No. 36080 (New Rule): Rule R592-17. Minimum Mandatory Search Standards and Requirements

(New Rule)

DAR File No.: 36080
Filed: 04/16/2012 04:05:58 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish guidelines, pursuant to Subsection 31A-23a-406(8), for title insurance producers conducting searches on real estate located in the state of Utah.

Summary of the rule or change:

This rule establishes guidelines, pursuant to Subsection 31A-23a-406(8), for title insurance producers conducting searches on real estate located in the state of Utah.

State statutory or constitutional authorization for this rule:

• Section 31A-2-404
• Section 31A-23a-406

Anticipated cost or savings to:

the state budget:

The rule sets standards of search for real estate located within Utah. The rule may have some fiscal impact on the department's budget if agencies require more of their staff to be licensed as title producers and more of their producers get a search line of authority license so they can do the searches as required by rule. Licensing is handled electronically by a vendor so no additional work will be required of department staff. A new producer license costs $70 and a search line of authority costs $25. Currently there are around 80 title agencies licensed in Utah. There is no indication how many, if any, will require additional licensing of their staff as a result of this rule. No form and rate filings will be required.

local governments:

This rule will have no impact on local government since it deals solely with the relationship between the department and their licensees and their customers.

small businesses:

This rule affects the way searches are done on real estate located in Utah by title agencies and producers. Almost all title agencies are small businesses. The rule requires that the title search be done by a producer with a title license and search line of authority or that such person directly supervise a non-licensed individual in this search. It also requires more extensive searches in some situations. The new search standards could cause some agencies to have more of their people licensed and may increase the cost of a search to cover the more extensive searches that will be required. The license to become a new producer will cost $70 and a search line of authority will cost $25. Any increased costs for more extensive searches will create revenue for the agency. Since there is no set price for a search industry wide the impact on individual agencies will vary. Some agencies may already be performing the extensive searches in the manner required by the rule and will have no additional expense or income as a result of the rule.

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

Some individuals or businesses purchasing property in Utah may have to pay a higher search fee if their title producer is required to do a more extensive search as a result of this rule. The cost will vary from agency to agency.

Compliance costs for affected persons:

Title agencies may decide to have non-licensed staff licensed, and may require some of their producers to obtain a limited line search license to more easily fulfill the search requirements of this rule. A title producer license is $70 and a search limited line is $25 for a two year period. Agencies that are not doing the more extensive searches now and who will need to, they likely will increase the cost of the search to cover the additional time required to do the search. This will mean increased income for the agency and an additional cost to the individual or business purchasing the property. The cost for the search will vary from agency to agency.

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

The cost of compliance to this rule will differ from agency to agency, depending on their current procedures.

Neal T. Gooch, 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:

05/31/2012

Interested persons may attend a public hearing regarding this rule:

• 05/14/2012 09:00 AM, East Building, 420 N State Street, Spruce Room, Salt Lake City, UT

This rule may become effective on:

06/07/2012

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-17. Minimum Mandatory Search Standards and Requirements.

R592-17-1. Authority.

This rule is promulgated pursuant to Subsection 31A-2-404(2)(a), which directs the Title and Escrow Commission to make rules for the administration of the provisions of Title 31A related to title insurance; and Subsection 31A-23a-406(8) pertaining to minimum mandatory search standards.

 

R592-17-2. Purpose and Scope.

(1) The purpose of this rule is to establish guidelines, pursuant to 31A-23a-406(8), for title insurance producers conducting searches on real estate located in the state of Utah.

(2) This rule applies to all title insurance licensees.

 

R592-17-3. Definitions.

"Minimum mandatory search" means a search and examination conducted by:

(1) a person licensed with a title search line of authority in the state of Utah has, for the purpose to issue title commitments, policies, endorsements, guarantees and other insurance products:

(a) inspected the applicable land, title, and other records within the jurisdiction relating to the ownership of the real property; or

(b) directly supervises a non-licensed individual to inspect the applicable land, title, and other records within the jurisdiction relating to the ownership of the real property; and

(2) a person licensed with a title search line of authority in the state of Utah has, for the purpose to issue title commitments, policies, endorsements, guarantees and other insurance products, examined the applicable documents within the chain of title.

 

R592-17-4. Counter Signature.

Any title commitments, policies, endorsements, guarantees and other insurance products issued by a title insurance licensee shall be countersigned by a title insurance licensee with a title search line of authority in the state of Utah which counter signature certifies that the title insurance licensee has performed a minimum mandatory search.

 

R592-17-5. Enforcement Date.

The commissioner will begin enforcing this rule upon the rule's effective date.

 

R592-17-6. Severability.

If any provision of this rule or its application to any person or situation is held to be 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: 2012

Authorizing, and Implemented or Interpreted Law: 31A-2-404; 31A-23a-406

 

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