31A-23a-204 - Special requirements for title insurance producers and agencies.
31A-23a-204. Special requirements for title insurance producers and agencies.
A title insurance producer, including an agency, shall be licensed in accordance with thischapter, with the additional requirements listed in this section.
(1) (a) A person that receives a new license under this title as a title insurance agency,shall at the time of licensure be owned or managed by one or more individuals who are licensedfor at least three of the five years immediately proceeding the date on which the title insuranceagency applies for a license with both:
(i) a search line of authority; and
(ii) an escrow line of authority.
(b) A title insurance agency subject to Subsection (1)(a) may comply with Subsection(1)(a) by having the title insurance agency owned or managed by:
(i) one or more individuals who are licensed with the search line of authority for the timeperiod provided in Subsection (1)(a); and
(ii) one or more individuals who are licensed with the escrow line of authority for thetime period provided in Subsection (1)(a).
(c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404,exempt an attorney with real estate experience from the experience requirements in Subsection(1)(a).
(2) (a) A title insurance agency or producer appointed by an insurer shall maintain:
(i) a fidelity bond;
(ii) a professional liability insurance policy; or
(iii) a financial protection:
(A) equivalent to that described in Subsection (2)(a)(i) or (ii); and
(B) that the commissioner considers adequate.
(b) The bond, insurance, or financial protection required by this Subsection (2):
(i) shall be supplied under a contract approved by the commissioner to provide protectionagainst the improper performance of any service in conjunction with the issuance of a contract orpolicy of title insurance; and
(ii) be in a face amount no less than $50,000.
(c) The Title and Escrow Commission may by rule, subject to Section 31A-2-404,exempt title insurance producers from the requirements of this Subsection (2) upon a findingthat, and only so long as, the required policy or bond is generally unavailable at reasonable rates.
(3) A title insurance agency or producer appointed by an insurer may maintain a reservefund to the extent monies were deposited before July 1, 2008, and not withdrawn to the incomeof the title insurance producer.
(4) An examination for licensure shall include questions regarding the search andexamination of title to real property.
(5) A title insurance producer may not perform the functions of escrow unless the titleinsurance producer has been examined on the fiduciary duties and procedures involved in thosefunctions.
(6) The Title and Escrow Commission shall adopt rules, subject to Section 31A-2-404,after consulting with the department and the department's test administrator, establishing anexamination for a license that will satisfy this section.
(7) A license may be issued to a title insurance producer who has qualified:
(a) to perform only searches and examinations of title as specified in Subsection (4);
(b) to handle only escrow arrangements as specified in Subsection (5); or
(c) to act as a title marketing representative.
(8) (a) A person licensed to practice law in Utah is exempt from the requirements ofSubsections (2) and (3) if that person issues 12 or less policies in any 12-month period.
(b) In determining the number of policies issued by a person licensed to practice law inUtah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues apolicy to more than one party to the same closing, the person is considered to have issued onlyone policy.
(9) A person licensed to practice law in Utah, whether exempt under Subsection (8) ornot, shall maintain a trust account separate from a law firm trust account for all title and realestate escrow transactions.
Amended by Chapter 349, 2009 General Session