Bulletin: TX2012001

Dear Associates:

When last we communicated on this subject, the legislature had passed HB 2408 which among other things eliminated the 2% credit when a policy is issued with a general mineral exception and removed the premium charge from loan policies. We expected at that time that the Commissioner of Insurance would enact procedural rules to implement the law’s provision before January 1, 2012. As you know, a new Commissioner was appointed and no such changes have yet been approved.

There will be a hearing on some 91 agenda items on February 28, 2012. Among  the agenda items proposed by the Texas Insurance Department staff is the elimination of R-36 (the credit rule) and amending T-29.1 to provide that the premium for an owner’s policy T-19.2 or T-19.3 remains $50 and the premium for a loan policy T-19.2 or T-19.3 is $0. While it is possible that the Commissioner would approve these new agenda items effective that day, historically it is several weeks until the final order is issued making the changes effective. 

The TDI staff has stated that they recognize that the change in the law trumps the existing regulations. Clearly, even though the Commissioner has not formally changed the regulations, title companies must comply with the law as must the TDI Staff. You should change your procedures and software to reflect that there is no longer a 2% credit when a general mineral exception is used and that the premium for a loan policy T-19.2 or T-19.3 is $0.
 
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