Bulletin: NJ000083

Date:
April 13, 2004
To:
All Issuing Offices in New Jersey
RE:
New Non-Imputation Endorsements

 Dear Associates:

Attached are copies of the new Form NJ 5-74 Non-Imputation - Full Equity Transfer (ALTA 15), Form NJ 5-75 Non-Imputation - Additional Insured (ALTA 15.1) and Form NJ 5-76 Non-Imputation - Partial Equity Transfer (ALTA 15.2) which are approved for use beginning March 8, 2004.  Form NJ 5-74 (ALTA 15) replaces current NJRB5-43.  All of these endorsements are high risk endorsements, requiring state office approval prior to issuance and are for use in commercial transactions only.

The forms should be issued when requested under the following circumstances:

Form NJ 5-74 (ALTA 15) Non-Imputation - Full Equity Transfer, should be used where one or more new partners, members or shareholders will be coming into an existing partnership, LLC or corporation.  It is to be used where the entire ownership interest in the existing entity is being transferred to new parties.  Providing the new parties acquired their interest in the exiting entity as purchasers for value and without knowledge of any asserted defect, lien, encumbrances or adverse claim, they will not be charged with the knowledge or action of the exiting partners, members or shareholders.  The charge for this endorsement is 20% of the applicable underwriting charge for the underlying policy.  In the event of simultaneously issued policies, a single charge will be made based on the higher liability.

Form NJ 5-75 (ALTA 15.1) Non-Imputation – Additional Insured, should be used where one or more new partners, members or shareholders are joining the partnership, LLC or corporation, but the original partners, members or shareholders will retain an interest in the existing entity. Providing the new parties acquired their interest in the exiting entity as purchasers for value and without knowledge of any asserted defect, lien, encumbrances or adverse claim, they will not be charged with the knowledge or action of the exiting partners, members or shareholders.  The charge is 20% of the applicable underwriting charge for the underlying policy.  In the event of simultaneously issued policies, a single charge will be made based on the higher liability.

Form NJ 5-76 (ALTA 15.2) Non-Imputation – Partial Equity Transfer, should be used in cases where one or more incoming partners, members or shareholders will receive a separate policy to cover their interest in the insured estate, and wish to limit their liability for actions or knowledge imputed to the ownership entity, Providing the new parties acquired their interest in the exiting entity as purchasers for value and without knowledge of any asserted defect, lien, encumbrances or adverse claim, they will not be charged with the knowledge or action of the exiting partners, members or shareholders.  If the policy to the incoming parties is issued simultaneously with the underlying policy, the charge is 20% of the applicable underwriting charge for the underlying policy.  In the event the policy to the incoming parties is issued subsequent to the issuance of the policy to the vestee of the insured estate, the charge for this endorsement will be the currently applicable underwriting charge based upon the incoming parties' percent of interest in the value of the real property of the insured estate.

Attached are the following pages to be substituted into your Rate and Form Manual:

Add Pages 240 through 242
Substitute Pages 111   

Please call the State office if you have any questions, and note that revised Rate and Form Manuals will be issued shortly.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
NJ000014 This Bulletin has been replaced by NJ000083.
Related Bulletins:
MU000049 New ALTA Forms
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
ALTA Endorsement 15 (Nonimputation-Full Equity Transfer)
 
ALTA Endorsement 15.1 (Nonimputation-Additional Insured)