 ILCS 155/18.2 new)
Sec. 18.2. Retention and remittance of premiums and
endorsement charges.
(a) Regarding residential real property transactions, from
the owner's policy premium, loan policy premium, and
endorsement charges, not including closing protection letter
charges, a title insurance agent shall retain 85% and remit
15% to a title insurance company for each premium and
endorsement that the title insurance agent performs at least
core title services. For such residential real property
transactions, if the title insurance agent does not perform at
least core title services for a premium or endorsement charge,
then the title insurance agent or title insurance company
performing the core title services shall be compensated an
amount equal to 85% of each premium or endorsement charge for
which they perform the core title services. If title services
subject to this Act are provided to a title insurance agent by

HB3701 - 26 - LRB103 29438 BMS 55829 b
another entity or individual, there shall be a written service
agreement for such services, payment shall be made pursuant to
the agreement if the transaction closes or the policy is
issued, any charges to a party to the transaction that are
related to such services shall not be duplicative of any other
charges to that party, and, if applicable, shall be in
compliance with subparagraph (F) of paragraph (18) of
subsection (a) of Section 21.
(b) Any fees charged to the parties to the transaction
other than the owner's policy premium, loan policy premium,
and endorsement charges shall not be duplicative of any other
charges to that party, shall be retained or remitted in an
amount commensurate with the actual cost of the work performed
and material furnished, and, if applicable, shall be in
compliance with subparagraph (F) of paragraph (18) of
subsection (a) of Section 21.
(215 ILCS 155/19) (from Ch. 73, par. 1419)
Sec. 19. Secretary powers; pricing. Notwithstanding the
minimum fees set forth in subparagraph (F) of paragraph (18)
of subsection (a) of Section 21, nothing Nothing contained in
this Act shall be construed as giving any authority to the
Secretary to set or otherwise adjust the fees charged to the
parties to the transaction for:
(1) issuing a title insurance policy, including any
service charge or administration fee for the issuance of a

HB3701 - 27 - LRB103 29438 BMS 55829 b
title insurance policy;
(2) abstracting, searching and examining title;
(3) preparing or issuing preliminary reports, property
profiles, commitments, binders, or like product;
(4) closing fees, escrow fees, settlement fees, and
like charges.
(Source: P.A. 94-893, eff. 6-20-06.)
(215 ILCS 155/21) (from Ch. 73, par. 1421)
Sec. 21. Regulatory action.
(a) The Secretary may refuse to grant, and may suspend or
revoke, any certificate of authority, registration, or license
issued pursuant to this Act or may impose a fine for a
violation of this Act if he determines that the holder of or
applicant for such certificate, registration or license:
(1) has intentionally made a material misstatement or
fraudulent misrepresentation in relation to a matter
covered by this Act;
(2) has misappropriated or tortiously converted to its
own use, or illegally withheld, monies held in a fiduciary
capacity;
(3) has demonstrated untrustworthiness or incompetency
in transacting the business of guaranteeing titles to real
estate in such a manner as to endanger the public;
(4) has materially misrepresented the terms or
conditions of contracts or agreements to which it is a

HB3701 - 28 - LRB103 29438 BMS 55829 b
party;
(5) has paid any commissions, discounts or any part of
its premiums, fees or other charges to any person in
violation of any State or federal law or regulations or
opinion letters issued under the federal Real Estate
Settlement Procedures Act of 1974;
(6) has failed to comply with the deposit and reserve
requirements of this Act or any other requirements of this
Act;
(7) has committed fraud or misrepresentation in
applying for or procuring any certificate of authority,
registration, or license issued pursuant to this Act;
(8) has a conviction or plea of guilty or plea of nolo
contendere in this State or any other jurisdiction to (i)
any felony or (ii) a misdemeanor, an essential element of
which is dishonesty or fraud or larceny, embezzlement, or
obtaining money, property, or credit by false pretenses or
by means of a confidence game;
(9) has been disciplined by another state, the
District of Columbia, a territory, foreign nation, a
governmental agency, or any entity authorized to impose
discipline if at least one of the grounds for that
discipline is the same as or equivalent to one of the
grounds for which a title insurance company, title
insurance agent, or independent escrowee may be
disciplined under this Act or if at least one of the

HB3701 - 29 - LRB103 29438 BMS 55829 b
grounds for that discipline involves dishonesty; a
certified copy of the record of the action by the other
state or jurisdiction shall be prima facie evidence
thereof;
(10) has advertising that is inaccurate, misleading,
or contrary to the provisions of this Act;
(11) has knowingly and willfully made any substantial
misrepresentation or untruthful advertising;
(12) has made any false promises of a character likely
to influence, persuade, or induce;
(13) has knowingly failed to account for or remit any
money or documents coming into the possession of a title
insurance company, title insurance agent, or independent
escrowee that belong to others;
(14) has engaged in dishonorable, unethical, or
unprofessional conduct of a character likely to deceive,
defraud, or harm the public;
(15) has violated the terms of a disciplinary order
issued by the Department;
(16) has disregarded or violated any provision of this
Act or the published rules adopted by the Department to
enforce this Act or has aided or abetted any individual,
partnership, registered limited liability partnership,
limited liability company, or corporation in disregarding
any provision of this Act or the published rules; or
(17) has acted as a title insurance company, title

HB3701 - 30 - LRB103 29438 BMS 55829 b
insurance agent, or independent escrowee without a
certificate of authority, registration, or license after
the title insurance company, title insurance agent, or
independent escrowee's certificate of authority,
registration, or license was inoperative; or .
(18) regarding residential real property transactions:
(A) has disbursed funds before the actual delivery
of funds acceptable to the closing and settlement
services agent;
(B) has disbursed closing and settlement services
funds before all necessary conditions of the
transaction have been met;
(C) has paid for, furnished, or offered to pay for
or furnish any reward or compensation for any past,
present, or future title insurance business or closing
and settlement services or any other title business,
including, but not limited to, the payment of a fee to
an attorney for the referral of title business;
(D) has paid or offered to pay any fee to a
producer of title business for making an inspection or
appraisal of property;
(E) has received securities of the title insurance
company, title insurance agent, or independent
escrowee at prices below the normal market price or
bonds or debentures that guarantee a higher than
normal interest rate, whether or not the consummation

HB3701 - 31 - LRB103 29438 BMS 55829 b
of the transaction is directly or indirectly related
to the number of closing and settlement services or
title orders coming to the title insurance company,
title insurance agent, or independent escrowee through
the efforts of that person;
(F) has furnished to any producer of title
business or associate of a producer reports containing
publicly recorded information, appraisals, estimates
of income production potential, information kits, or
similar packages containing information about one or
more parcels of real property helpful to any producer
of title business without making a charge that is
commensurate with the actual cost of the work
performed and the material furnished; additionally:
(i) if search services subject to this Act are
provided to a title insurance agent by another
entity or individual there shall be a written
service agreement for such search services,
payment shall be made pursuant to the agreement if
the transaction closes or the policy is issued,
and any charges to a party to the transaction that
are related to such search services shall not be
duplicative of any other charges to that party;
and
(ii) if services other than search services
subject to this Act are provided to a title

HB3701 - 32 - LRB103 29438 BMS 55829 b
insurance agent by another entity or individual
there shall be a written service agreement for
such services, payment shall be made pursuant to
the agreement in a cumulative total amount no less
than set forth in items (I) and (II) of this
subdivision if the transaction closes or the
policy is issued, and any charges to a party to the
transaction that are related to such services
shall not be duplicative of any other charges to
that party:
(I) $350 for transactions with any
residential real property in the counties of
Cook, Lake, DuPage, McHenry, Kane, Will,
Grundy, and Kendall; and
(II) $175 for transactions with any
residential real property in any other county
within the State.
(G) has made or guaranteed or has offered to make
or guarantee, either directly or indirectly, any loan
to any producer of title business or associate of a
producer with terms more favorable than otherwise
available to the producer;
(H) has guaranteed or offered to guarantee the
proper performance of closing and settlement services
or undertakings that are to be performed by any
producer of title business, except as authorized

HB3701 - 33 - LRB103 29438 BMS 55829 b
pursuant to Sections 16 and 16.1;
(I) has provided or offered to provide, either
directly or indirectly, a compensating balance or
deposit in a lending institution either for the
express or implied purpose of influencing the
placement or channeling of title insurance business by
the lending institution; this paragraph does not
prohibit the maintenance by a title insurance company,
title agent, or independent escrowee of demand
deposits or escrow deposits that are reasonably
necessary for use in the ordinary course of the
business of the title insurance company, title agent,
or independent escrowee;
(J) has paid for or offered to pay for the fees or
charges of an outside professional, such as an
attorney, engineer, appraiser, or surveyor, whose
services are required by any producer of title
business to structure or complete a particular
transaction;
(K) has provided or offered to provide non-title
services, such as computerized bookkeeping, forms
management, computer programming, or any similar
benefit, without a charge that is commensurate with
the actual cost to any producer of title business or to
any associate of a producer of title business;
(L) has furnished or offered to furnish all or any

HB3701 - 34 - LRB103 29438 BMS 55829 b
part of the time or productive effort of any employee
of the title insurance company, title insurance agent,
or independent escrowee, such as an office manager,
escrow officer, secretary, clerk, or messenger, to any
producer of title business or associate of a producer
of title business;
(M) has paid for or offered to pay for all or any
part of the salary of an employee of any producer of
title business;
(N) has paid for or offered to pay for the salary
or any part of the salary of a relative of any producer
of title business if that payment is in excess of the
reasonable value of work performed by the relative on
behalf of the title insurance company, title insurance
agent, or independent escrowee;
(O) has paid for or offered to pay for services by
any producer of title business that are ordinarily to
be performed by the producer of title business in his
or her licensed capacity as a real estate or mortgage
broker, salesman, or agent;
(P) has furnished or offered to furnish or paid
for or offered to pay for furniture, office supplies,
telephones, facsimile machines, equipment, or
automobiles to any producer of title business, or has
paid for or offered to pay for any portion of the cost
of renting, leasing, operating, or maintaining any of

HB3701 - 35 - LRB103 29438 BMS 55829 b
these items;
(Q) has paid for, furnished, or waived, or offered
to pay for, furnish, or waive, all or any part of the
rent for space occupied by any producer of title
business;
(R) has rented or offered to rent space from any
producer of title business, regardless of the purpose,
at a rent that is excessive when compared with rents
for comparable space in the geographic area, or has
paid or offered to pay rent based in whole or in part
on the volume of business generated by any producer of
title business;
(S) has paid for or offered to pay for gifts,
vacations, business trips, convention expenses, travel
expenses, membership fees, registration fees, lodging,
or meals on behalf of a producer of title business,
directly or indirectly, or supplied letters of credit,
credit cards, or any such benefits;
(T) has paid for or offered to pay for the
cancellation fee for a title report or other fee on
behalf of any producer of title business either before
or after inducing the producer of title business to
cancel an order with another title insurance company,
title insurance agent, or independent escrowee;
(U) has paid for, furnished, or offered to pay for
or furnish any business form to any producer of title

HB3701 - 36 - LRB103 29438 BMS 55829 b
business, other than a form regularly used in the
conduct of the title insurance company's business,
that is furnished for the convenience of the title
insurance company and does not constitute a direct
monetary benefit to any producer of title business; or
(V) has given trading stamps, cash redemption
coupons, or similar items to any producer of title
business.
(a-1) Nothing in paragraph (18) of subsection (a) shall be
construed as prohibiting:
(1) publishing or printing and disseminating any
educational information, notwithstanding that the
information may be of benefit to a producer of title
business;
(2) distributing information, whether printed or oral,
advertising novelties, and gift items not to exceed $25 in
value that bear the name of the giver but not the name of
the recipient to producers of title business;
(3) providing reasonable promotional and educational
activities that are not conditioned on the referral of
business and that do not involve the defraying of expenses
that otherwise would be incurred by persons in a position
to refer settlement services or business incident to those
services, such as a reception by a title company, seminars
on title matters offered to professionals, furnishing
property descriptions and names of record owners without

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charge to lenders, real estate brokers, attorneys, or
others, or distribution of calendars and other promotional
material that do not exceed $25 in value;
(4) the payment of a fee:
(A) that bears a reasonable relationship to the
value of the services rendered or performed:
(i) by any person or party to attorneys at law
for services actually rendered;
(ii) by a title company to its duly appointed
agent for services actually performed in the
issuance of a policy of title insurance; or
(iii) by a lender to its duly appointed agent
for services actually performed in the making of a
loan; and
(B) to a settlement service provider for services
outside of the normal scope of that provider's
services to the parties to the transaction;
(5) the payment of a bona fide salary or compensation
or other payment for goods or facilities actually
furnished or for services actually performed, so long as
the salary, compensation, or other payment bears a
reasonable relationship to the value of the services,
goods, or facilities;
(6) proportionate returns on an ownership or franchise
interest; or
(7) ordinary and customary business entertainment or

HB3701 - 38 - LRB103 29438 BMS 55829 b
promotional activities not to exceed $200 in value per
person, per quarter of each year beginning January 1 by
title insurance companies, title insurance agents, or
independent escrowees that are not directly or indirectly
consideration as an inducement or compensation for the
referral of title business or for the referral of any
escrow or other service from a title insurance company,
title insurance agent, or independent escrowee.
(b) In every case where a registration or certificate is
suspended or revoked, or an application for a registration or
certificate or renewal thereof is refused, the Secretary shall
serve notice of his action, including a statement of the
reasons for his action, as provided by this Act. When a notice
of suspension or revocation of a certificate of authority is
given to a title insurance company, the Secretary shall also
notify all the registered agents of that title insurance
company of the Secretary's action.
(c) In the case of a refusal to issue or renew a
certificate or accept a registration, the applicant or
registrant may request in writing, within 30 days after the
date of service, a hearing. In the case of a refusal to renew,
the expiring registration or certificate shall be deemed to
continue in force until 30 days after the service of the notice
of refusal to renew, or if a hearing is requested during that
period, until a final order is entered pursuant to such
hearing.

HB3701 - 39 - LRB103 29438 BMS 55829 b
(d) The suspension or revocation of a registration or
certificate shall take effect upon service of notice thereof.
The holder of any such suspended registration or certificate
may request in writing, within 30 days of such service, a
hearing.
(e) In cases of suspension or revocation of registration
pursuant to subsection (a), the Secretary may, in the public
interest, issue an order of suspension or revocation which
shall take effect upon service of notification thereof. Such
order shall become final 60 days from the date of service
unless the registrant requests in writing, within such 60
days, a formal hearing thereon. In the event a hearing is
requested, the order shall remain temporary until a final
order is entered pursuant to such hearing.
(f) Hearing shall be held at such time and place as may be
designated by the Secretary either in the City of Springfield,
the City of Chicago, or in the county in which the principal
business office of the affected registrant or certificate
holder is located.
(g) The suspension or revocation of a registration or
certificate or the refusal to issue or renew a registration or
certificate shall not in any way limit or terminate the
responsibilities of any registrant or certificate holder
arising under any policy or contract of title insurance to
which it is a party. No new contract or policy of title
insurance may be issued, nor may any existing policy or

HB3701 - 40 - LRB103 29438 BMS 55829 b
contract to title insurance be renewed by any registrant or
certificate holder during any period of suspension or
revocation of a registration or certificate.
(h) The Secretary may issue a cease and desist order to a
title insurance company, agent, or other entity doing business
without the required license or registration, when in the
opinion of the Secretary, the company, agent, or other entity
is violating or is about to violate any provision of this Act
or any law or of any rule or condition imposed in writing by
the Department.
The Secretary may issue the cease and desist order without
notice and before a hearing.
The Secretary shall have the authority to prescribe rules
for the administration of this Section.
If it is determined that the Secretary had the authority
to issue the cease and desist order, he may issue such orders
as may be reasonably necessary to correct, eliminate or remedy
such conduct.
Any person or company subject to an order pursuant to this
Section is entitled to judicial review of the order in
accordance with the provisions of the Administrative Review
Law.
The powers vested in the Secretary by this Section are
additional to any and all other powers and remedies vested in
the Secretary by law, and nothing in this Section shall be
construed as requiring that the Secretary shall employ the

HB3701 - 41 - LRB103 29438 BMS 55829 b
powers conferred in this Section instead of or as a condition
precedent to the exercise of any other power or remedy vested
in the Secretary.
(Source: P.A. 98-398, eff. 1-1-14.)
Section 99. Effective date. This Act takes effect January
1, 2024.