- January 27, 2015
- All Maryland Issuing Offices
- UNDERWRITING - Maryland Title Insurance Licensing Issues
This Bulletin is directed primarily at out-of-state Stewart Title agencies that do business in Maryland. It also addresses license renewal problems that are being encountered by a large number of Maryland title insurance licensees.
I. Requirement for a Maryland Attorney to Prepare Certain Documents:
Although Maryland is not usually thought of as an "attorney state", in the sense that many clerical aspects of a title insurance transaction may be performed legally by non-attorneys, MD Real Property §3-104(f)(1) requires the following:
"No deed, mortgage, or deed of trust may be recorded unless it bears the certification of an attorney at law that the instrument has been prepared by an attorney or under an attorney’s supervision, or a certification that the instrument was prepared by one of the parties named in the instrument."
The word "attorney", as used in this statute, means an attorney authorized to practice law in Maryland. See the following Office of Attorney General correspondence for additional guidance:
Common forms of the required certification include the following:
I hereby certify that the within instrument was prepared by, or under the supervision of, an attorney at law duly admitted to practice before the Court of Appeals of Maryland.
[Signature of attorney must be placed here]
Typed name of attorney at Law
I hereby certify that the within instrument was prepared by a party to this instrument.
[Signature of party must be placed here]
Typed name of the party to the instrument
In addition to possible rejection of a document by the City/County recording office for lack of a proper certification, the improper preparation of a deed, mortgage or deed of trust could subject the author of the document to sanctions by Maryland authorities for the unauthorized practice of law.
II. License Required In Order to Perform Closings in MD:
Effective July 1, 2010, Maryland mandated the use of "title insurance producer independent contractors", also known as "TIPICs", to perform closings. It is no longer permissible for an independent notary public to conduct a closing if the notary isn’t also a licensed Maryland title insurance producer.
In order to become a TIPIC, an individual must first obtain a Maryland title producer’s license. This requires completion of a 30-hour course of instruction, and passing the same licensing examination required of individual Maryland title producers. As a practical matter, a TIPIC must also be a licensed Maryland notary public, since certain closing documents will have to be notarized.
Under MD Insurance §10-121.1, a TIPIC must hold an appointment with the title insurer (i.e., the underwriter) that is insuring the transaction, and must be covered by the title producer business entity’s ("TBPE") blanket fidelity bond and blanket surety bond. Further, whenever the services of a TIPIC are utilized, any mortgage or deed of trust must include:
- the name, address, and license number of the TIPIC; and
- the name of the TPBE for which the TIPIC is acting.
Be aware that any TPBE that hires a TIPIC is considered the principal of the TIPIC, and is legally responsible for the acts of the TIPIC which occur within the scope of the TIPIC’s services. Therefore, it as advisable to hire only experienced and knowledgeable TIPICs at all times.
III. License Renewal Roadblocks:
It has come to Stewart Title’s attention that the Maryland Insurance Administration ("MIA") has been taking a very close look at license renewals for TPBEs.
Prior to renewing a TPBE license, MIA has been looking for active, individual title producer licenses, as follow:
- If the TPBE is acting as a partnership, each partner must hold a title producer’s license and be appointed by the title insurer (an underwriter)
- If the TPBE is acting as a corporation, each controlling owner and each officer must hold a license to act as a title insurance producer, and must be appointed by the title insurer; and
- If the TPBE is acting as an LLC, each individual who has direct control over its fiscal management and each manager must be licensed as a title insurance producer and be appointed by the title producer.
These requirements are identical to those required of new licensees under MD Insurance §10-121. Additional guidance can be found in MIA Bulletin 13-17, at the following link:
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.
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.