Bulletin: NM000011

Dear Associates:

The Superintendent of Insurance adopted new rates, forms and rules effective July 1, 2005.

New Rates

The variable portion of the rates was reduced 0.9%. Flat fees (such as endorsements and simultaneous issue rates) were not changed.

The new rate schedule (for original Owner's Policies) is attached as Exhibit 1.

The range of underwriter/agent division of premium was not changed. NMAC 13.14.3.11 was amended to clarify that the existing agent's split for amounts of insurance up to $2 million shall be 78-80%.

Removal of Standard Exception 8 (Taxes or Assessments Which Are Not Shown as Existing Liens by the Public Records) on Loan Policies (NMAC 13.14.7.25) and Owner's Policies (NMAC 13.14.6.24)

Existing NMAC 13.14.7.25 authorizes removal of Standard Exception 8 from Loan Policies. This amendment recognizes that the Standard Exception may be removed from a Loan Policy, a Leasehold Loan Policy, a Short Form Residential Loan Policy, or a Construction Loan Policy.

New NMAC 13.14.6.24 authorizes removal of Standard Exception 8 from the Owner's Policy or the Leasehold Owner's Policy. The premium for deletion from any Policy is $25. NMAC 13.14.10.46. You may delete Standard Exception 8 from any Policy if (1) you perform a tax search, and (2) all taxes and assessments will be paid.

Substitution Rate on Loans to Take Up, Renew, Extend or Satisfy an Existing Insured Loan (NMAC 13.14.9.39)

NMAC 13.14.9.39 is amended to provide that the premium for all liability above the unpaid balance of any original indebtedness shall be at 90% of the current Basic Premium Rates.

Commitment Language for Standard Exceptions (NMAC 13.14.5.9)

Each commitment shall contain the following revised statement:

Standard exceptions 1, 2, 3, 4, 6 and/or 8 may be deleted from any policy, and standard exception 7 may be modified on any policy, upon compliance with all provisions of the applicable rules, upon payment of all additional premiums required by the applicable rules, upon receipt of the required documents and upon compliance with the company's underwriting standards for each such deletion. Standard exception 5 may be deleted from the policy if the named insured in the case of an owner's policy, or the vestee, in the case of a leasehold or loan policy, is a corporation, a partnership, or other artificial entity, or a person holding title as trustee. The policy to be issued pursuant to this commitment will be endorsed or modified in schedule B by the company to waive its right to demand arbitration pursuant to the conditions and stipulations of the policy at no cost or charge to the insured. The endorsement or the language added to schedule B of the policy shall read: "In compliance with Subsection D of 13.14.18.10 NMAC, the company hereby waives its right to demand arbitration pursuant to the title insurance arbitration rules of the American arbitration association. Nothing herein prohibits the arbitration of all arbitrable matters when agreed to by both the company and the insured."

The Commitment Schedules now available from Stewart Forms and Information contain this revised language.

Deletion of Existing Forms and Rules

The following forms and applicable rules will no longer be available: NM 36 (Limited Title Search Policy), NM 37 (Continuation Endorsement), NM 38 (Revolving Credit, V.R.M. Endorsement), NM 39 (Lender's Creditor's Rights Endorsement), and NM 40 (Owner's Creditor's Rights Endorsement).

Correction of Manufactured Housing Endorsement (NM Form 16)

The Manufactured Housing Endorsement (NM 16) was changed to refer to the correct equivalent ALTA Endorsement (ALTA 7).

New Zoning Endorsement (NM 64 - Unimproved)

The Superintendent adopted two new endorsements that may be attached to Owner's or Loan Policies if the land is not "One-to-Four Family Residential." Each Zoning Endorsement may be issued only upon written authorization of the underwriter, and the evidence must retain the written authorization for two years. NMAC 13.14.8.26 (NM 64), 13.14.8.27 (NM 65).

Zoning Endorsement (ALTA 3) (Unimproved Land) is the new Endorsement NM 64, which may be issued on unimproved land. Paragraph 1 insures the zoning classification of the land. Paragraph 2 insures the uses allowed under that classification. Both paragraphs must be completed.

The premium rate for the NM 64 (Unimproved Land) is 15% of the full basic rate. The title insurance agent receives its regular commission for liability up to $27 million, and all amounts above that are remitted to the underwriter. The minimum charge for the NM 64 Endorsement is $250. If multiple Zoning Endorsements are issued in a single transaction, only one premium is calculated on the policy with the highest amount of insurance. NMAC 13.14.10.47.

A copy of the endorsement and Guidelines is attached as Exhibit 2. Please call our underwriting personnel if you are asked to issue this endorsement.

New Zoning Endorsement (NM 65 - Completed Structure)

The Superintendent adopted two new endorsements that may be attached to Owner's or Loan Policies if the land is not "One-to-Four Family Residential." Each Zoning Endorsement may be issued only upon written authorization of the underwriter, and the evidence must retain the written authorization for two years. NMAC 13.14.8.26 (NM 64), 13.14.8.27 (NM 65).

Zoning Endorsement (ALTA 3.1) (Completed Structure) is the new Endorsement NM 65, which may be issued on improved land. Paragraph 1(a) insures the zoning classification of the land. Paragraph 1(b) insures the uses allowed under that classification. Both paragraphs must be completed. Paragraph 2 insures against required removal or alteration of structures based on certain zoning violations. Paragraph 2 does not have to be completed.

The premium rate for the NM 65 (Completed Structure) is 23% of the full basic rate. The title insurance agent receives its regular commission for liability up to $27 million, and all amounts above that are remitted to the underwriter. The minimum charge for the NM 65 Endorsement is $250. If multiple Zoning Endorsements are issued in a single transaction, only one premium is calculated on the policy with the highest amount of insurance. NMAC 13.14.10.48.

A copy of the endorsement and Guidelines is attached as Exhibit 3. Please call our underwriting personnel if you are asked to issue this endorsement.