Find Legal Information

26.1-20 Title Insurance Companies

Download pdf

CHAPTER 26.1-20TITLE INSURANCE COMPANIES26.1-20-01. Title insurance company subject to insurance company requirements.Every domestic or foreign corporation organized for the purpose of insuring titles to real property<br>in this state or of insuring against loss by reason of defective titles thereto, or encumbrances<br>thereon, is subject to and shall comply with all the requirements of the laws of this state made<br>applicable to insurance companies generally and the rules of the commissioner, except as<br>provided in this chapter or when the laws and rules are inconsistent with this chapter.26.1-20-02. Capital stock and surplus requirement. A domestic corporation organizedfor the purpose of insuring titles to real property in this state or of insuring against loss by reason<br>of defective titles to real property, or encumbrances on real property, may not be incorporated<br>unless it has an authorized capital of not less than five hundred thousand dollars and a surplus of<br>not less than five hundred thousand dollars if a stock company, and a surplus of not less than<br>five hundred thousand dollars if a mutual company. If the capital or surplus requirements at the<br>time the company was incorporated under this chapter were less than the minimum requirements<br>provided by this section, the company may maintain authorized capital or surplus which satisfies<br>the capital stock or surplus requirements in effect at that time.It may issue no policy orinsurance until at least fifty percent of the minimum capital stock required by this section, and all<br>the surplus required, have been paid in, the residue of capital stock to be paid in within twelve<br>months from the time of filing the articles of incorporation, but the commissioner, for good cause<br>shown, may extend the time of payment of the residue for the further period of one year.26.1-20-03. Surplus to constitute guaranty fund - Deposit. The surplus provided forin section 26.1-20-02 constitutes a guaranty fund, which must be invested in securities as<br>provided by section 26.1-05-19, and be duly deposited with the commissioner, and the<br>commissioner's certification of that deposit must be procured, as provided by law. This deposit<br>must be maintained unimpaired and the principal of the fund may be applied only to the payment<br>of losses and expenses by reason of its guaranty and insurance contracts, but the corporation<br>has the right to collect the income from the deposit and to substitute other like securities of equal<br>amount and value from time to time.26.1-20-04. Limitation on risks. A title insurance company transacting business in thisstate may not expose itself to loss on any one risk or hazard to an amount exceeding fifty percent<br>of its paid-up capital and surplus if a stock company, or fifty percent of its surplus if a mutual<br>company, unless the excess is reinsured.26.1-20-05. Title evidence - Examination. A domestic corporation organized for thepurpose of insuring title to real property in this state or of insuring against loss by reason of<br>defective titles to real property, or encumbrances on real property, or a foreign corporation<br>authorized to do business in this state, may not issue any policy, binder, or certificate unless it<br>has secured from a person, firm, or corporation holding a certificate of authority under chapter<br>43-01 the record title evidence of the title to be insured, and the title evidence has been<br>examined by a person duly admitted to the practice of law as provided by chapter 27-11. The<br>certificate of authority of any corporation violating this section must be revoked as provided by<br>chapter 26.1-02 or 26.1-11.26.1-20-06. Judgment against corporation - Enforcement. If a corporation fails tosatisfy any judgment against it arising out of its liability under any title insurance policy, issued,<br>insured, or assumed by it, within thirty days after the finality of the judgment becomes fixed, the<br>judgment may be enforced against its guaranty fund deposit through the following procedure:1.The judgment creditor shall petition the court wherein the judgment is entered and<br>as part of the same cause, truthfully setting forth the facts regarding the failure to<br>satisfy the judgment as required by this section.Page No. 12.Upon the petition the court shall direct the issuance of a special execution directed to<br>the sheriff of Burleigh County, requiring that the sheriff sell so much of the securities<br>on deposit as may be required to satisfy the judgment and pay the costs of the levy.3.The special execution must be executed by the sheriff by delivering to the state<br>treasurer and to the commissioner a certified copy of the writ of execution together<br>with a certified copy of the judgment and of the petition and order, and within ten<br>days thereafter there must be delivered to the sheriff sufficient securities to satisfy<br>the judgment in full. The sheriff shall sell the securities upon execution as in the<br>case of sales of personal property upon execution generally.Page No. 2Document Outlinechapter 26.1-20 title insurance companies