Bulletin: DC2011001

Date:
January 25, 2011
To:
All District of Columbia Issuing Offices
RE:
Regulation of Title Agents in the District of Columbia

Dear Associates:

This Bulletin updates Bulletin DC2010004 concerning the status of the licensing and regulation of title insurance companies and producers in Washington, D.C.

Title Insurance Forms

Under the new legislation, effective January 1, 2011, a title insurer may not use any form unless it has been filed with the Department of Insurance, Securities and Banking ("DISB"). While as of December 2, 2010 only 5 of the 20 title insurance companies licensed in Washington, D.C. had filed forms, Stewart Title Guaranty Company did timely file and received approval of its forms.

Commencing January 1, 2011, all of the ALTA Title Policy Forms and Endorsements that have been issued since the 2006 updates are approved for use in DC. Please note that Schedule A of a title commitment for owner's title insurance relating to owner occupied residential property of 4 or fewer units must have the following statement in bold type:

"Please read the exceptions and the terms shown or referred to herein carefully. The exceptions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.

It is important to note that this form is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land."

Please coordinate with your software provider to be certain this notation is added to Schedule A. Until that is done, you will need to manually add this notation.

Please also note that DISB required that arbitration be removed from all policies. In order to use the ALTA policy forms, you will need to attach an endorsement with the following language:

"Any provisions in the Conditions of this Policy referring to arbitration are hereby deleted."

Please also note that in connection with purchases of owner occupied residential property where a loan policy will be issued but no owner's policy has been requested, the Producer must give the purchaser a "Notice of Availability" on a form approved by DISB.

The Stewart Title form was approved and is now available on Virtual Underwriter.

Title Insurance Rates

Under the new legislation, effective January 1, 2011, all rates must now be filed and approved by DISB. Recognizing the difficulty of implementing the rate approval procedures on such short notice, DISB recently issued guidance on how they plan to implement this requirement. That guidance can be found on the DISB web site at http://www.disb.dc.gov/disr/cwp/view,a,1300,q,645417.asp.

The guidance provides that the rates in effect as of December 1, 2010 will be deemed the Stewart Title approved rates until March 31, 2011. Once the Stewart Title rate filing is approved by DISB, those rates will go into effect on April 1, 2011. Accordingly, please continue to use the currently outstanding DC Rate Book for your title insurance premiums. This includes the required charge for the issuance of closing protection letters with one exception. The legislation now requires that we charge $50 for the issuance of a closing protection letter to a seller, refinancing borrower or buyer who is not purchasing title insurance.

Producer Licensing

Title insurance producers must obtain an insurance license to operate in the District within 180 days of January 1, 2011. Resident producers, with the exception of title attorneys, are required to pass an examination. Nonresident applicants will be granted licensure through reciprocity. Producer licenses are effective for a two-year period and expire on the birth month for an individual licensee, or on May 31, 2011, for firms. To renew the license, Title Insurance producers are required to obtain 16 hours of continuing education (CE) credits and title attorneys are required to obtain 8 hours of CE credits prior to the expiration of the license. To apply for licensure go to www.nipr.com.

We anticipate that most of our agents will be applying for a nonresident license. The legislation did not deal with a number of the practical issues such as differentiating between individual vs. entity licensing or title only vs. full service closing operations. Issues relating to these will include who must obtain the required fidelity bond and who must appoint an agent for service of process. Given the 180 day grace period and the uncertainty surrounding these issues, agents may want to wait to begin processing their licensing applications until we receive further guidance from DISB.

STG is now obligated to have on file proof that each of its producers is licensed in DC and to provide notice to DISB within 30 days of executing or terminating a contract with a Producer. Accordingly, once obtained, please immediately forward to your agency services representative a copy of your DC producer license so that STG can comply with its obligations.

If you have any questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.

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:
DC2010004 Regulation of Title Agents in the District of Columbia
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
DC Notice of Availability of Owner's Title Insurance