Bulletin: SLS2011010

Date:
June 15, 2011
To:
All Issuing Offices
RE:
Avoidance of Potential Conflicts of Interest

Dear Associates: 

This bulletin reminds you that, in order to avoid potential conflicts of interest, all issuing offices are prohibited from issuing title insurance policies or closing any transactions on any property in which a principal of such office or agent has a direct interest or a material indirect interest in such property, unless approved in writing in advance by a Stewart underwriter or Stewart Legal Services. You must obtain such approval by use of an Overlimits Request form upon which any conflict of interest or potential conflict of interest must be disclosed.

For the purposes of this policy:

(1) an "issuing office" includes main offices and all branch offices, if any;

(2) a "principal" means: (a) the manager and assistant managers of an issuing office, or (b) an officer, director or shareholder of a corporation, a manager or member of a limited liability company, or a general or limited partner of a partnership that owns the issuing office or agent, and who owns an interest constituting more than 25% of the ownership of such issuing office or agent;

(3) a "direct interest" means personal ownership, by a principal or a principal's spouse, a principal’s child, or a principal’s parent, of property as buyer, seller or owner, in their name, either alone or with others, in any percentage amount, with respect to any type of property; and

(4) a "material indirect interest" means ownership in an entity that owns or will own property other than an existing 1 - 4 family residential dwelling, as buyer, seller or owner, such that the principal has an economic interest in the property constituting more than 25% of the value of the property.  An "indirect interest" does not include an interest in the transaction solely as a real estate broker or mortgage broker. 

The Stewart underwriter must send the approved Overlimits Request to the Issuing Office’s Agency Services Manager.

A Senior Underwriter shall have authority to waive the above approval requirements.

The attached Sample Questions and Answers may provide guidance regarding approval requirements.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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:
SLS2010008 Avoidance of Potential Conflicts of Interest [Revised 5-26-10]
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
STG Request for Approval to Issue Overlimits (Large) Policy or Extra Hazardous Coverage
 
TX STG Request for Approval to Issue Overlimits (Large) Policy or Extra Hazardous Coverage