Bulletin: CO2012001

What is an Underwriting Minute?

An Underwriting Minute is just a very short, friendly email reminder of some things we see that are either not well known or understood, may have been an issue in a claim or just bug us when we see it done wrong.  They are not necessarily "life or death" type issues.  You should see an Underwriting Minute approximately each quarter.  If you have an idea for an Underwriting Minute subject, feel free to contact me.

DOI Regulation 3-5-1 and Generic Exceptions

Colorado Division of Insurance Regulation 3-5-1 is the most important of several regulations that govern title insurance in Colorado.  Section 7-D of the regulation, which is being actively enforced by the Division, provides:  Every title entity shall ensure that, except for standard preprinted exceptions, all proposed title exceptions on a title commitment for issuance of an owners policy of title insurance shall make reference to the recording information of the document to be excepted from coverage.  In the case of unrecorded yet known impairments, the title entity may use other identifiable marks on the document, such as date, names of parties, case numbers, etc.  Title entities shall not make use of generic exceptions unless there is receipt of written instructions authorizing the use of such exceptions or a request for a specific policy form has been made which makes use of such exceptions.  (Emphasis added)

Trusts with Similar Names

Sometimes you may encounter trusts with similar names.  For example, you may find vesting deeds or trust agreements for "the XYZ Family Trust dated 7-1-09" and other documents for "the XYZ Family Trust dated 9-1-09."  These two trusts may be the same trust that has been amended or restated at the later date, but they also may not be related at all.  Since claims have arisen when we assumed the trusts were the same when in reality they were not, take extra care in these situations and feel free to contact an underwriter to review these facts and documents with you when they arise.

Financial Information for Indemnities

When you are collecting financial information to support the approval of an indemnity it should consist of the most recent available balance sheet, showing the assets, liabilities and net worth of the proposed indemnitor as well as the profit and loss statement for the latest reporting period.  We look for the details in both sets of information.  Tax returns are generally out of date, for our purposes, and usually not helpful at all.

Homestead--Spouse’s Signature Necessary?

In Colorado, when title in vested in the name of one spouse but not both, only the signature of the spouse in title is necessary to convey or encumber the property.  The signature of the non-titled spouse is not necessary unless a claim of homestead, executed by either spouse, has been recorded.

A MINUTE’S UP!!!
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