Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 151 Third Substitute (2024GS)

Sponsor

Sen. Bramble, C.

Final action

Governor Signed 3/13/2024

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• establishes minimum net worth requirements for agency insurance producers.

Every vote on this bill

Bill text

TITLE COMPANY DISCLOSURE REQUIREMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Curtis S. Bramble
House Sponsor: 
Kera Birkeland
LONG TITLE
Committee Note:
The Administrative Rules Review and General Oversight Committee recommended this
bill.
Legislative Vote: 7 voting for 0 voting against 3 absent
General Description:
This bill addresses requirements for the net worth of agency insurance producers.
Highlighted Provisions:
This bill:
▸ establishes minimum net worth requirements for agency insurance producers.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-23a-204
, as last amended by Laws of Utah 2015, Chapter 330
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-23a-204
 is amended to read:
31A-23a-204.
Special requirements for title insurance producers and agencies.
An individual title insurance producer or agency title insurance producer shall be
licensed in accordance with this chapter, with the additional requirements listed in this section.
(1) (a) A person that receives a new license under this title as an agency title insurance
producer shall at the time of licensure be owned or managed by at least one individual who is
licensed for at least three of the five years immediately preceding the date on which the agency
title insurance producer applies for a license with both:
(i) a title examination line of authority; and
(ii) an escrow line of authority.
(b) An agency title insurance producer subject to Subsection (1)(a) may comply with
Subsection (1)(a) by having the agency title insurance producer owned or managed by:
(i) one or more individuals who are licensed with the title examination line of authority
for the time period provided in Subsection (1)(a); and
(ii) one or more individuals who are licensed with the escrow line of authority for the
time period provided in Subsection (1)(a).
(c) A person licensed as an agency title insurance producer shall at all times during the
term of licensure be owned or managed by at least one individual who is licensed for at least
three years within the preceding five-year period with both:
(i) a title examination line of authority; and
(ii) an escrow line of authority.
(d) The Title and Escrow Commission may by rule, subject to Section 
31A-2-404
,
exempt an attorney with real estate experience from the experience requirements in Subsection
(1)(a).
(e) An individual who satisfies the requirements of this Subsection (1) is known as a
"qualifying licensee." At any given time, an individual may be a qualifying licensee for not
more than two agency title insurance producers.
(2) (a) An individual title insurance producer or agency title insurance producer
appointed by an insurer shall maintain:
(i) a fidelity bond;
(ii) a professional liability insurance policy; or
(iii) a financial protection:
(A) equivalent to that described in Subsection (2)(a)(i) or (ii); and
(B) that the commissioner considers adequate.
(b) The bond, insurance, or financial protection required by this Subsection (2):
(i) shall be supplied under a contract approved by the commissioner to provide
protection against the improper performance of any service in conjunction with the issuance of
a contract or policy of title insurance; and
(ii) be in a face amount no less than $250,000.
(c) The Title and Escrow Commission may by rule, subject to Section 
31A-2-404
,
exempt individual title insurance producer or agency title insurance producers from the
requirements of this Subsection (2) upon a finding that, and only so long as, the required policy
or bond is generally unavailable at reasonable rates.
(3) An individual title insurance producer or agency title insurance producer appointed
by an insurer may maintain a reserve fund to the extent money was deposited before July 1,
2008, and not withdrawn to the income of the individual title insurance producer or agency title
insurance producer.
(4) An examination for licensure shall include questions regarding the examination of
title to real property.
(5) An individual title insurance producer may not perform the functions of escrow
unless the individual title insurance producer has been examined on the fiduciary duties and
procedures involved in those functions.
(6) The Title and Escrow Commission may adopt rules, establishing an examination
for a license that will satisfy this section, subject to Section 
31A-2-404
, and after consulting
with the commissioner's test administrator.
(7) A license may be issued to an individual title insurance producer or agency title
insurance producer who has qualified:
(a) to perform only examinations of title as specified in Subsection (4);
(b) to handle only escrow arrangements as specified in Subsection (5); or
(c) to act as a title marketing representative.
(8) (a) A person licensed to practice law in Utah is exempt from the requirements of
Subsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
(b) In determining the number of policies issued by a person licensed to practice law in
Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues a
policy to more than one party to the same closing, the person is considered to have issued only
one policy.
(9) A person licensed to practice law in Utah, whether exempt under Subsection (8) or
not, shall maintain a trust account separate from a law firm trust account for all title and real
estate escrow transactions.
(10) An agency title insurance producer that is not part of an affiliated business
arrangement, as defined in Section 
31A-23a-1001
, shall comply with the following net worth
requirements:
(a) an agency title insurance producer licensed on or after May 14, 2019, shall maintain
a net worth of at least:
(i) $100,000 for the first five years after becoming licensed; and
(ii) after the first five years after becoming licensed, the greater of:
(A) a yearly average net worth of $50,000; or
(B) based on a determination made on February 1 of each year, an amount equal to 5%
of the agency title insurance producer's average annual gross revenue over the preceding two
calendar years, up to $150,000; or
(b) an agency title insurance producer licensed before May 14, 2019, shall:
(i) beginning on February 1, 2025, and ending on January 31, 2029, maintain a net
worth of at least the lesser of:
(A) a yearly average net worth of $150,000; or
(B) based on a determination made on February 1 of each year, an amount equal to 5%
of the agency title insurance producer's average annual gross revenue over the preceding two
calendar years, up to $150,000; and
(ii) beginning on February 1, 2029, maintain a net worth of at least the greater of:
(A) a yearly average net worth of $50,000; or
(B) based on a determination made on February 1 of each year, an amount equal to 5%
of the title entity's average annual gross revenue over the preceding two calendar years, up to
$150,000.
Section 2. 
Effective date.
This bill takes effect on May 1, 2024.