No. 38156 (Amendment): Rule R592-11. Title Insurance Producer Annual and Controlled Business Reports

(Amendment)

DAR File No.: 38156
Filed: 11/25/2013 04:11:22 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being amended to adopt legislative changes made in the 2013 General Legislative Session by H.B. 47, Insurance Law Amendments.

Summary of the rule or change:

Terminology referencing title agents and individual producers was changed in Subsection 31A-19a-209(1). New terminology is "individual title insurance producers" and "agency title insurance producers." Subsection 31A-23a-413 requires that in the Title Insurance Producer Annual Report, required to be filed by an agency title insurance producer and an individual title insurance producer, not designated by an agency, file with the department the financial condition, transactions and affairs of the agency title insurance producer or the individual title insurance producer, not designated by an agency. This rule change requires the agency title insurance producer, or individual title insurance producer not designated by a title insurance agency to indicate the name of the individual "qualifying licensee" pursuant to Subsection 31A-23a-204(1)(e). Additionally, this rule change requires the agency title insurance producer and individual title insurance producer not designated by an agency to provide in the Title Insurance Producer Annual Report the physical address maintained pursuant to Subsection 31A-23a-406(1)(g). Finally, the rule change requires agency title insurance producer and individual title insurance producers not designated by an agency title insurance producer to provide title income and expenses separate from escrow income and expenses.

State statutory or constitutional authorization for this rule:

• Section 31A-23a-413
• Subsection 31A-2-404(2)(a)
• Subsection 31A-23a-503(8)

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no fiscal impact on the state or department's budget.

local governments:

This rule deals solely with the relationship between the department and their title insurance licensees. It will have no impact on local governments.

small businesses:

The agency title insurance producer, or individual title insurance producer not associated with an agency, will be required to file electronically with SIRCON, the name of the individual they designate to file the Title Insurance Producer Annual Report with the department. The cost to designate an individual with SIRCON will be $3.75. Currently there are 158 licensed title agencies in Utah. The number of individual title insurance producers, not associated with an agency, is not known.

persons other than small businesses, businesses, or local governmental entities:

The changes to this rule would have no impact on title insurers or their customers. The changes strictly relate to title individuals and agencies.

Compliance costs for affected persons:

The agency title insurance producer, or individual title insurance producer not associated with an agency, will be required to file electronically with SIRCON, the name of the individual they designate to file the Title Insurance Producer Annual Report with the department. The cost to designate an individual with SIRCON will be $3.75. Currently, there are 158 licensed title agencies in Utah. The number of individual title insurance producers, not associated with an agency, is not known.

Comments by the department head on the fiscal impact the rule may have on businesses:

The changes to this rule will have insignificant fiscal impact on Utah businesses.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Title and Escrow Commission
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/14/2014

Interested persons may attend a public hearing regarding this rule:

• 01/13/2014 09:00 AM, Senate East Bldg, 420 N State St, Copper Room, Salt Lake City, UT

This rule may become effective on:

01/21/2014

Authorized by:

Todd Kiser, Commissioner

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-11. Title Insurance Producer Annual and Controlled Business Reports.

R592-11-1. Authority.

This rule is promulgated pursuant to:

(1) Section 31A-2-404(2)(a), which requires the Title and Escrow Commission (Commission) to make rules related to title insurance;

(2) Section 31A-23a-413, which requires the annual filing of a report by each title insurance producer, as defined in R592-11-3, containing a verified statement of the producer's financial condition, transactions, and affairs; and

(3) Subsection 31A-23a-503(8), which requires the annual filing of a controlled business report.

 

R592-11-2. Purpose and Scope.

(1) The purpose of this rule is to establish the form and filing deadline for the Title Insurance Producer Annual Report and Controlled Business Report required by Section 31A-23a-413 and Subsection 31A-23a-503(8)(a).

(2) This rule applies to all title insurance producers as defined in R592-11-3.

 

[R592-11-3. Definition.

For the purpose of this rule the Commission adopts the definitions as set forth in Sections 31A-1-301 and 31A-2-402 and the following:

(1) "Title insurance producer" includes:

(a) a title insurance agency as defined in 31A-1-301(6);

(b) an individual title producer not designated to a title insurance agency; and

(c) an attorney licensed to practice law in Utah who is also an individual title producer not designated to a title insurance agency.

 

]R592-11-[4]3. Title Insurance Producer Annual Report.

(1) The following shall file a Title Insurance Producer Annual Report containing the information shown in Subsection R592-11-4(2)

(a) an agency [T]title insurance producer[s];

(b) an individual title insurance producer not designated to an agency title insurance producer; and

(c) an attorney licensed to practice law in Utah, who is also an individual title insurance producer not designated to a title insurance agency[, as defined in R592-11-3, shall file a Title Insurance Producer Annual Report containing the information shown in subsection 2 below].

(2) A Title Insurance Producer Annual Report shall consist of:

(a) a balance sheet and an income and expense statement prepared and presented in conformity with generally accepted accounting principles;

(i) title premium, including endorsement income, shall be reported separately from the escrow income;

(b) the name and address of each financial institution where a title or escrow trust account is maintained;

(c) [unless the producer is an attorney exempted under 31A-23a-204(8), ]proof of financial protection that complies with Subsection 31A-23a-204(2) shall consist[ing] of one or more of the following:

(i) a copy of the declarations page of a fidelity bond;

(ii) a copy of the declarations page of a professional liability insurance policy; or

(iii) a copy of the commissioner's approval of equivalent financial protection; and approved by the commissioner;

(d) the name, address, and percentage of ownership of each owner[.]; and

(e) the name of the individual title insurance producer designated as the "qualifying licensee," as provided in 31A-23a-204.

(3) Subsection R592-11-4-(2)(c) does not apply to an attorney exempted under 31A-23a-204(8).

(4) [A title insurance producer, as defined in R592-11-3,]Agency title insurance producers, individual title insurance producers not designated to an agency title insurance producer and an attorney licensed to practice law in Utah, who is also an individual title insurance producer, not designated to a title insurance agency, shall file a Title Insurance Producer Annual Report not later than April 30 of each year.

[(4)](5) The Title Insurance Producer Annual Report period shall be the preceding calendar year.

[(5)](6) A Title Insurance Producer Annual Report will be considered protected data if the producer submitting the report requests classification as a protected record in accordance with Sections 63G-2-305 and 63G-2-309.

 

R592-11-[5]4. Controlled Business Report.

(1) The following shall file an annual Controlled Business Report not later than April 30 of each year:

(a) an agency title insurance producer;

(b) an individual title insurance producer not designated to an agency title insurance producer; and

(c) an attorney licensed to practice law in Utah, who is also an individual title insurance producer not designated to a title insurance agency[A title insurance producer, as defined in R592-11-3, shall file an annual Controlled Business Report not later than April 30 of each year].

(2) The Controlled Business Report period shall be the preceding calendar year and shall contain the information required in Subsection 31A-23a-503(8)(a).

(3) A Controlled Business Report is a public record upon filing.

 

R592-11-[6]5. Electronic Filing of Title Insurance Producer Annual Report and Controlled Business Report.

(1) The Title Insurance Producer Annual Report and the Controlled Business Report shall be submitted together electronically via email to [e-mail].

(2) The Title Insurance Producer Annual Report and the Controlled Business Report shall be submitted not later than April 30 of each year as attachments to the Title Insurance Agency Annual Reports Transmittal Form.

(3) The following report forms, which are available on the department's website, shall be used to submit the Title Insurance Producer Annual Report and the Controlled Business Report:

(a) Title Insurance Producer Annual and Controlled Business Reports Transmittal form; and

(b) Controlled Business Report form.

(4) Actual copies of the forms may be used or may be adapted to a particular word processing system, however, if adapted, the content, size, font, and format shall be similar.

 

R592-11-[7]6. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R592-11-[8]7. Enforcement Date.

The commissioner will begin enforcing this rule 5 days from the rule's effective date.

 

R592-11-[9]8. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, that invalidity shall not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: title insurance

Date of Enactment or Last Substantive Amendment: [May 19, 2009]2014

Notice of Continuation: June 15, 2011

Authorizing, and Implemented or Interpreted Law: 31A-23-313; 31A-23-403

 

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