No. 31341 (New Rule): R592-9. Title Insurance Recovery, Education, and Research Fund Assessment Rule

DAR File No.: 31341
Filed: 04/30/2008, 03:08
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purposes of this new rule are to: 1) establish the amounts for individual title insurance producer assessments; and 2) establish the amounts for title insurance agency assessments.

Summary of the rule or change:

The rule provides a process for the Title and Escrow Commission to set the individual producer and agency assessment amounts for the on-going funding of the Title Insurance Recovery, Education, and Research Fund.

State statutory or constitutional authorization for this rule:

Sections 31A-41-202 and 31A-2-308

Anticipated cost or savings to:

the state budget:

The costs to state government are one-time minimal costs to establish the Fund in the Insurance Department's accounting system and in the state's accounting system. The minimal costs associated with the day-to-day operation of the Fund will be absorbed by the existing staff of the Insurance Department.

local governments:

There is no cost to local government because this rule does not affect local government.

small businesses and persons other than businesses:

There should be minimal cost, if any, to small businesses (title agencies) because the annual assessment will be offset by the deletion of the requirement to maintain a reserve account of 1% of the title agency's written title insurance premium.

Compliance costs for affected persons:

The statute provides a maximum assessment ceiling and directs the Title and Escrow Commission to set the actual assessment each year. The statute repeals the current requirement for a title agency to set aside 1% of its written title insurance premium each year. In many cases, the annual assessment for a title agency for the Recovery Fund will be less than 1% of their written title insurance premium. Individual title insurance producers will pay their assessment of less than $20 once every 2 years when they renew their license.

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

This rule should have a minimal impact on businesses (title insurance agencies) because the annual assessment will be offset by the deletion of the requirement to maintain a reserve account of 1% of the title agency's written title insurance premium. 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:

06/16/2008

Interested persons may attend a public hearing regarding this rule:

6/09/2008 at 10:00 AM, State Capitol Complex, East Building, 420 N State St, Beehive Room, Salt Lake City, UT

This rule may become effective on:

06/23/2008

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-9. Title Insurance Recovery, Education, and Research Fund Assessment Rule.

R592-9-1. Authority.

This rule is promulgated pursuant to Section 31A-41-202 which requires the Title and Escrow Commission to determine the amount of required assessments from individual title insurance producers and title insurance agencies to provide funding for the recovery, education, and research fund.

 

R592-9-2. Purpose and Scope.

(1) The purpose of this rule is:

(a) to establish the amounts for individual title insurance producer assessments; and

(b) to establish the amounts for title insurance agency assessments.

(2) This rule applies to all individual title insurance producer applicants and licensees and all title insurance agency license applicants and licensees and any unlicensed person doing the business of title insurance.

 

R592-9-3. Establishing Assessment Amounts.

(1) Prior to July 1 of each year, the Commission shall establish the assessment amounts for:

(a) an initial producer license for an individual title insurance producer applicant;

(b) a renewal license for a licensed individual title insurance producer;

(c) an initial agency license for a title insurance agency applicant; and

(d) an annual assessment for a licensed title insurance agency.

(2) Annual licensed title insurance agency assessment amounts shall be established for the following four premium bands of title insurance premiums:

(a) Band A: $0 to $1 million;

(b) Band B: more than $1 million to $10 million;

(c) Band C: more than $10 million to $20 million; and

(d) Band D: more than $20 million.

(3) The individual producer and agency assessment amounts shall be adopted by motion of the Commission.

(4) The adopted assessment amounts shall be posted on the Insurance Department's web page.

 

R592-9-4. Individual Title Insurance Producer Assessment.

(1) Beginning July 1, 2009:

(a) A person applying for an initial individual title insurance producer license or a licensed individual title producer adding an additional title insurance line of authority shall pay an assessment not to exceed $20.00 at the time of application; and

(b) a licensee renewing an individual title insurance producer license shall pay an assessment not to exceed $20.00 at the time of application.

(2) An individual title insurance producer assessment will be paid in accordance with R590-102, Insurance Department Fee Payment Rule.

 

R592-9-5. Title Insurance Agency Assessment.

(1) Beginning July 1, 2008, a person applying for an initial title insurance agency license shall pay an assessment of $1,000 at the time of application.

(2) Beginning January 1, 2009, a licensed title insurance agency shall pay an annual assessment.

(3) An agency's placement in one of the four assessment bands will be determined by an agency's title insurance written premium volume for the preceding calendar year as of December 31 of that calendar year.

(4) An agency's annual assessment will be paid in accordance with R590-102, Insurance Department Fee Payment Rule.

 

R592-9-6. 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.

 

R592-9-7. Enforcement Date.

The commissioner will begin enforcing this rule July 1, 2008.

 

R592-9-8. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, such invalidity may 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 recovery fund assessment

Date of Enactment or Last Substantive Amendment: 2008

Authorizing, and Implemented or Interpreted Law: 31A-2-308; 31A-41-202