TO:
All Delaware Agents
FROM:
Kate Blake-Endicott
DATE:
September 27, 2011
SUBJECT:
Elimination of
Creditor’s Rights Coverage
This Bulletin supersedes all
previous Bulletins pertaining to Creditor’s
Rights Risk.
Effective immediately,
Creditor’s Rights coverage, whether in the form
of a specific endorsement
or in the use of a 1970
Policy or any similar Policy that provides
creditor’s rights coverage for the
current transaction, is
hereby eliminated. This action is being taken as
a result of the recent
addition of Section 2502-006
to the Texas Insurance Code which prohibits a
title insurance
company
from doing business in Texas if that title insurance company
provides current
transaction creditor’s rights coverage to a
named insured anywhere in the
United States.
The only
exception to this prohibition
is if the laws of a given state require that
such coverage be given and
in those cases, approval of
the Corporate Legal Department is required.
If the use of a 1970 Policy
or any similar Policy that provides creditor’s
rights coverage for the
current transaction is
authorized, then the following separate
exception must be taken in Schedule B:
Any claim, which arises out
of the transaction creating the interest insured
by this policy by
reason of the operation of
federal bankruptcy, state insolvency, or similar
creditors' rights laws.
Any questions concerning this
issue should be referred to the Corporate Legal
Department.
