15.56 Pro-Forma Policies

15.56.1

In General

It is not uncommon for a proposed insured to request from the Company, prior to the closing of the transaction, the issuance of a pro-forma policy for the purpose of examining the format and contents of the policy to be issued by the Company.

Although the Company does not object (provided such is not in violation of state law) to comply with said type of request, the issuance of pro-forma policies, even when marked as "sample policy" or "pro-forma policy", has historically been a source of problems, misunderstandings and even claims.

For these reasons it is essential for any pro-forma policy to include appropriate language disclaiming its condition of new commitment and set forth in an unequivocal manner that there are certain underwriting requirements, contained or to be contained in a title commitment that must be complied with prior to the issuance of any title policy.

The above referenced language should be typed in bold type or added by rubber stamp (preferably in red ink) and should be included in all the pages and copies of the pro-forma policy and the original or file copy retained by the Company or an Agent.

You should determine that state regulation allows the issuance of a pro-forma policy.