No. 28507 (New Rule): R592-4. Standards for Charges for Title Escrow Settlement Services and Title Fees

DAR File No.: 28507
Filed: 02/13/2006, 02:37
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to set forth standards for creating the charges for title escrow settlement services and title fees for pass through services and other services submitted on the Schedule of Escrow Charges. This rule replaces Bulletin 99-6, Procedures for Filing Escrow, Settlement, and Closing Charges.

 

Summary of the rule or change:

This rule sets forth standards for creating the charges for title escrow settlement services and title fees submitted on the Schedule of Escrow Charges as required in Section 31A-19a-209. The rule sets forth definitions that apply to this specific rule, information to be contained in each filing, requirements as to how a filing is to be made, and how correspondence, inquiries and responses with and to the department are to be handled. A section of the rule references penalties for failure to comply with the law and rule, and another section makes the rule enforceable 90 days after its effective date.

 

State statutory or constitutional authorization for this rule:

Section 31A-19a-209

 

Anticipated cost or savings to:

the state budget:

This rule will not change the workload in the office enough to require the addition or reduction of our workforce, nor will it change department revenues.

 

local governments:

This rule does not affect local governments since it only deals with the relationship between the department and its licensed title and escrow agencies.

 

other persons:

If a title licensee is found to be charging less than their filed charges the licensee can be warned or fined. This will add additional protections to consumers by requiring title licensees to apply their charges equally and according to their cost of doing business. The fiscal impact of this rule will vary from one licensee to another. If the licensee's filed charges reflect their cost of doing business this rule will have no fiscal impact on them.

 

Compliance costs for affected persons:

If a title licensee is found to be charging less than their filed charges the licensee can be warned or fined. This will add additional protections to consumers by requiring title licensees to apply their charges equally and according to their cost of doing business. The fiscal impact of this rule will vary from one licensee to another. If the licensee's filed charges reflect their cost of doing business this rule will have no fiscal impact on them.

 

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

The fiscal impact of this rule will vary from one title agency to another based on the way they are conducting business now. If their filed charges reflect their cost of doing business, as required by the code, this rule will have no fiscal impact on them. D. Kent Michie, 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:

03/31/2006

 

Interested persons may attend a public hearing regarding this rule:

3/23/2006 at 10:00 AM, State Office Building, Room 1112, Salt Lake City, UT

 

This rule may become effective on:

04/01/2006

 

Authorized by:

Jilene Whitby, Information Specialist

 

 

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-4. Standards for Charges for Title Escrow Settlement Services and Title Fees.

R592-4-1. Authority.

This rule is promulgated by the Title and Escrow Commission pursuant to Section 31A-2-204.

 

R592-4-2. Purpose and Scope.

(1) The purpose of this rule is to set forth standards for creating the charges for title escrow settlement services and title fees for pass through services and other services submitted on the Schedule of Escrow Charges.

(2) This rule applies to all title insurers, agencies and producers providing escrow services in Utah.

 

R592-4-3. Definitions.

In addition to the definitions of Sections 31A-1-301, 31A-2-402 and 31A-19a-102, the following definitions shall apply for the purposes of this rule:

(1) "Additional escrow work" means escrow settlement services that are rendered in excess of the escrow settlement services not specifically shown in the escrow charges listed in the Schedule of Escrow Charges.

(2) "Charge" means a dollar amount charged for a service rendered by a title insurer, title agency, or title producer.

(3) "Document Preparation" means the preparation of documents in connection with escrow settlement services.

(4) "Escrow charge" means a dollar amount charged for an escrow service shown in the Schedule of Escrow Charges.

(5) "Schedule of Escrow Charges" means the standardized form submitted with a title escrow charge filing.

(6) "Escrow Settlement Services" means those services to settle real estate transactions.

(7) "Long-term Escrow" means For Benefit Of (FBO) accounts that are for the purpose of payment collection and administration of seller-financed transactions.

(8) "Marketing Information Package" means an information package, a listing kit, a farm package or any other form of title evidence beyond that which is readily available in public records in the county in which the property is located.

(9) "Mini Escrow" means an escrow settlement service done by a title agency to clear a title, obtain payoffs and record necessary closing documents for a lender that performs his or her own closing service.

(10) "Other Service Fee" means a fee for services performed or documents prepared that are neither a title insurance product nor an escrow settlement service.

(11) "Pass through fee" means a third-party fee incurred by the agency in connection with the settlement of real property transactions that are passed on to the appropriate principal party to the transaction.

 

R592-4-4. Schedule of Escrow Charges.

(1) The Schedule of Escrow Charges must be used when submitting:

(a) an initial Schedule of Escrow Charges filing; or

(b) changes to a previously submitted Schedule of Escrow Charges filing.

(2) All blank fields of the Schedule of Escrow Charges must be completed.

(3) If a filer does not perform a service, the blank field must show "N/A" or "Not Applicable."

 

R592-4-5. Charges.

(1) Escrow settlement service charges.

(a) Escrow charge.

(i) In accordance with 31A-19a-209(3), no escrow charge may be filed or used that would cause the agency or producer to operate at less than the cost of doing the business of escrow.

(ii) Only escrow charges shown in the Schedule of Escrow Charges must be filed.

(iii) Filed escrow charges are minimum charges.

(b) Additional escrow work charge.

(i) An additional escrow work charge will be used for escrow charges not specifically shown in the Schedule of Escrow Charges.

(ii) An additional escrow work charge must be filed as a per hour charge.

(c) Document preparation charge.

(i) Only document charges shown in the Schedule of Escrow Charges must be filed.

(ii) The additional escrow work charge will be used for preparation of documents not specifically shown in the Schedule of Escrow Charges.

(2) Marketing information package.

(a) A marketing information package charge can be no less than the cost to produce one copy of the marketing information package.

(b) A marketing information package charge will be stated as a per copy charge.

(c) Each separate marketing information package must have its own charge.

 

R592-4-6. Fees.

(1) Other service fee must be filed as a per hour fee.

(2) A pass through fee is:

(i) not filed; and

(ii) must be equal to the third-party fee for providing the service.

 

R592-4-7. Penalties.

A person found, after a hearing or other regulatory process, to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R592-4-8. Enforcement Date.

The commissioner will begin enforcing this rule 90 days from the rule's effective date.

 

R592-4-9. Severability.

If any provision of this rule or the application of it to any person or circumstance is for any reason held to be invalid, the remaining provisions to other persons or circumstances shall not be affected.

 

KEY: title escrow charges

Date of Enactment or Last Substantive Amendment: 2006

Authorizing, and Implemented or Interpreted Law: 31A-2-204