For the past several years we in the industry have enjoyed the administrative
simplicity of a Mutual Indemnification Agreement (MIA) whereby for certain
routine matters Underwriter's have been indemnifying each other in order
to provide better service to the customers of our industry. A new agreement
has now been prepared and has been joined in by every Underwriter doing business
in the state of Florida with the singular exception of American Pioneer, which
has declined to join in the new agreement. American Pioneer matters can still
be indemnified if they meet the standards of the earlier agreement.
The new agreement expands the use of the MIA in several ways. The following
is an outline of the new agreement.
General requirements for Reliance upon the revised Mutual Indemnification
Must retain for your files at least one of the following:
a)Owners Policy at least one (1) year old insuring the seller or mortgagor
in the current transaction; or,
b)Mortgagee Policy at least (1) year old insuring a lender who has taken title
to some or all of the covered land insured under the policy.
Matters covered automatically by the revised MIA:
a)Conveyances of a possible homestead without joinder of a spouse if the
grantor was married;
b)Liens arising from money judgments (but not a certificate of delinquency
for child support) and federal or state tax liens up to a face amount of $250,000.00.
c)Unsatisfied mortgages securing on their face no more than $250,000.00 so
long as it does not secure revolving credit or equity lines of credit.
d)Lack of guardians or attorneys ad litem to represent an absent defendant
or deficiencies in or absence of a diligent search affidavit (when required
by law) in any judicial proceeding ("The Case") which results
in a final, unappealable judgment affecting the title to the property; and,
e)Lack of or insufficient notice of record of the authority of an attorney
in fact or trustee to make a prior conveyance to the seller or mortgagor
in the current transaction so long as the indemnitor's policy insuring
the title without exception is at least one year old.
General Conditions of Coverage:
1)The indemnitor's policy must be at least one year old and contain
no exception for the subject title objection listed above;
2)There must be no record notice of any proceeding to enforce the judgment,
tax lien, or mortgage;
3)There must be no record notice of any proceeding to attack or set aside
the title resulting from the case or the conveyance referenced in items "(d)" or "(e)",
4)The amount of the automatic indemnity is limited to the Face Amount of
the indemnitor's policy or $250,000.00 whichever is LESS;
5)This indemnity is limited to policies issued on Florida properties only;
6)An indemnitor is the underwriter who has already issued its policy without
exception to the covered matter. An indemnitee is an underwriter whose policy
is issued in reliance upon the automatic indemnities given in the Revised MIA.
Note #1: A policy issuing agent should obtain permission from the underwriter
of the new policy (the proposed indemnitee) to rely upon the terms and provisions
of the Revised MIA before insuring over one or more of the defects referred
to in items a) through e), above.
Note #2: Nothing in the Revised MIA prevents an underwriter from issuing separate
letters of indemnity or refusing to indemnify in cases not covered under the
Revised MIA or requires any underwriter to issue a letter of indemnity, if
at all, within the time set for the closing.