No. 35648 (5-year Review): Rule R592-14. Delay or Failure to Record Documents and the Insuring of Properties with the False Appearance of Unmarketability as Unfair Title Insurance Practices

DAR File No.: 35648
Filed: 01/10/2012 11:25:08 AM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-404(2) authorizes the Title and Escrow Commission to write rules related to rating standards and methods, licensing requirements, continuing education requirements examination procedures, and standards of conduct for a title licensee. This rule relates to standards of conduct in the recording of documents and insuring of properties.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

The department received one written request for a hearing during a comment period on DAR No. 34258. It was suggested that Subsection R592-14-4(B) be eliminated due to perceived violation that would occur if old trust deeds were insured. After discussion with other members of the title industry and the department, it was determined that Subsection R592-14-4(A) resolved the concerns expressed. Another concern that arose was whether underwriters or the department should set the standard of what is insurable. The changes to this rule were then allowed to lapse to allow for further discussion. Proposed changes were again made to the rule (DAR No. 34931), a comment period provided that drew no comments for or against.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule is important to prohibit intentional delay, neglect, or refusal by insurers to record or deliver for recording, documentation necessary to support policy insuring provisions, resulting in the false appearance of unmarketability, in the record only, of property which would otherwise be marketable. This practice is deemed to be an unfair or deceptive act or practice detrimental to free competition in the business of insurance and is injurious to the public. Therefore, this rule should be continued. See the comment summary above for comments made regarding the rule.

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]

Authorized by:

Jilene Whitby, Information Specialist

Effective:

01/10/2012

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