16.91 - TITLE GUARANTY PROGRAM.
16.91 TITLE GUARANTY PROGRAM.
1. The authority through the title guaranty division shall
initiate and operate a program in which the division shall offer
guaranties of real property titles in this state. The terms,
conditions and form of the guaranty contract shall be forms approved
by the division board. The division shall fix a charge for the
guaranty in an amount sufficient to permit the program to operate on
a self-sustaining basis, including payment of administrative costs
and the maintenance of an adequate reserve against claims under the
title guaranty program. A title guaranty fund is created in the
office of the treasurer of state. Funds collected under this program
shall be placed in the title guaranty fund and are available to pay
all claims, necessary reserves and all administrative costs of the
title guaranty program. Moneys in the fund shall not revert to the
general fund and interest on the moneys in the fund shall be
deposited in the housing trust fund established in section 16.181 and
shall not accrue to the general fund. If the authority board in
consultation with the division board determines that there are
surplus funds in the title guaranty fund after providing for adequate
reserves and operating expenses of the division, the surplus funds
shall be transferred to the housing assistance fund created pursuant
to section 16.40.
2. A title guaranty, closing protection letter, or gap coverage
issued under this program is an obligation of the division only and
claims are payable solely and only out of the moneys, assets, and
revenues of the title guaranty fund and are not an indebtedness or
liability of the state. The state is not liable on any guaranty,
closing protection letter, or gap coverage.
3. With the approval of the authority board the division and its
board shall consult with the insurance division of the department of
commerce in developing a guaranty contract acceptable to the
secondary market and developing any other feature of the program with
which the insurance division may have special expertise. The
insurance division shall establish the amount for a loss reserve
fund. Except as provided in this subsection, the title guaranty
program is not subject to the jurisdiction of or regulation by the
insurance division or the commissioner of insurance.
4. Each participating attorney and abstractor may be required to
pay an annual participation fee to be eligible to participate in the
title guaranty program. The fee, if any, shall be set by the
division, subject to the approval of the authority.
5. The participation of abstractors and attorneys shall be in
accordance with rules established by the division and adopted by the
authority pursuant to chapter 17A.
a. (1) Each participant shall at all times maintain liability
coverage in amounts approved by the division. Upon payment of a
claim by the division, the division shall be subrogated to the rights
of the claimant against all persons relating to the claim.
(2) Additionally, each participating abstractor is required to
own or lease, and maintain and use in the preparation of abstracts,
an up-to-date abstract title plant including tract indices for real
estate for each county in which abstracts are prepared for real
property titles guaranteed by the division. The tract indices shall
contain a reference to all instruments affecting the real estate
which are recorded in the office of the county recorder, and shall
commence not less than forty years prior to the date the abstractor
commences participation in the title guaranty program. However, a
participating attorney providing abstract services continuously from
November 12, 1986, to the date of application, either personally or
through persons under the attorney's supervision and control is
exempt from the requirements of this subparagraph.
b. The division may waive the requirements of this subsection
pursuant to an application of an attorney or abstractor which shows
that the requirements impose a hardship to the attorney or abstractor
and that the waiver clearly is in the public interest or is
absolutely necessary to ensure availability of title guaranties
throughout the state.
6. Prior to the issuance of a title guaranty, the division shall
require evidence that an abstract of title to the property in
question has been brought up-to-date and certified by a participating
abstractor in a form approved by division rules and a title opinion
issued by a participating attorney in the form approved in the rules
stating the attorney's opinion as to the title. The division shall
require evidence of the abstract being brought up-to-date and the
abstractor shall retain evidence of the abstract as determined by the
board.
7. The attorney rendering a title opinion shall be authorized to
issue a title guaranty certificate subject to the rules of the
authority.
8. The authority shall adopt rules pursuant to chapter 17A that
are necessary for the implementation of the title guaranty program as
established by the division and that have been approved by the
authority. Section History: Recent Form
85 Acts, ch 252, § 30
CS85, § 220.91
87 Acts, ch 75, § 1; 88 Acts, ch 1145, § 2--5; 92 Acts, ch 1090, §
1
C93, § 16.91
97 Acts, ch 214, §6; 2000 Acts, ch 1166, §1; 2007 Acts, ch 54,
§27; 2008 Acts, ch 1032, §132; 2008 Acts, ch 1097, §2
Referred to in § 447.13