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

DAR File No.: 38156
Filed: 01/21/2014 01:15:04 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being changed as a result of comments received during comment period and hearing for the proposed amendment.

Summary of the rule or change:

References to producers and agencies throughout the rule are being updated here to comply with the change in terminology in H.B. 47, Insurance Law Amendments, passed during the 2013 General Legislative Session. A new subsection has been added to Section R592-11-1 to require the maintenance of a physical address in Utah. Wording in Sections R592-11-1 and R592-11-2 has been added to define, specifically for this rule, an attorney. Section R592-11-3 corrects a code citation and requires expenses and the physical address of the Utah operation be reported in the Title Insurance Producer's Annual Report. Reporting the percentage of ownership of each owner must be reported in the Controlled Business Report and not the Title Insurance Producer's Annual Report. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed amendment that was published in the December 15, 2013, issue of the Utah State Bulletin, on page 34. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the change in proposed rule and the proposed amendment together to understand all of the changes that will be enforceable should the agency make this rule effective.)

State statutory or constitutional authorization for this rule:

• Section 31A-23a-413
• Subsection 31A-2-404(2)(a)
• Subsection 31A-23a-406(1)(g)
• Subsection 31A-23a-503(8)

Anticipated cost or savings to:

the state budget:

The changes to the rule will have no fiscal impact on the department. They will not require additional work over and above what is already being done, nor will they impact expenses and revenues.

local governments:

This rule will have no impact on local governments since the rule deals only with the relationship between the department and its licensees, in this case, title agencies and producers.

small businesses:

Except for the changes to terminology referring to producers and agents, the other changes being made clarify what has already in the law. The requirement to include the reporting of expenses along with title premium for endorsement income and escrow income is being included to verify profitability of each line. This information is already required in the Title Insurance Producer Annual Report. These changes should create no additional expense or workload to agencies or producers.

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

The only large businesses this rule impacts are large title insurance agencies and the producers that prepare the annual Title Insurance Producer Annual Report and the Controlled Business Report. The impact would be the same as noted under "Small businesses" above. Consumers and other businesses would not be impacted by the rule or its changes.

Compliance costs for affected persons:

Title agencies and producers will have no fiscal impact as a result of the changes to this rule. The changes are technical and for clarification purposes only.

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

The changes to this rule will have no fiscal impact on businesses in or outside of the state.

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:

03/03/2014

This rule may become effective on:

03/10/2014

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 agency title insurance producer, individual title insurance producer, and 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], 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[.]; and

(4) Subsection 31A-23a-406(1)(g), which requires the maintenance of a physical address in Utah.

 

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 agency title insurance producers, individual title insurance producers, and attorneys licensed to practice law in Utah, who are also individual title insurance producers not designated to a title insurance agency[as defined in R592-11-3].

 

R592-11-3. 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]3(2) :

(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.

(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 and expenses, shall be reported separately from the escrow income and expenses;

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

(c) proof of financial protection that complies with Subsection 31A-23a-204(2) shall consist 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[.]; and

(e) the physical address in Utah maintained by the agency title insurance producer or individual title insurance producer, pursuant to 31A-23a-406(1)(g).

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

(4) 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.

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

(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.

 

R592-11-4. 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.

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

(b) contain the name, address, and percentage of ownership of each owner.

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

 

R592-11-5. 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.

 

R592-11-6. Penalties.

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

 

R592-11-7. Enforcement Date.

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

 

R592-11-8. 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: 2014

Notice of Continuation: June 15, 2011

Authorizing, and Implemented or Interpreted Law: [31A-23-313; 31A-23-403]31A-2-404(2)(a); 31A-23a-406(1)(g); 31A-23a-413; 31A-23a-503(8)