NM Non-Imputation Endorsement Guideline 28


This endorsement is designed to provide protection from matters that would otherwise by excluded from policy coverage on the basis of imputed knowledge. It may be issued in conjunction with either an Owner's Policy or a Loan Policy.

The Non-Imputation Endorsement limits Exclusion 3.(b) of both policies concerning matters "known" by the insured, not appearing in the public records, not known by the insurer, and not disclosed to the insurer.

This coverage is not designed to protect the insured entity itself, but rather to protect one or more of the parties that have an interest in the insured entity. For example, this endorsement may be requested by a new investor as to matters known by the former owner where property is conveyed by the former owner to a new partnership composed of the former owner and a new investor. Other examples may be found in the procedural regulation.

Rate: See Regulation 13 NMAC 14.10.21.

Procedure: See Regulation 13 NMAC 14.8.11.

Underwriting Requirements:

(1) Indemnification by the party whose knowledge is in question and an adequate affidavit or certification by that party that it knows of no outstanding claims or interests. An acceptable indemnity and affidavit form is located in Virtual Underwriter as "STG Indemnity - Non-Imputation Endorsement 2".

(2) Financial disclosures by the proposed indemnitor evidencing the financial strength of that party.

(3) An explanation of the transaction and of the reason for the endorsement; for example, the nature of the transaction may indicate that a leveraged buyout is occurring and, thus, that an additional exception should appear.

(4) The party whose knowledge is in question must be specified by name in the endorsement and not generically (such as "shareholders", "officers", "other parties by operation of law" or similar general terms).

(5) A Senior Underwriter must approve issuance of the endorsement. The issuing agent must retain the written authorization for two years following the issuance of the endorsement.

The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.