In an effort to facilitate the process and perhaps demystify the issues
surrounding the topic of reinsurance, this Bulletin will both provide some
basic information as to why and when reinsurance is required in connection with
any given transaction and introduce our more concise Reinsurance
As you may know, any title insurance company is limited as to the amount of
liability it may assume in any single transaction. This is commonly known as a
“single risk retention limit”. That amount, for each insurer, is determined in
one of two ways. First, there is a mathematical formula, mandated by statute,
that uses certain financial data of the company and the resultant calculation is
the single risk retention limit for that company. Alternatively, a company may
choose to impose a single risk retention limit upon itself that is less than the amount that may result from the statutory
formula. Here at STIC, we have a self-imposed single risk retention limit
currently set at $13,000,000.00.
Please note, however, that this does not mean that STIC is limited to issuing policies
of no more than $13,000,000. Subject to underwriting approval, any STIC office
may issue its policy in excess of that amount, provided that the reinsurance
issue is addressed.
Reinsurance becomes necessary in one of two ways. Either a company is asked
to issue a policy in an amount in excess of its single risk limit or an insured
mandates that any particular insurer can only assume a certain amount of a given
risk (which amount could be less than what a company may normally hold) and, in
either case, the excess liability must be reinsured with another company. In
most cases, STIC will look to Stewart Title Guaranty Company to place its
reinsurance. This is a relatively simple process, somewhat routine, however, it
must be stressed, it is also an absolutely necessary prerequisite to the
issuance of any policy with a liability amount over our single risk limit.
To reiterate the procedure, in any instance where your office will issue its
policy in amount in excess of $13,000,000, please advise this office as
1. A Reinsurance Questionnaire, a copy of which
is attached for your use and reference, must be completed and sent to Haydee
Rodriguez, Reinsurance Administrator, prior to closing. The form should be
accompanied by a copy of the report of title or proposed policy to be issued in
connection with the transaction. If necessary, the form may be accompanied by a
separate writing containing any additional details of the transaction,
including, but not necessarily limited to, the existence of any unusual risks
which may pertain.
2. If the amount of insurance requested exceeds
your office's underwriting authority, a Policy Approval Form
must also be submitted and approved. That form, together with a
copy of the title report should be emailed to HighLiPolicy@stewart.com or
faxed to (212) 983-1133.
3. Copies of final policies, together with all endorsements, are to be
submitted to the Reinsurance Department as soon possible, once the closing has
been completed. Please note that this request for copies of polices is in
addition to the copies submitted with your monthly remittance.
This procedure is also to be followed in cases where the amount of insurance
requested is less than $13,000,00 but the insured nevertheless requests
If you have any questions at all regarding the procedure, the completion of
the forms or any other aspect of our reinsurance requirements, please do not
hesitate to call. Thank you for your anticipated cooperation.