- November 15, 2007
- All Nebraska Issuing Agents
- Title Searches and Commitmentes
We have recently received reports that some Nebraska agents have been issuing title insurance commitments and then, after updating, closing and recording, are cancelling the commitments and charging a "cancellation fee" under the commitment, as a search charge. Information is that this procedure is being used by agents who are not properly licensed under the Nebraska Abstracters Act. This practice gives rise to several regulatory concerns:
- The current rate filing reads, in part: "Commitments to insure are issued only upon receipt of an order for a policy of title insurance. After the issuance of the commitment to insure, if the record discloses that the commitment has been acted upon by recordation of deed, mortgage, or other instruments, or if acted upon by unrecorded document or documents, apply the original issue charge. However, if the applicant cancels or no documents have been recorded and no actions have been taken by the expiration of the commitment, a minimum charge of $25 plus extra service charges, if any must be charged." [Emphasis added].
- The Nebraska Abstracters Act defines "preparing written reports of title to real property" to be the business of abstracting. A "report of title" is defined as any type of summary of facts of record affecting title to real property. A Nebraska attorney’s opinion of title, information given by the Register of Deeds, and a title insurance commitment or policy are the only exceptions from the definition of "report of title." Anyone providing a report of title must be licensed as an abstracter, and possess a certificate of authority to engage in the business of abstracting. Someone who issues a report of title, even if disguised as a title insurance commitment, could be found to be in violation of the Abstracters Act, if not properly licensed in accordance with State law.
- In a 1998 Bulletin the Nebraska Department of Insurance addressed the matter of persons not properly licensed providing reports of title and advised that it will consider such activities to be violations of the Title Insurance Agent Act.
(a) Commitments are to be issued only if a policy is to be issued. If the transaction closes, the original issue premium must be charged.
(b) Persons providing reports of title and receiving a payment for doing so must be properly licensed under the Nebraska Abstracters Act.
(c) All charges made in connection with a title insurance commitment must be in accordance with the rates that have been filed with and approved by the Nebraska Department of Insurance.
(d) The Nebraska Abstracters Board of Examiners and the Nebraska Department of Insurance have explicitly stated their determination to enforce State law in this area.
If there are any questions about anything contained in this Bulletin, please contact John Daum.
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.