House Bill 725, effective October 1, 2012, changes the procedures regarding the State’s requirement that title insurance agents post a Surety bond in the amount of $35,000. Previously, the payee on the surety bond was the Department of Insurance and then more recently, the Department of Financial Services. With the passing of HB 725, the payee on the surety bond must now be your title insurance underwriter or underwriters. If you have more than one underwriter, each underwriter must be listed separately as named on the bond.
In accordance with the new law, Florida title insurance agents must provide written proof to the appointing underwriter or underwriters on an annual basis (evidencing by providing proof of coverage) that the surety bond is still in effect and unimpaired.
In addition, the option to post cash with DFS in lieu of purchasing a bond has been eliminated. In the event that you had chosen that option, you may request a return of your posted cash by submitting a Withdrawal of Collateral Form to DFS. A copy of the form is attached.
Since the law goes into effect October 1, 2012, and mandates that each title insurer have proof of coverage in its files to either appoint, retain or renew an agency appointment, it is critical that you take immediate steps to comply. Consequently, please instruct your surety bond provider to issue an endorsement of the bond or alternatively, issue a rider so that Stewart Title Guaranty Company, P.O. Box 2029, Houston, TX 77252-2029 is now named as the payee. For independent agents please have the endorsement or rider sent to Stewart Title Guaranty Company no later than October 1, 2012, at the below address.
Stewart Title has designated Evelyn Ayala as the local Agency Services representative in Florida responsible for assisting with facilitating the administrative needs and assistance necessary as required of Stewart Title Guaranty Company and its independent Florida title insurance agents to ensure compliance required under the new law. Her contact information is:
Stewart Title Guaranty Company
3401 W. Cypress Street
Tampa, FL 33607
Finally, the new law requires that if the surety bond is payable to multiple insurers, the surety bond must provide for each title insurer to be notified in the event a claim is made upon the surety bond or the bond is terminated. This notice will now have to be given by the surety bond company and if so required, you must give them permission to provide such notice.
For on-line viewing of the bulletin, log onto:http://specialalerts.stewart.com/
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.