Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 352 (2015GS)

Sponsor

Rep. Roberts, M.

Final action

Governor Signed 3/30/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• exempts an individual insurance producer, who is an employee of a title insurer or who is designated by an agency title insurance producer, from certain title insurance reporting requirements and assessments;
• provides a limited exemption for an individual licensed to practice law in Utah; and
• makes technical changes.

Every vote on this bill

Bill text

TITLE INSURANCE REPORTING AND ASSESSMENT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Marc K. Roberts
Senate Sponsor: 
Alvin B. Jackson
LONG TITLE
General Description:
This bill amends the Insurance Code related to title insurance reporting.
Highlighted Provisions:
This bill:
▸ exempts an individual insurance producer, who is an employee of a title insurer or
who is designated by an agency title insurance producer, from certain title insurance
reporting requirements and assessments;
▸ provides a limited exemption for an individual licensed to practice law in Utah; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-19a-209
, as last amended by Laws of Utah 2013, Chapter 319
31A-23a-203.5
, as last amended by Laws of Utah 2013, Chapter 319
31A-23a-413
, as last amended by Laws of Utah 2013, Chapter 319
31A-23a-415
, as last amended by Laws of Utah 2013, Chapter 319
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-19a-209
 is amended to read:
31A-19a-209.
Special provisions for title insurance.
(1) (a) (i) The Title and Escrow Commission shall adopt rules subject to Section
31A-2-404
, establishing rate standards and rating methods for individual title insurance
producers and agency title insurance producers.
(ii) The commissioner shall determine compliance with rate standards and rating
methods for title [
insurance
] insurers, individual title insurance producers, and agency title
insurance producers.
(b) In addition to the considerations in determining compliance with rate standards and
rating methods as set forth in Sections 
31A-19a-201
 and 
31A-19a-202
, including for title
insurers, the commissioner and the Title and Escrow Commission shall consider the costs and
expenses incurred by title [
insurance
] insurers, individual title insurance producers, and agency
title insurance producers peculiar to the business of title insurance including:
(i) the maintenance of title plants; and
(ii) the searching and examining of public records to determine insurability of title to
real redevelopment property.
(2) (a) [
Every
] 
A
 title [
insurance
] insurer [
or
]
, an
 agency title insurance producer, [
and
every
] 
or an
 individual title insurance producer who is not 
an employee of a title insurer or who
is not
 designated by an agency title insurance producer[
,
] shall file with the commissioner:
(i) a schedule of the escrow charges that the title [
insurance
] insurer, individual title
insurance producer, or agency title insurance producer proposes to use in this state for services
performed in connection with the issuance of policies of title insurance; and
(ii) any changes to the schedule of the escrow charges described in Subsection (2)(a)(i).
(b) Except for a schedule filed by a title [
insurance
] insurer under this Subsection (2), a
schedule filed under this Subsection (2) is subject to review by the Title and Escrow
Commission.
(c) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i) takes
effect on the day on which the schedule of escrow charges is filed.
(ii) Any changes to the schedule of the escrow charges required to be filed by
Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
charges except that the effective date may not be less than 30 calendar days after the day on
which the change to the schedule of escrow charges is filed.
(3) A title [
insurance
] insurer, individual title insurance producer, or agency title
insurance producer may not file or use any rate or other charge relating to the business of title
insurance, including rates or charges filed for escrow that would cause the title insurance
company, individual title insurance producer, or agency title insurance producer to:
(a) operate at less than the cost of doing:
(i) the insurance business; or
(ii) the escrow business; or
(b) fail to adequately underwrite a title insurance policy.
(4) (a) All or any of the schedule of rates or schedule of charges, including the schedule
of escrow charges, may be changed or amended at any time, subject to the limitations in this
Subsection (4).
(b) Each change or amendment shall:
(i) be filed with the commissioner, subject to review by the Title and Escrow
Commission; and
(ii) state the effective date of the change or amendment, which may not be less than 30
calendar days after the day on which the change or amendment is filed.
(c) Any change or amendment remains in force for a period of at least 90 calendar days
from the change or amendment's effective date.
(5) While the schedule of rates and schedule of charges are effective, a copy of each
shall be:
(a) retained in each of the offices of:
(i) the title [
insurance
] insurer in this state;
(ii) the title [
insurance
] insurer's individual title insurance producers or agency title
insurance producers in this state; and
(b) upon request, furnished to the public.
(6) Except in accordance with the schedules of rates and charges filed with the
commissioner, a title [
insurance
] insurer, individual title insurance producer, or agency title
insurance producer may not make or impose any premium or other charge:
(a) in connection with the issuance of a policy of title insurance; or
(b) for escrow services performed in connection with the issuance of a policy of title
insurance.
Section 2. Section 
31A-23a-203.5
 is amended to read:
31A-23a-203.5.
Errors and omissions coverage requirements.
(1) In accordance with this section, a resident individual producer shall ensure that the
resident individual producer is covered:
(a) for the legal liability of the resident individual producer as the result of an
erroneous act or failure to act in the resident individual producer's capacity as a producer; and
(b) at all times during the term of the resident individual producer's license.
(2) The coverage required by Subsection (1) shall consist of:
(a) a policy naming the resident individual producer;
(b) a policy naming the agency that designates the resident individual producer in
accordance with this chapter; or
(c) a written agreement by an insurer or group of affiliated insurers, on behalf of a
resident individual producer who is or will become an exclusive agent of the insurer or group
of affiliated insurers, under which the insurer or group of affiliated insurers agrees to assume
responsibility, to the benefit of an aggrieved person, for legal liability of the resident individual
producer as the result of an erroneous act or failure to act in the resident individual producer's
capacity as a producer for the insurer or group of affiliated insurers.
(3) The commissioner may, by rule made in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, provide for:
(a) the terms and conditions of the coverage required under Subsection (1); and
(b) if the coverage required by Subsection (1) is terminated during a resident individual
producer's license term, requirements to:
(i) provide notice; and
(ii) replace the coverage.
(4) An individual title insurance producer is considered to be in compliance with this
section when:
(a) the individual title insurance producer 
who
 is not designated by an agency title
producer [
and
] maintains the individual title insurance producer's own bond, policy, or other
financial protection in accordance with Subsection 
31A-23a-204
(2); [
or
]
(b) the individual title insurance producer is designated by an agency title insurance
producer that maintains a bond, policy, or other financial protection in accordance with
Subsection 
31A-23a-204
(2)[
.
]
; or
(c) the individual title insurance producer is an employee of and is appointed by a title
insurer.
(5) Notwithstanding the other provisions of this section, a resident individual producer
is exempt from the requirement to maintain coverage as provided in this section during a
period in which the resident individual producer is not either:
(a) appointed by an insurer under this title; or
(b) designated by an agency under this title.
(6) A limited lines producer is exempt from this section.
Section 3. Section 
31A-23a-413
 is amended to read:
31A-23a-413.
Title insurance producer's annual report.
An agency title insurance producer and an individual title insurance producer who 
is not
an employee of a title insurer or who
 has not been designated by an agency title insurance
producer shall annually file with the commissioner, by a date and in a form the commissioner
specifies by rule, a verified statement of the agency title insurance producer's or individual title
insurance producer's financial condition, transactions, and affairs as of the end of the preceding
calendar year.
Section 4. Section 
31A-23a-415
 is amended to read:
31A-23a-415.
Assessment on agency title insurance producers or title insurers --
Account created.
(1) For purposes of this section:
(a) "Premium" is as defined in Subsection 
59-9-101
(3).
(b) "Title insurer" means a person:
(i) making any contract or policy of title insurance as:
(A) insurer;
(B) guarantor; or
(C) surety;
(ii) proposing to make any contract or policy of title insurance as:
(A) insurer;
(B) guarantor; or
(C) surety; or
(iii) transacting or proposing to transact any phase of title insurance, including:
(A) soliciting;
(B) negotiating preliminary to execution;
(C) executing of a contract of title insurance;
(D) insuring; and
(E) transacting matters subsequent to the execution of the contract and arising out of
the contract.
(c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
personal property located in Utah, an owner of real or personal property, the holders of liens or
encumbrances on that property, or others interested in the property against loss or damage
suffered by reason of:
(i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
property; or
(ii) invalidity or unenforceability of any liens or encumbrances on the property.
(2) (a) The commissioner may assess each title insurer, each individual title insurance
producer who 
is not an employee of a title insurer or who
 is not designated by an agency title
insurance producer, and each agency title insurance producer an annual assessment:
(i) determined by the Title and Escrow Commission:
(A) after consultation with the commissioner; and
(B) in accordance with this Subsection (2); and
(ii) to be used for the purposes described in Subsection (3).
(b) An agency title insurance producer and individual title insurance producer who is
not 
an employee of a title insurer or who is not
 designated by an agency title insurance
producer shall be assessed up to:
(i) $250 for the first office in each county in which the agency title insurance producer
or individual title insurance producer maintains an office; and
(ii) $150 for each additional office the agency title insurance producer or individual
title insurance producer maintains in the county described in Subsection (2)(b)(i).
(c) A title insurer shall be assessed up to:
(i) $250 for the first office in each county in which the title insurer maintains an office;
(ii) $150 for each additional office the title insurer maintains in the county described in
Subsection (2)(c)(i); and
(iii) an amount calculated by:
(A) aggregating the assessments imposed on:
(I) agency title insurance producers and individual title insurance producers under
Subsection (2)(b); and
(II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
(B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
costs and expenses determined under Subsection (2)(d); and
(C) multiplying:
(I) the amount calculated under Subsection (2)(c)(iii)(B); and
(II) the percentage of total premiums for title insurance on Utah risk that are premiums
of the title insurer.
(d) Notwithstanding Section 
31A-3-103
 and subject to Section 
31A-2-404
, the Title
and Escrow Commission by rule shall establish the amount of costs and expenses described
under Subsection (3) that will be covered by the assessment, except the costs or expenses to be
covered by the assessment may not exceed $80,000 annually.
(e) (i) An individual licensed to practice law in Utah is exempt from the requirements
of this Subsection (2) if that person issues 12 or less policies during a 12-month period.
(ii) In determining the number of policies issued by an individual licensed to practice
law in Utah for purposes of Subsection (2)(e)(i), if the individual issues a policy to more than
one party to the same closing, the individual is considered to have issued only one policy.
(3) (a) Money received by the state under this section shall be deposited into the Title
Licensee Enforcement Restricted Account.
(b) There is created in the General Fund a restricted account known as the "Title
Licensee Enforcement Restricted Account."
(c) The Title Licensee Enforcement Restricted Account shall consist of the money
received by the state under this section.
(d) The commissioner shall administer the Title Licensee Enforcement Restricted
Account. Subject to appropriations by the Legislature, the commissioner shall use the money
deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
expense incurred by the department in the administration, investigation, and enforcement of
this part and Part 5, Compensation of Producers and Consultants, related to:
(i) the marketing of title insurance; and
(ii) audits of agency title insurance producers.
(e) An appropriation from the Title Licensee Enforcement Restricted Account is
nonlapsing.
(4) The assessment imposed by this section shall be in addition to any premium
assessment imposed under Subsection 
59-9-101
(3).