THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
Bulletin: OK000004
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Bulletin: OK000004
Dear Associates:
As you know, the Oklahoma Insurance Department has promulgated rules specifying the documents that must be furnished to a title insurer and rules concerning the reporting of premium collected. As a reminder, these rules are summarized below.
POLICY DOCUMENTATION
Rule 365:20-3-3 and Rule 365:20-3-1 require the following:
1) The title agent attach to the title insurer's copy of the title insurance policy:
a) A signed and dated copy of the most recent abstractor's certificate;
b) A copy of the attorney's title opinion covering the land referred to in said policy, with the attorney's Oklahoma Bar Association number prominently displayed thereon; and,
c) A copy of any preliminary report, binder or commitment (365:20-3-1).
Note: The Insurance Department has interpreted the rules to require that the title insurer's copies of commitments, policies, and endorsements have a signature.
2) The title insurance policy be countersigned by a licensed title agent, who shall be a bonded and licensed abstractor and who is appointed as a title agent by the title insurer, or an attorney who is licensed to practice law in Oklahoma and who is appointed as a title agent by the title insurer.
3) The abstractor's certificate includes the following:
a) A paragraph which states that the abstractor who last certified the abstract was a licensed and bonded abstractor in the county where the land is located; and,
b)The abstractor's number as assigned by the State Auditor and Inspector's office is noted thereon.
4) That all of the above be furnished to the title insurer by the title agent not later than 180 days from the effective date of the title insurance policy.
Rule 365:20-3-4 provides that failure to comply with these requirements may, after a hearing, result in censure, suspension or revocation of the certificate of authority of the title insurer or a fine for each occurrence. Non-compliance by a title agent may result in a breach of the title agent's underwriting agreement.
PREMIUM REPORTING
Rule 365:20-3-5 requires that every title agent report in writing to the title insurer the amount of title insurance premium actually charged for a title insurance policy, including endorsement premiums. This rule became effective January 1, 1998.
COPY OF RULES
See Exhibit A for a copy of the rules referred to herein.
365:20-3-1 Definitions
The following words or terms, when used in this subchapter, shall have the following meaning, unless the context clearly indicates otherwise.
"Title insurance business" or "business of title insurance" means:
A) issuing or offering to issue a title insurance policy;
B) transacting or proposing to transact any of the following activities when conducted or performed in a contemplation of the issuance of a title policy:
(i) negotiating on behalf of a title insurer, the issuance of a title insurance policy;
(ii) guaranteeing, warranting or otherwise insuring the correctness of title searches;
(iii) executing or countersigning title insurance policies;
(iv) abstracting, searching or examining titles, preliminary to the issuance of a commitment;
(v) doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of this chapter.
" Title insurance policy" means any written instrument purporting to show the title to real or personal property or any interest therein or encumbrance thereon, or to furnish such information relative to real property, which written instrument in express terms purports to insure or guarantee such title or the correctness of such information. The contract shall, at a minimum indemnify against loss or damage arising from any or all of the following, existing on or before the policy date:
A) defects in or liens or encumbrances on the insured title;
B) unmarketability of insured title; or
C) invalidity or unenforceability of liens or encumbrances on the stated property.
"Title insurance policy" includes a preliminary report, binder, or commitment. For purposes of this definition, a commitment or binder means any written instrument, or verbal representation which created an obligation (whether conditional or not) to issue a title policy.
"Title insurer" means any foreign or domestic stock insurer authorized by its corporate charter to engage in the business of title insurance, pursuant to 36 O.S. Section 5001 et seq.
365:20-3-3 Documentation
(a) All title insurers engaged in the business of title insurance in the State of Oklahoma, other than reinsurance shall attach to the underwriter's copy of the title policy the following:
(1) A signed and dated copy of the most recent abstractor's certificate as required by 74 O.S. Section 227.01 et seq. shall be reproduced and attached to each policy.
(2) A copy of an opinion of title covering the real property insured under said policy shall be issued by an attorney licensed to practice in Oklahoma; and the Oklahoma Bar Association Number of the attorney issuing the opinion should be prominently displayed upon the opinion.
(3) The policy shall be countersigned only by a bonded and licensed abstractor or by an attorney who is licensed to practice law in Oklahoma and duly appointed as an agent by the title insurance company.
(4) A paragraph on the abstractor's certificate shall provide that the abstractor who last certified the abstract was a licensed and bonded abstractor in the county wherein the property is situated and his abstractor's number as assigned by the State Auditor and Inspector's office shall be noted.
(b) If the title insurance policy is being issued directly by the title insurance company, all of the requirements in (a)(1) through (a)(4) shall be attached to the title insurance company's copy of the policy, concurrently with the issuance thereof. If the title insurance policy is issued by a duly appointed agent of the title insurance company, all of the requirements in (a)(1) through (a)(4) must be furnished to the title insurance company not later than one-hundred eight (180) days form the effective date of the title insurance policy. The documentation required under this section shall be permanently maintained by the title insurance company in a manner which is readily accessible and open to inspection by the Insurance Commissioner or his duly authorized representative.
365:20-3-5 Reporting requirements
(a)Every title insurance agent shall report in writing to the insurer the amount of title insurance premium actually charged, and the title insurer shall pay to the State of Oklahoma the amount of tax due on such reported title insurance premium.
(b)Every title insurer holding a Certificate of Authority from the Oklahoma Department of Insurance shall conduct a policy inventory audit, in accordance with its accepted company practice of each of its licensed agent periodically, but al least every two years. Such policy inventory audit is defined as an audit of the unused forms in the possession of each of its licensed title insurance agents to determine that all used policy forms have been reported to the title insurer. A report of each such audit shall be made to the Oklahoma Insurance Department in writing in a form acceptable to the Insurance Commissioner. Interested parties may upon request obtain a copy of any approved title policy inventory audit report form from the Oklahoma Insurance Department.
(c)The reporting requirements contained in this rule shall become effective January 1, 1998.
References
- Bulletins Replaced:
- None
- Related Bulletins:
- None
- Underwriting Manual:
- None
- Exceptions Manual:
- None
- Forms:
- None