Bulletin: KY2014002

Dear Associates: 

Most of you are familiar with Closing Protection Letters (CPL’s). They are issued in connection with closings, and give the requesting party (typically the lender) coverage against certain acts of the closing agent that could ultimately cause loss. While these CPL’s have been provided free of charge in the past, they will now incur a fee. On all transactions for which commitments are issued on or after April 7, 2014, a fee must be collected for any CPL issued in association with the transaction. However, no CPL fee should be collected unless the transaction actually closes. The new rate manual, which has been amended to include these charges, can be viewed here.

A CPL may be issued to the Lender, Borrower/Buyer, and/or Seller of the property if:

1. A title policy is issued by a title company or by a title insurance producer on behalf of the company, and
2. The company or title insurance producer also acts as the settlement or closing agent for the transaction.

The fee is $50 for a Lender CPL, and an additional $25 each for a Buyer/Borrower or Seller CPL. The entire amount of this CPL fee must be remitted to Stewart, and will not be subject to the Agent’s split. The amount collected for the CPL is also subject to Kentucky’s municipal premium tax (for the same jurisdiction as the municipal premium tax for the policy). The fee and any applicable premium tax will be shown in the 1100 block on the HUD.

There are multiple ways that you can remit CPL charges and the accompanying premium tax to Stewart. Please see the attached memorandum for details on the reporting procedures [click here]. In short, for those who report electronically using AIM, you can report the CPL as an endorsement to the policy that it goes with, using transaction code 660. For those who report policies manually, please see the attached Excel spreadsheet that can be used for that purpose [click here]. Reporting and accompanying checks can be sent to Policy Services in Houston or to the local Stewart office, just as you have sent in other policy remittance in the past. To the extent that you combine premium for policies and CPL fees, please provide a breakdown of what is included with the check. Please also continue to cut a separate check for premium tax, and include a breakdown on checks if the tax is for both policy and CPL fees.

Please forward all requests to (1) modify the closing protection coverage document or (2) reflect a different amount for a transaction that exceeds $5 million to ICLAdmin@stewart.com. Please note that all requests for closing protection coverage documents on transactions over $5 million must be accompanied by a completed "overlimits approval" form approved and executed by the local underwriter.

Closing Protection Coverage documents may be issued ONLY by use of the Stewart ICL Website: https://www.stewarticl.com. Closing Protection Coverage documents may not be (1) modified, (2) prepared by an Issuing Agent on its Letterhead or in any other format, or (3) typed, computer generated, or signed by an Issuing Agent.

The Stewart ICL Website has the most recent Closing Protection Coverage documents approved for issuance and maintains a record of the Closing Protection Coverage documents issued. 

The Stewart ICL Website generates the Closing Protection Coverage documents only for current authorized Issuing Agents (or Approved Attorneys, where allowed and customary). The Closing Protection Coverage document is generated in HTML format which is to be printed and then sent to the requesting lender.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.