No. 39631 (Amendment): Rule R592-11. Title Insurance Producer Annual and Controlled Business Reports

(Amendment)

DAR File No.: 39631
Filed: 08/31/2015 11:40:32 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The changes contained in the rule are made in response to H.B. 352, Title Insurance Reporting and Assessment Amendments, which was passed during the 2015 General Session.

Summary of the rule or change:

H.B. 352 was amended to exempt attorneys from annual reporting requirements if they issued 12 or fewer title insurance policies during a 12-month period. The amendments to Rule R592-11 clarify language regarding who is required to file annual reports.

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:

There will be no cost or savings to the state budget because the majority of title insurance producers will still be required to file annual reports. The number of those exempted by H.B. 352 and this rule is so slight that it will have no impact on state employee work time.

local governments:

There will be no cost or savings to local government because the rule governs reporting requirements between individual title insurance producers and the state.

small businesses:

There will be no cost or savings to small businesses because the rule governs reporting requirements between individual title insurance producers and the state.

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

An individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency title insurance producer may have one fewer annual report to produce. Any savings will come as a result of decreased work time.

Compliance costs for affected persons:

There are no compliance costs for any persons. The net effect of the rule is to reduce annual report filing requirements on title insurance producers that meet certain circumstances. The requirements will remain unchanged for most title insurance producers.

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

This rule amendment was requested and passed by the Utah Title and Escrow Commission at its August meeting. The changes to this rule will have no impact on businesses because it is a regulatory rule that governs how title insurance licensees file reports with 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:

• Steve Gooch 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:

10/15/2015

This rule may become effective on:

10/22/2015

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 containing a verified statement of the financial condition, transactions, and affairs by [each]an agency title insurance producer[,] and an individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency 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, containing a verified statement of the producer's financial condition, transactions, and affairs];

(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 ]an agency title insurance producer[s,] and an individual title insurance producer[s] who is not an employee of a title insurer or who has not been designated to an agency title insurance producer[, and attorneys licensed to practice law in Utah, who are also individual title insurance producers not designated to a title insurance agency].

 

R592-11-3. Title Insurance Producer Annual Report.

(1) The following shall file a Title Insurance Producer Annual Report not later than April 30 of each year if they have conducted title insurance business in the State of Utah within the time period described in R592-11-3(4)[containing the information shown in Subsection R592-11-3(2)]:

(a) an agency title insurance producer; and

(b) an individual title insurance producer who is not an employee of a title insurer or who has not been 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 approved by the commissioner;

(d) 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 R592-11-3-(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]4) The Title Insurance Producer Annual Report period shall be the preceding calendar year.

([6]5) 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 that conduct title insurance business in the State during the time period described in R592-11-4(2)(a) shall file an annual Controlled Business Report not later than April 30 of each year:

(a) an agency title insurance producer; and

(b) an individual title insurance producer who is not an employee of a title insurer or who has not been 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 45 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: [March 10, 2014]2015

Notice of Continuation: June 15, 2011

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

 

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