Bulletin: IN2014010

Date:
October 30, 2014
To:
All Indiana Issuing Offices
RE:
UNDERWRITING - Indiana Inter-Underwriter Indemnification Agreement

Dear Associates:

Thirteen (13) Indiana title insurance underwriters have entered into an Indiana Inter-Underwriter Indemnification Agreement ("Agreement"). Attached is a copy of the Agreement [link]. The Agreement expedites the timely closing of transactions by eliminating the need for title insurers to issue specific letters of indemnity and the need for agents to request individual letters for covered matters. The use of the Agreement is subject to the terms and provisions therein. This Agreement replaces the Indiana Mutual Indemnification Agreement dated October 10, 2003, as amended in 2005. The language of the Agreement is modeled after the ALTA Inter-Underwriter Indemnification Agreement but retains provisions from the prior Indiana Mutual Indemnification Agreement. The following are participating underwriters:

Stewart Title Guaranty

Fidelity National Title Insurance Company

First American Title Insurance Company

Old Republic Title Insurance Company

Agents National Title Insurance Company

Commonwealth Land Title Insurance Company

Arsenal Insurance Company

Attorneys’ Title Guaranty Fund, Inc.

Chicago Title Insurance Company

North American Title Insurance Company

Premier Land Title Insurance Company

Westcor Land Title Insurance Company

WFG National Title Insurance Company

In order to rely on the Agreement, you must obtain a copy of the prior Insurer’s policy and retain in your file. If you intend to rely on a copy of a prior policy issued by another underwriter to clear a covered defect on a current Stewart policy, you must obtain authorization from an STG underwriter to do so. You will need to provide a copy of your current commitment along with a copy of the prior insurer’s policy for approval. The liability of the prior insurer is limited by the amount and terms of its policy. If you have a situation where the current policy amount exceeds the prior insurer’s policy liability amount, contact an STG underwriter for approval. The Agreement applies under the following circumstances:

  • A prior insurer issued an owner’s policy to the current property owner without taking exception for a defect covered under the Agreement.
  • A loan policy was issued without taking exception for a defect covered under the Agreement, the insured lender has taken title to the land by foreclosure or a deed in lieu of foreclosure, the insured lender is the seller in the current transaction and the current policy is an owner’s policy to an unrelated insured.  

The following are defects covered by the Agreement. You must request a specific letter of indemnity for any defect in title that is not covered by the Agreement. See also Section IV of the Agreement.  

  • Mortgages and monetary liens, including federal and state taxes, in the amount of $250,000.00 or less.
  • Marital rights in favor of spouse of prior owners.
  • Lack of authority or capacity of grantor to convey to current or prior owner of the land.
  • Failure of title to be effectively conveyed to current or prior owner due to defect in judicial or administrative proceeding.
  • Document affecting title not properly created, executed, witnessed, sealed, acknowledged, notarized, delivered, or recorded in the public records.

There are several matters to be aware of that are not covered by the Agreement:

  • There is no coverage for any liens over $250,000.00. If the defect is a lien over $250,000.00, you cannot rely on the Agreement and you must request a specific indemnity letter from the prior title insurer.
  • The Agreement does not apply if the prior policy insures against loss arising from the defect by affirmative language or endorsement.
  • A loan policy issued by prior insurer is only liable for indemnity for defects that are monetary liens.
  • The Agreement does not apply if there is pending litigation or foreclosure proceedings arising from the defect disclosed in the public records.
  • If a mortgage defect appears to be a mortgage recorded in the gap period between the date of closing and recording or the mortgage defect is a future advance/revolving credit/equity line and the current title underwriter intends to rely on the prior insurer’s policy, the current title insurer must provide notice to the prior insurer as specified in the Agreement. You will need to contact an STG underwriter to provide appropriate notice to the prior underwriter.

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:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None