HB 998 -- Title Insurance

Sponsor:  Yates

This bill establishes the Missouri Title Insurance Act.  In its
main provisions, the bill:

(1)  Requires a title insurer or title agent issuing a lender's
title insurance policy, when no owner's policy has been
requested, to give written notice to a purchaser/mortgagor that
the lender's policy does not protect the purchaser;

(2)  Requires a written contract specifying the responsibilities
between a title insurer and a title insurance agent and the title
insurer's supervisory responsibilities regarding title insurance
agents;

(3)  Allows a title insurer or title insurance agent to operate
as an escrow, security, settlement, or closing agent if certain
requirements are met;

(4)  Requires title insurers to conduct on-site reviews at least
annually on the practices and procedures of title insurance
agencies or agents with which they contract.  Reports will be
maintained for at least four years and made available to the
Director of the Department of Insurance, Financial Institutions,
and Professional Registration upon request;

(5)  Makes it unlawful for any title agency or agent not
affiliated with an agency to deny reasonable access or fail to
cooperate with its underwriters in the title insurer's review of
its accounts;

(6)  Prohibits title insurers, agencies, agents, or other persons
from receiving any consideration for the referral of any title
services provided, except that a discount may be given to a
person paying for the title in a real estate closing for charges
or fees related to the title services;

(7)  Requires settlement agents to record all deeds and security
instruments within five business days after completion;

(8)  Prohibits title insurers or agents from participating in
transactions in which they know the loan producer requires a
party to obtain title insurance from a particular insurer or
agent.  Offering payments or rebates as an inducement to contract
for title insurance is also prohibited;

(9)  Requires title insurers to file all premium rates and
supplementary rate information with the department director
before the rates become effective.  If any rates are found to be
excessive, inadequate, or unfairly discriminatory, the department
director can disapprove the rate.  If an insurer's rates are
disapproved, he or she may request a hearing.  Rate information
is a public record;

(10)  Requires that no title insurance policy be written until a
title search has been completed and the property found insurable.
Once completed, all required outstanding, enforceable recorded
liens, or other interests against the title must be shown;

(11)  Allows the department director, if it is determined that a
person has or may engage in a violation of title insurance laws,
to issue administrative orders as authorized under Section
374.046, RSMo, to suspend or revoke the license of a producer or
the certificate of authority of any title insurer for the
violations and bring action in court to enjoin violations of the
Real Estate Settlement Procedures Act;

(12)  Prohibits an insurer that transacts any other class, type,
or kind of business from obtaining a title insurance license,
except that a title insurer can issue closing or settlement
protection;

(13)  Requires title insurers to maintain at least $800,000 each
of paid-in capital and surpluses;

(14)  Prohibits the net retained liability of a title insurer for
a single risk from exceeding 50% of the surplus of all risks
insured;

(15)  Requires that the general investment provisions of Sections
379.080 - 379.082 will apply when determining the financial
condition of a title insurer except that an investment in a title
plant equal to the cost will be allowed as long as the aggregate
amount of all investments does not exceed 20% of the surplus to
policyholders;

(16)  Prohibits the use of listed title insurance forms unless
the forms have been approved by the department director;

(17)  Requires all title insurance agents to be licensed and
specifies their responsibilities, obligations for licensure, and
continuing education requirements;

(18)  Allows the department director to inspect the records of
title agencies, insurance agencies, and agents; and

(19)  Requires titled insurers, agencies, or agents to disclose
and provide required information on any affiliated businesses
involved in the transaction prior to commencing the transaction.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am