Bill Text: IN SB0370 | 2013 | Regular Session | Engrossed
Bill Title: Title insurance.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2013-05-13 - Public Law 80 [SB0370 Detail]
Download: Indiana-2013-SB0370-Engrossed.html
Citations Affected: IC 27-1; IC 27-7.
Synopsis: Title insurance. Specifies requirements related to title
insurance policy filings and closing protection letter issuance.
Effective: July 1, 2013.
(HOUSE SPONSORS _ LEHMAN, DELANEY, KLINKER, BRAUN)
January 8, 2013, read first time and referred to Committee on Insurance.
February 7, 2013, reported favorably _ Do Pass.
February 12, 2013, read second time, ordered engrossed.
February 13, 2013, engrossed.
February 19, 2013, read third time, passed. Yeas 46, nays 3.
March 12, 2013, read first time and referred to Committee on Insurance.
March 21, 2013, amended, reported _ Do Pass.
March 28, 2013, read second time, amended, ordered engrossed.
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A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
(1) reinsurance, other than joint reinsurance to the extent stated in section 14 of this chapter;
(2) accident and health insurance;
(3) insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies;
(4) insurance against loss or damage to aircraft or against liability arising out of the ownership, maintenance, or use of aircraft; and
(5) worker's compensation insurance.
(b) Inland marine insurance includes insurance defined by statute, or by interpretation of statute, or if not so defined or interpreted, by ruling of the commissioner of insurance (referred to as the commissioner), or as established by general custom of the business, as inland marine insurance.
(b) The definitions in IC 27-7-3 apply throughout this section.
(c) For purposes of this section, "form", when used in reference to a title policy:
(1) includes:
(A) a commitment for title insurance and a title policy or guaranty; and
(B) the terms and conditions of the title insurance or title policy or guaranty; and
(2) excludes:
(A) a reinsurance contract or agreement;
(B) an exception:
(i) that is included in a commitment or title policy; and
(ii) for specific defects in a title that may be ascertained from an examination of a specific risk;
(C) an affirmative assurance of a company, through endorsement or otherwise, with respect to a defect described in clause (B); and
(D) any other exception from coverage due to:
(i) a limitation on the examination of the risk imposed by a particular applicant for title insurance; or
(ii) failure of a particular applicant for title insurance to provide the data necessary for determination of insurability.
(d) A company doing business in Indiana shall, at least thirty (30) days before the proposed effective date of the filing, file with the commissioner all of the following that the company proposes to use, including the proposed effective date and an indication of the character and extent of the coverage contemplated:
(1) The form of a title policy, endorsement, manual, rating schedule or rating plan, and other rating rule.
(2) A modification of any filing described in subdivision (1).
If the commissioner does not, within a thirty (30) day waiting period beginning on the date of filing, disapprove a filing made under this subsection, the filing is considered approved.
(e) If a company is a member of or a subscriber to a rating organization that is licensed under section 8 of this chapter, the filing requirement of subsection (d) may be satisfied by a filing made:
(1) by the rating organization; and
(2) on behalf of all of the rating organization's members and subscribers;
in accordance with subsection (f).
(f) A rating organization that makes a filing described in subsection (e) shall, at least thirty (30) days before the proposed effective date of the filing, file with the commissioner for review and approval or disapproval all of the following that the company proposes to use, including the proposed effective date and an indication of the character and extent of the coverage contemplated:
(1) The form of a title policy, endorsement, manual, rating schedule or rating plan, and other rating rule.
(2) A modification of any filing described in subdivision (1).
(g) The commissioner shall, within a thirty (30) day waiting period beginning on the date of filing, approve or disapprove a filing made under subsection (f). However, the commissioner may do the following:
(1) Upon written notice to the rating organization making the filing within the initial thirty (30) day period, extend the waiting period for not more than an additional thirty (30) days to enable the commissioner to complete the review of the filing.
(2) With the consent of the rating organization making the filing, extend the waiting period for additional thirty (30) day periods.
(3) Upon receiving a written request by the rating organization making the filing, approve the filing or a part of the filing that the commissioner has reviewed to become effective before the expiration of a waiting period described in subdivision (1) or (2).
(h) If the commissioner, during a waiting period described in subsection (g), determines that a filing made by a rating organization under this section:
(1) meets the requirements of this chapter, the commissioner
shall approve the filing and send to the rating organization
written notice of the approval; or
(2) does not meet the requirements of this chapter, the
commissioner shall disapprove the filing and send to the
rating organization written notice of the disapproval,
including the following:
(A) The notice must specify the manner in which the filing
does not meet the requirements of this chapter.
(B) The notice must specify that the filing will not become
effective.
(i) If the commissioner, at any time after approval under
subsection (d), (g), or (h), determines that the filing does not
comply with this chapter, the commissioner shall, after a hearing
held on ten (10) days written notice:
(1) sent to the person making the filing; and
(2) specifying the matters to be considered at the hearing;
issue an order specifying the manner in which the filing does not
comply with this chapter and the date on which the filing will no
longer be effective.
(j) The commissioner shall send a copy of an order issued under
subsection (i) to the person making the filing. The order does not
affect a title policy made or issued before the date specified in the
order on which the filing is no longer effective.
(k) The commissioner may not disapprove a filing described in
subsection (d) or (f) if the rates produced by the filing comply with
this chapter.
(l) A rating organization that receives notice of a hearing or a
copy of an order under subsection (i) shall promptly notify all of
the rating organization's members or subscribers that would be
affected by the hearing or order. For purposes of subsection (i),
notice to a rating organization is considered to be notice to the
rating organization's members or subscribers.
(m) If:
(1) a filing is not accompanied by the information on which
the filing is based; and
(2) the commissioner does not have sufficient information to
determine whether the filing complies with this chapter;
the commissioner shall require the person making the filing to
furnish to the commissioner the information on which the filing is
based, and the waiting period described in subsection (d) or (g)
begins on the date on which all required information is received by
the commissioner.
(n) Information furnished under subsection (m) may include the following:
(1) The experience or judgment of the company or the rating organization making the filing.
(2) The company's or rating organization's interpretation of any statistical data relied on by the company or rating organization.
(3) The experience of other title insurance companies or rating organizations.
(4) Any other factor that the commissioner considers relevant.
(o) After approval of a filing under subsection (d), (g), or (h), the filing and information furnished in support of the filing is a public record for purposes of IC 5-14-3.
(a) The term "title insurance" means a contract of insurance against loss or damage on account of encumbrances upon or defects in the title to real estate.
(b) The term "closing protection letter" means a written indemnification of or undertaking to a party to a real estate transaction by a principal that specifies the extent to which the principal is responsible for intentional or unintentional misconduct or errors of an agent of the principal in connection with the closing of the real estate transaction.
(g) The term "title policy" means a policy issued by a company that:
(1) is authorized to do business as a title insurance company under section 3 of this chapter; and
(2) insures or indemnifies persons with an interest in real property against loss or damage caused by a lien on, an encumbrance on, a defect in, or the unmarketability of the title to the real property.
the public records sufficient to determine:
(1) ownership of;
(2) encumbrances on;
(3) liens on; and
(4) defects in the title to;
the real estate that is the subject of the search.
(1) a title policy is issued by a company or title insurance producer on behalf of a company; and
(2) the company or title insurance producer will also act as a settlement or closing agent;
the company or title insurance producer shall issue a closing protection letter to the lender, borrower, buyer, and seller of the property. A company authorized to do business under section 3 of this chapter shall charge a fee approved under subsection (e) to each party receiving the benefit of a closing protection letter.
(b) In a nonresidential real estate transaction in which:
(1) a title policy is issued by a company or title insurance producer on behalf of a company; and
(2) the company or title insurance producer will also act as a settlement or closing agent;
the company or title insurance producer may issue a closing protection letter to the lender, borrower, buyer, and seller of the property on request.
(c) A closing protection letter issued under this section must indemnify the party to which the closing protection letter is issued against any loss of settlement funds (under the terms and conditions of the closing protection letter) that results from the following acts of the company or title insurance producer that issues the closing protection letter:
(1) Theft or misappropriation of settlement funds in connection with a transaction in which the title policy is issued, only to the extent that the theft or misappropriation relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the mortgage on;
the party's interest in land.
(2) Failure to comply with the written closing instructions
agreed to by the company or title insurance producer acting
as the settlement agent, only to the extent that the failure
relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the
mortgage on;
the party's interest in land.
(d) The issuance of a closing protection letter under this section
in contemplation of or in conjunction with the issuance of a title
insurance policy is part of the business of title insurance for
purposes of section 3 of this chapter.
(e) The amount of the fee that a company authorized to do
business under section 3 of this chapter charges to each party
receiving the benefits of a closing protection letter:
(1) must be submitted to and approved by the commissioner
under IC 27-1-22-28; and
(2) is not subject to an agreement requiring a division of fees
or premiums collected on behalf of the company.
