- December 05, 2005
- All Issuing Offices in Delaware
- Reduced Rate Notice and Affidavit Revisions
Recently the Department of Insurance approved changes to the "Title Insurance Rating Bureau of Delaware Rate Manual" which became effective November 1, 2005.
New Sections 2.8 and 2.9 are directly related to the revisions to Sections 3.3 and 3.7. Together these revisions clarify the circumstances under which a reduced rate applies to an owner's or loan policy issued within 5 years of previous title insurance on the same property. Sections 3.3 and 3.7 formerly provided that a reduced rate is applicable if "it can be demonstrated to the satisfaction of the Insurer that the property to be insured was previously insured ... within five (5) years prior to the application for new insurance". Sections 3.3 and 3.7 are worded "shall apply" making the reissue rate mandatory if the evidence of previous coverage falls within the provisions of New Section 2.8.
To assure that the prospective purchaser of title insurance is aware that a reduced rate may be applicable, New Section 2.9 requires the issuance of a notice prior to the date of closing, substantially in the following form:
IF THIS CONVEYANCE OR REFINANCE OCCURS WITHIN FIVE YEARS OF PREVIOUS TITLE INSURANCE OF THE SAME PROPERTY, YOU WILL BE ENTITLED TO A REDUCED TITLE INSURANCE RATE IF THE INSURER IS PROVIDED AT OR PRIOR TO CLOSING WITH A COPY OF A:
(A) PREVIOUS TITLE INSURANCE POLICY;
a. MARKED-UP TITLE INSURANCE COMMITMENT; OR
(B) SETTLEMENT SHEET THAT EVIDENCES PAYMENT OF A TITLE INSURANCE PREMIUM.
The Attorney's engagement letter will facilitate the compliance with this Notice requirement when the letter contains the notice and is then signed and returned.
Since some transactions do not utilize the attorney's engagement letter, compliance with this provision may be satisfied by incorporating this Notice in the title commitment and having the purchasers sign affidavits at settlement which also contain the Notice.
PLEASE REMEMBER THAT GIVING THE REDUCED RATES FOR QUALIFYING TRANSACTIONS IS MANDATORY.
We have included with this Bulletin the Manual replacement pages for immediate insertion in your Rate Manual.
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.