Bill Text: IL HB5824 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Title Insurance Act. Excludes a limited liability company from the requirement that every title insurance agent registration applicant must be 18 years or more of age. Provides that included in every application for registration of a title insurance agent, including a firm, partnership, association, limited liability company, or 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. Provides that no person who has had a conviction or pled guilty to any felony or misdemeanor involving theft or dishonesty may be registered by a title insurance company, and no such person may serve as an owner, officer, director, principal, or manager of any registered title insurance agent. Includes additional factors whereby the Secretary of Financial and Professional Regulation may refuse to grant or may suspend or revoke any certificate of authority, registration, or license issued pursuant to the Act or impose a fine for a violation of the Act. Effective January 1, 2013.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB5824 Detail]

Download: Illinois-2011-HB5824-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB5824 Introduced 2/16/2012, by Rep. Linda Chapa LaVia SYNOPSIS AS INTRODUCED:
215 ILCS 155/16 from Ch. 73, par. 1416
215 ILCS 155/21 from Ch. 73, par. 1421
Amends the Title Insurance Act. Excludes a limited liability company from the requirement that every title insurance agent registration applicant must be 18 years or more of age. Provides that included in every application for registration of a title insurance agent, including a firm, partnership, association, limited liability company, or 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. Provides that no person who has had a conviction or pled guilty to any felony or misdemeanor involving theft or dishonesty may be registered by a title insurance company, and no such person may serve as an owner, officer, director, principal, or manager of any registered title insurance agent. Includes additional factors whereby the Secretary of Financial and Professional Regulation may refuse to grant or may suspend or revoke any certificate of authority, registration, or license issued pursuant to the Act or impose a fine for a violation of the Act. Effective January 1, 2013.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning insurance.
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 16 and 21 as follows:
(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 duly registered by a title
insurance company with the Secretary.
(b) Each application for registration shall be made on a
form specified by the Secretary and prepared in duplicate by
each title insurance company which the agent represents. The
title insurance company shall retain the copy of the
application and forward the original to the Secretary with the
appropriate fee.
(c) Every applicant for registration, except a firm,
partnership, association, limited liability company, or
corporation, must be 18 years or more of age. Included in every
application for registration of a title insurance agent,
including a firm, partnership, association, limited liability
company, or corporation, shall be an affidavit of the applicant

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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. No
person who has had a conviction or pled guilty to any felony or
misdemeanor involving theft or dishonesty may be registered by
a title insurance company, and no such person may serve as an
owner, officer, director, principal, or manager of any
registered title insurance agent.
(d) Registration shall be made annually by a filing with
the Secretary; supplemental registrations for new title
insurance agents to be added between annual filings shall be
made from time to time in the manner provided by the Secretary;
registrations shall remain in effect unless revoked or
suspended by the Secretary or voluntarily withdrawn by the
registrant or the 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

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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.
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

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forth in subsection (g) of this Section, authorizes the 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

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letter. The liability, if any, of the title 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.
(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.
(Source: P.A. 96-1454, eff. 1-1-11.)
(215 ILCS 155/21) (from Ch. 73, par. 1421)

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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
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; or
(6) has failed to comply with the deposit and reserve
requirements of this Act or any other requirements of this
Act; .

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(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 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;

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(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
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.
(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

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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.
(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

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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
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

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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
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. 94-893, eff. 6-20-06.)
Section 99. Effective date. This Act takes effect January
1, 2013.