Sec. 38a-402. Definitions.
Sec. 38a-402. Definitions. As used in sections 38a-400 to 38a-425, inclusive, the
following terms shall have the following meanings, unless the context shall otherwise
require:
(1) "Applicant" means a person, whether or not a prospective insured, who applies
to a title insurer or title agent for a title insurance policy and who, at the time of the
application, is not a title agent.
(2) "Approved attorney" means an attorney at law who is not an employee of a title
insurer and whose certification as to status of title a title insurer is willing to accept as
the basis for issuance of its title insurance policy.
(3) "Associate" means any (A) business organized for profit in which a producer
of title insurance business is a director, officer, partner, employee or owner of one per
cent or more of the equity capital thereof; (B) employee of a producer of title insurance
business; (C) franchisor or franchisee of a producer of title insurance business; (D)
spouse, parent or child of a producer of title insurance business who is a natural person;
(E) person, other than a natural person, who controls, is controlled by, or is under common control with, a producer of title insurance business; or (F) person with whom a
producer of title insurance business or any associate of such producer has any agreement,
arrangement or understanding or pursues any course of conduct, the purpose or substantial effect of which is to evade the provisions of sections 38a-400 to 38a-425, inclusive.
(4) "Charge" means any fee billed by a title agent or title insurer, or both, for the
performance of services, other than fees which are premium, as defined in subdivision
(9) of this section. Charge includes, but is not limited to, fees for document preparation
and fees for services commenced but not completed. Charge does not include fees collected by a title insurer or title agent in an escrow, settlement or closing when the fees
are limited to the amount billed for services rendered by an entity independent of the
title insurer or title agent.
(5) "Controlled business" means any portion of a title insurer's or title agent's business of title insurance in this state, referred to it by any producer of title business or by
any associate of such producer, where the producer of title business, the associate, or
both, have a financial interest in the title insurer or title agent to which business is
referred.
(6) "Financial interest" means any interest, legal or beneficial, that entitles the
holder directly or indirectly to one per cent or more of the net profits or net worth of
the entity in which the interest is held.
(7) "Gross operating revenue" means all premiums received by a title insurer or
title agent.
(8) "Net retained liability" means the total liability retained by a title insurer for a
single risk after taking into account the deduction for ceded liability, if any.
(9) "Premium" means fees for (A) issuing a title insurance policy, including any
service charge or administration fee for the issuance of a title insurance policy; (B)
preparing or issuing preliminary reports, property profiles, commitments, binders or
like products; or (C) assuming liability under a contract of reinsurance.
(10) "Producer of title insurance business" or "producer" means any person, including any officer, director or owner of five per cent or more of the equity or capital of any
person, engaged in this state in the trade, business, occupation or profession of (A)
buying or selling interests in real property, (B) making loans secured by interests in real
property or (C) acting as a broker, agent, representative or attorney of a person who
buys or sells any interest in real property or who lends or borrows money with such
interest as security.
(11) "Refer" means to direct or cause to be directed or to exercise any power or
influence over the direction of title insurance business, whether or not the consent or
approval of any other person is sought or obtained with respect to the referral.
(12) "Single risk" means the insured amount of any title insurance policy, except
that where two or more title insurance policies are issued simultaneously covering different estates in the same real property, single risk means the sum of the insured amounts
of all such title insurance policies, provided a title insurance policy insuring the interest
of a mortgagee, a claim payment under which reduces the insured amount of a fee or
leasehold title insurance policy, shall be excluded in computing the amount of a single
risk to the extent that the insured amount of the mortgage title insurance policy does
not exceed the insured amount of the fee or leasehold title insurance policy.
(13) "Title agent" or "agent" means any person authorized in writing by a title
insurer to (A) solicit title insurance business, (B) collect premiums, (C) determine the
insurability of a risk in accordance with underwriting rules and standards prescribed by
the title insurer or (D) issue policies of the title insurer. Title agent does not include
officers or employees of a title insurer. No person may act as a title agent unless he is
a commissioner of the Superior Court in good standing, except any individual who held
a valid title insurance license on or before June 12, 1984.
(14) "Title insurance business" or "business of title insurance" means (A) issuing
as insurer or offering to issue as insurer a title insurance policy or (B) transacting or
proposing to transact by a title insurer or title agent any of the following activities when
conducted or performed in contemplation of the issuance of a title insurance policy:
(i) Soliciting or negotiating the issuance of a title insurance policy; (ii) guaranteeing,
warranting, or otherwise insuring the correctness of title searches; (iii) execution of title
insurance policies; (iv) effecting contracts of reinsurance or (v) doing or proposing to
do any business in substance equivalent to any of the foregoing in a manner designed
to evade the provisions of sections 38a-400 to 38a-425, inclusive.
(15) "Title insurance policy" or "policy" means a contract insuring or indemnifying
against loss or damage arising from (A) defects in or liens or encumbrances on the
insured title, (B) unmarketability of the insured title or (C) invalidity or unenforceability
of liens or encumbrances on the stated property, provided any such defect, unmarketability or invalidity existed on or before the policy date. Title insurance policy does not
include a preliminary report, binder, commitment or abstract.
(16) "Title insurer" or "insurer" means a company organized under laws of this
state for the purpose of transacting as insurer the business of title insurance and any
foreign or alien title insurer engaged in this state in the business of title insurance as
insurer.
(17) "Title plant" means a set of records in which an entry has been made of documents or matters imparting constructive notice under the law of matters affecting title
to real property or any interest therein or encumbrance thereon, which have been filed
or recorded in the jurisdiction for which such title plant is maintained.
(P.A. 90-218, S. 3.; May 25 Sp. Sess. P.A. 94-1, S. 37, 38, 130; P.A. 96-193, S. 34, 36.)
History: May 25 Sp. Sess. P.A. 94-1 made technical change in Subdivs. (2) and (15), effective July 1, 1994; P.A. 96-193 redefined "title agent" to limit title agent eligibility to commissioners of Superior Court, and to those who held a valid
license on or before June 12, 1984, effective June 3, 1996.