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Order Issued for the 2006
Hearing
The Commissioner of
Insurance has issued his Order
for the 2006 Hearing which adopted most of the
pending items and disapproved eight of the
items proposed on the Agenda for consideration.
To view
the complete Order, click
here.
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Summary of Agenda Items
Disapproved and Not
Adopted
The Agenda
Items
disapprovedand not adopted are:
2006-11; 2006-13; 2006-23; 2006-25; 2006-28; 2006-37; 2006-44 (Specific
Areas and Procedures 5); and, 2006-64.
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Special
Mention: Agenda Item
2006-44
One of the Agenda
Items that was disapproved deserves special
mention.
Agenda Item
2006-44 (Specific Areas and
Procedures 5) proposed
changes to allow tax search
services to be passed through as a
fee to the consumer. The Department of Insurance
recognized the many benefits
obtained by using a tax search service but refused to
adopt the proposal saying,
"...tax search services have always been
considered to be part of overhead and that a fee
for such services is not enumerated as a consumer
pass-through fee in the language of the current
Specific Areas and Procedures 5
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Summary of Agenda Items
Withdrawn
TheAgenda Items that were
withdrawn are:
2006-41; 2006-52; 2006-53; 2006-54; 2006-62; 2006-63; 2006-66; and, 2006-67.
Brief Review of All Agenda Items
Unless a different date is
specified in the Order, the Agenda Items
approved and
adopted by the Commissioner
are
effective May 1,
2008.
A brief review of each Agenda
Item follows:
- Agenda Item
2006-1
Co-Insurance Endorsement Form
T-48
This item creates a new
Endorsement Form to accommodate
commercial lenders. This allows a title insurer to
co-insure a portion of the policy
liability with one or
more additional title insurers.
- Agenda Item
2006-2
Amendment of P-6
P-6 is amended to allow a
Co-Insurer to issue the Co-Insurance
Endorsement and allow a
Co-Insurer to issue a Co-Insurance
Endorsement to another title insurer's policy when the transaction
exceeds $15 million.
- Agenda Item
2006-3
New T-00 Form
The T-00 in current use
is repealed and a new form is adopted
to organize the information in a manner that
helps the Underwriter
report the information to the
Department.
You
may view the new form
by clicking
here.
- Agenda Item
2006-4
Manufactured Housing Unit
Endorsement
Form T-31.1
The existing form is
amended to include coverage against a UCC
or other personal property lien filed
against the manufactured housing unit. It also
insures that the insured
mortgage may be foreclosed on in a
single foreclosure proceeding.
Underwriting
Guideline: You must conduct a UCC search in your
county real property records and the Secretary of
State's Office.
- Agenda Item
2006-5
Future Advance/Revolving Credit
Endorsement
Form T-35
This Endorsement amends
the existing form to change the name of
the form and expand coverage
to the lender to be more in line
with the ALTA form of endorsement.
To view
the form, click
here.
- Agenda Item
2006-6
Residential Property Affidavit Form
T-47
The current form has been
amended to remove the requirement
that the name of a specific
title company be inserted so that the
affidavit could be
executed at the time of the listing of
the property for sale; or at
the time the Earnest Money Contract is
signed.
To
view the form, click
here.
- Agenda Item
2006-7
1031 Qualified Intermediary
A new procedural rule
P-63 was created to put the procedural parts of R-2(d)
into its own procedural rule. The
new P-63 sets out
wording to be used on a Sec. 1031
Exchange transaction in describing the
name of the insured in Schedule A of the Owner's
policy.
To view
the new rule, click
here.
- Agenda Item
2006-8
Subordinate Liens and Leases
This item creates new
procedural rule P-64 to instruct title companies how to
itemize subordinate liens and leases
when requested to
do so in writing by the Insured.
Previously, the instructions
were set out in P-11b(8).
To review the new rule, click here.
- Agenda Item
2006-9
Owner Policy Required
This new procedural rule
P-65 requires the title insurance company
to issue an Owner policy on a residential
transaction whenever a
Mortgagee policy is issued. The
person acquiring title may
reject the issuance of an Owner
policy by executing the Owner Policy Rejection
Form (T-56).
- Agenda Item
2006-10
Amount of Insurance (Policy
Amount)
This item creates a new
procedural rule P-66 which pulls into one rule the procedures used to
determine the amount of premium due for
Owner and Mortgagee policies. These procedures were previously contained in
other rate and procedural rules.
- Agenda Item
2006-11 Disapproved
Agenda Item
2006-12 Name
of Insured on Loan Policy or
Commitment
Lenders have continually
requested various wording be added
to either their policies or commitments such as
"successors and assigns". Bulletin 157 previously
addressed this issue. Procedural Rule P-7 has been
amended to incorporate Bulletin 157
and to make it clear that
only the promulgated wording may be
used. It also clarifies that no such
wording can
be inserted in an Owner policy, any
Endorsement
or a Loan Title Policy
Binder on Interim Construction
Loan.
Procedural Rule 21 was amended to make the terms
used in the rule
consistent with
language in the Insurance Code and to
update references
to the Commissioner of Insurance.
- Agenda Item
2006-15 Continuing
Education Requirements
Procedural Rule 25 was amended to remove the
requirement that a company owning
multiple title companies make multiple course submissions
and/or assignments between the related
title insurance company providers.
The procedural rule for Reverse Mortgages, P-45, was
amended to comply with
federal requirements regarding the Maximum Claim Amount
and to allow the
amount of insurance to be determined by
lenders through lender estimates.
This item is combined
with Item 2006-42 and removes the Sunset
Provision contained in the rule.
- Agenda Item
2006-18 Previously
Withdrawn
- Agenda Item
2006-19 Expiration
Notice to Agent
Parts of Administrative
Rule L-1, IV, A have been amended to require the
Department of Insurance to send written notice
of Agent License
Renewal to each agent at least 45 days prior
to the expiration
date of the license.
This item amends the
Minimum Standards for Trust Funds language
to clarify that maintaining a policy guaranty fee escrow
account and a guaranty assessment recoupment
charge escrow account separate from the
agent's standard escrow account is optional.
- Agenda Item
2006-23 Disapproved
- Agenda Item
2006-24 Owner
Policy Form
T-1
Owner Policy of Title Insurance has been
renamed to Owner's Policy of
Title Insurance (T-1) and other changes in language were
made to resemble the ALTA 2006 Owner's
policy. The new form
will allow the use of the street address
of the insured property for reference only.
It is not insured as correct.
To
view the new form, click
here.
- Agenda Item
2006-25 Disapproved
- Agenda Item
2006-26 Loan
Policy of Title Insurance Form T-2
This item as adopted renames the Mortgagee Policy of Title
Insurance to Loan Policy of Title Insurance
(T-2) and makes other changes to track
language in the ALTA 2006 Loan
Policy. The new form
also allows insertion of the street
address for reference
only as well as the Loan Number.
It allows the use of the box
check manner of incorporating by
reference requested Endorsements. It also allows the deletion of certain
areas and boundaries language by
checking a box as well as deleting the appropriate
portion of the tax exception.
To
view the new form, click
here.
Procedural Rule 1 was amended to rename Owner Policy to Owner's
Policy and Mortgagee Policy to Loan
Policy. The amendments also
change the names of these
policies wherever the old names have
been previously used or adopted including all rules and
forms in the Basic Manual of Title
Insurance.
This item amends P-32 to
clarify the time periods for the
retention of documents and to conform to UETA and E-Sign
for electronically produced or scanned documents.
~Evidence of Insurability
to be retained for 15
years
~Escrow Accounting
documentation to be retained for 3
years
~Title Insurance Policies
to be retained
indefinitely.
- Agenda Item
2006-30 P-36
Arbitration Provision
P-36 was changed to
conform to changes to the policy
forms. It also increases the threshold
amount for arbitration to
$2,000,000.
- Agenda Item
2006-31 Right
of Access (P-37)
P-37 was amended to set
out the language to be used when excepting to a lack of a right of
access in a policy.
To
view the new language, click
here.
- Agenda Item
2006-32 Facultative
Reinsurance Agreement Form T-18.1
This agenda item amends
T-18.1 to conform to changes in the
ALTA Facultative Reinsurance
Agreement.
- Agenda Item
2006-33 Restrictions,
Encroachments, Minerals
Endorsement
Form T-19
This item conforms the
T-19 to the ALTA form of endorsement and
to the amended
T-2. Underwriting guidelines for this
endorsement remain the same.
The premium charge remains the same.
To see the
revised form, click
here.
- Agenda Item
2006-34 Restrictions,
Encroachments, Minerals
Endorsement
Form T-19.1
This agenda item conforms
the T-19.1 to the ALTA form of endorsement
and to the amended
form of the Owner's Policy (T-1).
Underwriting guidelines
for the issuance of this endorsement remain the
same. The premium charge remains
the same.
To view
the revised form, click
here.
- Agenda Item
2006-35 Tertiary
Facultative Reinsurance Agreement-Type
I
Form T-21.1
Agenda item 2006-35 amends the existing Tertiary
Facultative Reinsurance Agreement to
conform to
the amendments to the
Facultative Reinsurance Agreement Form
T-18.1.
- Agenda Item
2006-36
Tertiary Facultative Reinsurance
Agreement-Type
II
Form T-21.2
Form T-21.2 was amended
by this agenda item to conform to the
amendments to the
Facultative Reinsurance Agreement Form
T-18.1.
- Agenda Item
2006-37 Disapproved
- Agenda Item
2006-38 Insured
Closing and Settlement Letters
A new procedural rule
P-67 was created by this item to require that each Underwriter
must maintain an electronic database as
to certain information from
each transaction where an Insured Closing Letter has been
issued. Each agent and Direct
Operation must be provided
access to the electronic database
record upon request.
- Agenda Item
2006-39 Consumer
Notice
Another new procedural
rule (P-68) has been adopted to implement the notice
to consumers for complaint issues
as required by the Administrative Code.
- Agenda Item
2006-40 Closing
the Transaction
P-1 has been amended to
confirm the definition of "Closing the
Transaction" in the rule to the statutory definition
contained in Insurance Code
Sec. 2501.006.
To
view the new wording, click
here.
- Agenda Item
2006-41 Withdrawn
- Agenda Item
2006-42 Sunset
Provision
The Sunset Provision of
P-53 was removed by this item to make it clear that P-53 will
continue after January 1, 2008.
- Agenda Item
2006-43 Consumer
Complain Notice
This item amends Insuring
Forms T-7, T-1, T-1R, T-2, T-2R and T-44
to remove outdated
language affecting the consumer
complaint notice.
- Agenda Item
2006-44 Change
to a Settlement Statement
Number 18
of the Minimum Escrow
Accounting Procedures and Internal Controls Section
V was amended to require
any changes to a settlement statement be initialed by all
parties affected or a new statement be
prepared and signed. The amended
language also requires that
a copy of the revised final settlement
statement be provided to the
lender and borrower.
Underwriting
Guideline: Any revised settlement statement must be
approved by the lender.
- Agenda Item
2006-45 Commencement
of Business by a New Licensee
2006-45 amends Section
VI. E of the Administrative Rules to
provide that no agent can
commence business in a county until the
Department of Insurance has notified the agent that it
is authorized to do so.
- Agenda Item
2006-46 Attorneys
Licensed as Escrow Officers
Administrative Rule L-2
has been amended to require attorneys
licensed as escrow officers
to close the transaction in the title agent's
name, to use
the title agent's escrow account, and to
require
escrow officers to keep a
current address on file with the
Department of Insurance.
- Agenda Item
2006-47 Escrow
Officer's License
This agenda item clarifies that a non-attorney
employee of an attorney must be licensed
as an escrow officer prior
to performing the duties of an escrow
officer.
- Agenda Item
2006-48 Title
Agent and Escrow Officer Licensing
This item amends L-1 and
L-2 of Section VI of the Administrative
Rules to make them consistent with changes to
the Texas Business
Organizations Code and to simplify licensing
when a restructuring
results in a less than 50% change in
ownership.
- Agenda Item
2006-49 Policy
Guaranty Fee
Section VI of the
Administrative Rule was amended to make
it clear that all
remittances must be postmarked on or before the
remittance due date.
The Texas Title Insurance
Statistical Plan was amended to add codes for the
Restrictions,
Encroachments, and Minerals Endorsement
Forms.
This item proposed that
the Commissioner set new title insurance
premium rates. The ratemaking phase of the
hearing resulted in no
change to the rates.
- Agenda Item
2006-52 Withdrawn
- Agenda Item
2006-53 Withdrawn
- Agenda Item
2006-54 Withdrawn
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Agenda Items Incorporated
Into
Other Agenda Item Changes
The provisions in
each of these items have either been incorporated into
changes made by other Agenda
Items or were not approved by
the Commissioner of Insurance: 2006-55; 2006-56; and,
2006-57.
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- Agenda Item
2006-58
First and Subordinate Liens Issued
Simultaneously
This item amends R-7 to
clarify that when issuing a Loan policy on a first
lien and other policies on Subordinate
liens, the premium is
calculated by adding all the policy
amounts together and calculating the premium
based on that liability amount, plus five dollars
($5.00) for each additional policy.
- Agenda Item
2006-59
Rate Rules
This item adds certain
portions of R-3 to R-15 for clarity and
to eliminate cross
references to procedural rules.
- Agenda Item
2006-60
R-18 Amended
Rate Rule 18 (R-18) has been amended to rename the rule to
Refinance of Construction Lien
and to clarify how to
calculate premium when two permanent
loans are used to refinance one construction loan.
To view
the changes, click
here.
- Agenda Item
2006-61
Statistical Code
The Statistical Code has been amended to revise and add
a new Statistical Code to reflect the premium rates
set out for T-19 and
T-19.1.
- Agenda Item
2006-62 Withdrawn
- Agenda Item
2006-63 Withdrawn
- Agenda Item
2006-64 Disapproved
- Agenda Item
2006-65 Premium
Splits (P-24)
After countless hours
of consideration, meetings and
conference calls as well as three different agenda items
proposed for consideration this agenda item
amends the current
P-24. The amended rule mandates that payment of a portion
of the premium for (i) furnishing title evidence,
(ii) furnishing title
evidence and examining title, (iii)
closing a
transaction, or (iv) closing a transaction and
examining title, shall not exceed certain
parameters:
(a) If the policy amount is in excess
of $125,000.00, the premium shall be split
50/50 between the entity furnishing title
evidence or furnishing title evidence and title
examination and the entity closing the transaction and title
examination.
(b) If
the policy amount is
$125,000.00 or less, the split shall be 90% paid to
the entity furnishing title
evidence or furnishing title evidence and
title examination and 10% paid to the entity closing the
transaction and title examination.
The above percentages
apply to the portion of the premium after
payment of the Underwriter's portion of
the premium.
Any payment in excess of
these sums will be considered to be a
violation of P-24
unless the Company, Agent or Direct
Operation providing such services
and the Company, Agent or
Direct Operation paying for such
services enter into a prior
written agreement not less than 90 days prior
to closing. This agreement should specify and agree
to percentages different than stated
above.
Where the policy amount
is $125,000.00 or less the title agents
or companies may change the percentage if the entities are licensed in same or
contiguous counties AND enter into a prior
written agreement not
less than 90 days prior to the closing
specifying and agreeing to
percentages different than set out in
the rule. All payments are required to be
remitted no later than the 30th day
after the date of
recording by the county clerk of an
instrument conveying an interest in the land. This
would include a loan transaction where there is no sale,
such as a refinance transaction.
To
review the amended P-24,
click
here.
This change goes into effect
July 1,
2008.
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