Bulletin: TX000009

Date:
August 22, 1991
To:
All Texas Issuing Offices
RE:
House Bill 2

Dear Associates:

The Legislature passed House Bill 2 during the 1991 regular session. This Bill generally becomes effective September 1, 1991. It causes numerous changes in insurance.

Department of Insurance

The State Board of Insurance will become the "Texas Department of Insurance".

Lobbying

You must register as a lobbyist if you represent a client more than twice during a calendar year before the Board, or any board, committee, or other body appointed by the Board.

According to a staff opinion, you do not need to register as a lobbyist in 1991 if you contact the staff of the Department. According to that opinion, you must register if you contact the Board or a committee appointed by the Board.

As a precaution, consider registration if you do contact the staff. If you register, you also must file monthly returns during the legislative session. You must file quarterly returns when the Legislature is not in session. These returns ("Activity Reports") require disclosure of lobbying expenditures. A lobbyist must file those returns even if the lobbyist had no expenses.

Effective January 1, 1992, Senate Bill 1 will modify the lobbying registration requirements.

Assessments

Title insurance companies must pay annual assessments of 5.7¢ for each Texas title policy written at the basic premium charge. This money will fund the Office of Public Insurance Counsel.

Information Bulletin

Title companies must include an Information Bulletin with policies. Staff's opinion is that this Information Bulletin is not to be required until January 1, 1992.

Toll-Free Number

Title insurance policies must contain a toll-free number that the insured may call to ask about policies and to make complaints. You should insert this continuation of Schedule A in policies issued on or after September 1, 1991, and before October 1, 1991.

Licenses

The agent must file applications for license renewals and must pay the non-refundable license renewal fee, not to exceed $50. Each additional title insurer must notify the Board of its appointment as an underwriter. The agent must pay a non-refundable fee, not to exceed $16 for each appointment. Department staff is preparing licensing guidelines.

Disclosure of Ownership

Agents must disclose those persons having, owning, or controlling 1% or more of the agent. Additionally, agents must disclose those persons having, owning, or controlling 10% or more of an entity that has, owns, or controls 1% or more of the agent. Agents also must disclose non-employees who receive a portion of the premium for services. Department staff will submit regulations.

Rebates

An insurer may not directly or indirectly do insurance business except as authorized by law. Violation is a third-degree felony. Violation of the rebate law (Art. 9.30) may constitute a third-degree felony. This prohibition applies regardless of whether the real estate is residential, commercial, agricultural, or other property.

Claims

The Board must adopt regulations establishing standards and time schedules to implement and handle title policy claims.

Plain Language Policy

The Board must adopt plain language owner policies on one-to-four family improved property.

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:
TX 11.10 Legislation
Exceptions Manual:
None
Forms:
None