Tuesday, December 25, 2007

Bill Limits Title Insurance Sales

A bill that requires licensure of individual title insurance agents and bars licensed insurance agents from selling title insurance was approved by the House Wednesday.

A floor substitute for House Bill 3176, by Rep. Richard Phillips, R-Warr Acres, also prohibits abstractors and attorneys from acting as a title insurance agent unless licensed to do so.

Phillips said insurance commissioner John Crawford interprets current law as providing that only abstractors can sell title insurance, an interpretation that affects about 29 individuals who could offer title insurance under a previous commissioner's interpretation. Currently, Phillips said, real estate closing firms sometimes employ attorneys to countersign title policies, a practice he said frowned upon by Crawford and abstractors. Under the bill, title insurance agents would have to be state residents, obtain a surety bond of not to exceed $50,000, file an annual financial statement with the state insurance commissioner and disclose on each policy any other real estate, abstractor or title business in which the agency is engaged. A licensed title insurance agency without an abstractor or licensed attorney as a partner or owner would have to contract with or employ a licensed abstractor or attorney who is also licensed as a title insurance agent to countersign title insurance policies. Title insurance agencies licensed on or before the bill becomes effective would have until July 1, 2001, to comply with the measure. The bill passed 67-31, but upon a vote of 66-32 its emergency failed.

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