No. 29995 (New Rule): R592-6. Split Closings in Title Insurance

DAR File No.: 29995
Filed: 05/31/2007, 06:46
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to set forth the requirements for conducting a split closing in title insurance.

Summary of the rule or change:

The rule establishes the requirements to conduct a split closing in title insurance.

State statutory or constitutional authorization for this rule:

Section 31A-2-404

Anticipated cost or savings to:

the state budget:

This rule will create no impact on the state budget. There will be no change in the fees, filings, or personnel as a result of this rule.

local governments:

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

other persons:

Title producers will need to complete a Split Closing Instruction at the time a split closing is conducted. As a result, it will add an additional form to be completed at that time. The form makes sure all parties to the transaction are aware of their responsibilities in the split closing.

Compliance costs for affected persons:

Title producers will need to complete a Split Closing Instruction at the time a split closing is conducted. As a result, it will add an additional form to be completed at that time. The form makes sure all parties to the transaction are aware of their responsibilities in the split closing.

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

This rule has no fiscal impact on consumers, producers or insurers. 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:

07/16/2007

Interested persons may attend a public hearing regarding this rule:

7/09/2007 at 9:00 AM, State Office Building (behind the Capitol), Room 4112, Salt Lake City, UT

This rule may become effective on:

07/23/2007

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-6. Split Closings in Title Insurance.

R592-6-1. Authority.

This rule is promulgated pursuant to Section 31A-2-404, which directs the Title and Escrow Commission to make rules to administer the provisions related to title insurance.

 

R592-6-2. Purpose and Scope.

(1) The purpose of this rule is to set forth the requirements for conducting a split closing in title insurance.

(2) This rule applies to all title licensees and applicants for a title insurance license or renewal of a title insurance license.

 

R592-6-3. Definitions.

For the purposes of this rule, the commissioner adopts the definitions in Sections 31A-1-301, 31A-2-402, and the following:

(1) "Courtesy closing" means:

(a) the signing of settlement documents for a real estate transaction; or

(b) the acceptance of monies for forwarding to the person conducting the escrow services to complete the real estate purchase.

(2) "Split closing" means a real estate transaction closing conducted:

(a) by two different persons providing a title insurance product; or

(b) one person providing a title insurance product and one person conducting a courtesy closing as defined herein; and

(c) in two separate locations.

(3) "Split Closing Instruction form" means the Split Closing Instruction form established by the Title and Escrow Commission and available at the department.

(4) "Title insurance product" means the insuring, guaranteeing, or indemnifying of owners of real or personal property or the holders of liens or encumbrances on that property, or others interested in the property against loss or damage suffered by reason of liens or encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity or unenforceability of any liens or encumbrances on the property.

(5) "Title insurance service" has the same meaning as the definition of "escrow" found in Subsection 31A-1-301.

 

R592-6-4. Split Closing Requirements, Processes and Procedures.

(1) A split closing may be conducted if:

(a) requested by the buyer, seller, or lender or an agent for the buyer, seller, or lender; and

(b) a Split Closing Instruction form is completed and executed by the buyer, seller, and persons conducting the split closing not later than the date of closing.

(2) Only persons issuing a title policy may:

(a) provide a title insurance service; and

(b) receive, deposit, and disburse monies.

(3) A person conducting a courtesy closing:

(a) may have real estate settlement documents signed; and

(b) may accept monies for forwarding to the person conducting the escrow services to complete the real estate purchase;

(i) monies collected via wire transfer may be deposited and must be forwarded within one business day of receipt; or

(ii) monies collected via any other method except wire transfer may not be deposited and must be forwarded when the signed real estate documents are forwarded.

 

R592-6-5. Severability.

If any section, term, or provision of this rule shall be adjudged invalid for any reason, such judgment shall not affect, impair or invalidate any other section, term, or provision of this rule and the remaining sections, terms, and provisions shall be and remain in full force.

 

R592-6-6. 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 Sections 31A-2-308 and 31A-2-405.

 

R592-6-7. Enforcement Date.

The commissioner will begin enforcing this rule calendar 15 days after the rule's effective date.

 

KEY: title split closings

Date of Enactment or Last Substantive Amendment: 2007

Authorizing, and Implemented or Interpreted Law: 31A-2-404