Stewart Title Guaranty Company is filing an amended Schedule of Charges and Forms for Title Insurance in the State of California ("STGC Manual"). This STGC Manual is pending California Department of Insurance approval, anticipated to become effective on September 27, 2021; please post as required. Attached are the links for your convenience. (Click here to view a copy of the “Redline” and the “Accepted” versions).
The following is an overview of some of the more significant proposed changes to the STGC Manual. However, to best understand the changes and which apply to you, the STGC Manual itself should be read thoroughly and carefully in its entirety.
(1) Section 1.11 - Minimum Charges: clarification regarding minimum charges and additional charges in Section 9 Guarantees.
(2) Section 1.27 - Joint Protection Policies: the charge for the JPPs is changed to reflect the updated charges in Section 3.1.A.3. for the standard coverage concurrent loan rate.
(3) Section 2.9 - Optionee’s Policies: updates the name of the section to include reference to the available endorsement and clarification regarding the availability of an Option Endorsement.
(4) Section 2.17 - Binders: the changes include clarifications, changes to rates and change to the binder term as follows:
a. There is clarification regarding the charges for issuance of a binder, i.e., a binder fee in addition to the charge for the calculated policy.
b. The fee for the issuance of the final title policy is increased and the changes clarify that this fee is charged at the time of issuance of the final title policy.
c. The term of the interim binder in a sale transaction is changed from 3 years to 2 years; two extensions remain available.
d. Subsections B and C are updated for clarification and consistency with subsection A.
(5) Section 2.20 - Major Transactions: the changes include clarifications and changes for consistency and changes to rates as follows:
a. References within this section to CLTA and ALTA are updated to reflect standard and extended coverage.
b. The charge in subsections B.1.a., B.2.a. and B.2.c. are changed to reflect the updated charges in Section 3.1.A.3. for the standard coverage concurrent loan rate.
(6) Section 3.1 - Lender’s Title Insurance Rates: the changes include clarification and change to the rates as follows:
a. Concurrent loan rates for standard loan coverage is increased.
b. Concurrent loan rates for extended loan coverage is simplified, i.e., is now a chart rather than a complicated calculation, and is increased; see new Section 11.6 ALTA Concurrent Loan Rates.
c. The addition of charges for increased liability, is included in all applicable subsections in Section 3.1.
(7) Section 3.6 - Refinance Rate: the changes simplify the refinance rates for residential transactions to be more consistent with the refinance rates for basic, non-residential transactions. Accordingly, Sections 11.4 and 11.5 are removed from the Manual and Section 3.6A. (1) and (2) are simple calculations, i.e., 80% and 70% of the Section 11.2 Residential Rate for ALTA and CLTA coverages respectively.
(8) Section 3.9 - Multiple Loan Policies: the charge for multiple loans is changed to reflect the updated charges in Section 3.1.A.3. for the standard coverage concurrent loan rate.
(9) Section 3.19 - Centralized Processing Loan and Refinance Rate: the charge for the two largest liability tiers is decreased to reflect the intent of this section, i.e., to be a discounted refinance rate for the ALTA Short-Form Residential Loan Policy with generic exceptions when the transaction qualifies for this program.
(10) Section 3.21 - Stewart Title Absolute Rate: the charge for the liability tiers exceeding three million dollars are decreased to reflect the intent of this section, i.e., to be a discounted refinance rate, when the transaction qualifies for this program.
(11) Section 4 - Commercial Leasehold Insurance: clarification that this section applies unless qualifying for charges under Section 2.20 Major Transactions.
(12) Section 8.2 - Credit for Preliminary Reports on Subsequent Policies: the credit for preliminary reports on subsequent policies is reduced for policies within 12 months of issuance and there is no longer any credit for preliminary reports older than 24 months.
(13) Section 9 - CLTA Guarantees: there are a number of changes, increase of most charges, and some clarifications to this section including:
a. The changes make clear that Section 1.2 and Section 1.11 additional charges may apply as additional charges for all transactions priced under Section 9 CLTA Guarantees.
b. There are simplifications in calculations and corresponding increase in charges for a number of sections including 9.3 Mechanics’ Lien Guarantee, 9.4 Judgment and Tax Lien Guarantee, 9.6 Lot Book Guarantee, 9.8 Record Owner Guarantee, 9.10 Plant Information Guarantee, and 9.14 Recorded Document Guarantee.
c. Section 9.2 - there is clarification of the transactions where the charge for the product is “no charge” and there is an increase in the charge for the product.
d. Section 9.5 - Personal Property Encumbrance Guarantee: the addition of the limitation of liability.
e. Section 9.13 - Property Owner’s Notice Guarantee: there is a simplification in the calculation and corresponding increase and the addition of the limitation of liability.
f. Section 9.15 - Condition of Title Guarantee: there is a new credit towards the issuance of a title policy following the purchase of a Condition of Title Guarantee and the charge for the product is increased.
(14) Section 10 - Endorsements: there are a number of changes reflecting the corresponding changes to the ALTA endorsements, the names of the STG-specific endorsements have been updated and there is clarification regarding the per-issuance charge for endorsements, how to round charges under this section, and an explanation of what is intended by standard and extended under the Insured columns. The following specific endorsements were updated:
a. CLTA 138-06 (ALTA Form 33-06) is updated to include a choice in pricing: a per endorsement charge or a flat rate which includes a specified number of endorsement issuances in the flat fee.
b. CLTA 149-06 (ALTA Form 46-06) is corrected to only be applicable with standard coverage owner’s policies.
(15) Section 11.4 - ALTA Refinance Rates: deleted; see item number 5.
(16) Section 11.5 - ALTA Refinance Rates: deleted; see item number 5.
(17) Section 11.6 - ALTA Concurrent Loan Rates: this is a newly added chart.
PLEASE NOTE: Look for another filing of the STGC Manual after the anticipated CLTA adoption of the 2021 ALTA forms; this should occur shortly after this filing becomes effective.
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