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Public Act 095-0570
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| HB1319 Enrolled |
LRB095 07310 KBJ 27449 b |
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AN ACT concerning insurance.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Title Insurance Act is amended by changing |
Section 3 and by adding Section 18.1 as follows:
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(215 ILCS 155/3) (from Ch. 73, par. 1403)
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Sec. 3. As used in this Act, the words and phrases |
following shall
have the following meanings unless the context |
requires otherwise:
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(1) "Title insurance business" or "business of title |
insurance" means:
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(A) Issuing as insurer or offering to issue as insurer |
title insurance;
and
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(B) Transacting or proposing to transact one or more of |
the following
activities when
conducted or performed in |
contemplation of or in conjunction with the issuance
of |
title insurance;
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(i) soliciting or negotiating the issuance of |
title insurance;
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(ii) guaranteeing, warranting, or otherwise |
insuring the correctness of
title
searches for all |
instruments affecting titles to real property, any |
interest in
real property, cooperative units and |
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proprietary leases, and for all liens or
charges |
affecting the same;
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(iii) handling of escrows, settlements, or |
closings;
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(iv) executing title insurance policies;
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(v) effecting contracts of reinsurance;
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(vi) abstracting, searching, or examining titles; |
or
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(vii) issuing insured closing letters or closing |
protection letters;
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(C) Guaranteeing, warranting, or insuring searches or |
examinations of
title to real property or any interest in |
real property, with the exception of
preparing an |
attorney's opinion of title; or
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(D) Guaranteeing or warranting the status of title as |
to ownership of or
liens on real property and personal |
property by any person other than the
principals to the |
transaction; or
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(E) Doing or proposing to do any business substantially |
equivalent to any
of the activities listed in this |
subsection,
provided that the preparation of an attorney's |
opinion
of title pursuant to paragraph (1)(C) is not |
intended to be within the
definition of "title insurance |
business" or "business of title insurance".
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(1.5) "Title insurance" means insuring, guaranteeing, |
warranting, or
indemnifying owners of real or personal property |
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or the holders of liens or
encumbrances thereon or others |
interested therein against loss or damage
suffered by reason of |
liens, encumbrances upon, defects in, or the
unmarketability of |
the title to the property; the invalidity or
unenforceability |
of any liens or encumbrances thereon; or doing any business in
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substance equivalent to any of the foregoing.
"Warranting" for |
purpose of this provision shall not
include any warranty |
contained in instruments of encumbrance or conveyance.
Title |
insurance is a single line form of insurance, also known as |
monoline. An attorney's opinion of title pursuant to paragraph |
(1)(C) is not intended to
be within the definition of "title |
insurance".
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(2) "Title insurance company" means any domestic company |
organized under
the laws of this State for the purpose of |
conducting the business of
title insurance and any title |
insurance
company organized under the laws of another State, |
the District of Columbia
or foreign government and authorized |
to transact the business of
title insurance in this State.
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(3) "Title insurance agent" means a person, firm, |
partnership,
association, corporation or other legal entity |
registered by a title
insurance company and authorized by such |
company to determine insurability
of title in accordance with |
generally acceptable underwriting rules and
standards in |
reliance on either the public records or a search package
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prepared from a title plant, or both, and authorized in |
addition to do any
of the following: act as an escrow agent, |
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solicit title insurance, collect
premiums, issue title |
reports, binders or commitments to insure and
policies in its |
behalf, provided, however, the term "title insurance agent"
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shall not include officers and salaried employees of any title |
insurance
company.
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(4) "Producer of title business" is any person, firm, |
partnership,
association, corporation or other legal entity |
engaged in this State in the
trade, business, occupation or |
profession of (i) buying or selling
interests in real property, |
(ii) making loans secured by interests in real
property, or |
(iii) acting as broker, agent, attorney, or representative of
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natural persons or other legal entities that buy or sell |
interests in real
property or that lend money with such |
interests as security.
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(5) "Associate" is any firm, association, partnership, |
corporation or
other legal entity organized for profit in which |
a producer of title
business is a director, officer, or partner |
thereof, or owner of a
financial interest, as defined herein, |
in such entity; any legal entity
that controls, is controlled |
by, or is under common control with a producer
of title |
business; and any natural person or legal entity with whom a
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producer of title business has any agreement, arrangement, or |
understanding
or pursues any course of conduct the purpose of |
which is to evade the
provisions of this Act.
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(6) "Financial interest" is any ownership interest, legal |
or beneficial,
except ownership of publicly traded stock.
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(7) "Refer" means to place or cause to be placed, or to |
exercise any
power or influence over the placing of title |
business, whether or not the
consent or approval of any other |
person is sought or obtained with respect
to the referral.
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(8) "Escrow Agent" means any title insurance company or any |
title
insurance agent, including independent contractors of |
either, acting on behalf of a title insurance company which
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receives deposits, in trust, of funds or documents, or both, |
for the purpose
of effecting the sale, transfer, encumbrance or |
lease of real property to
be held by such escrow agent until |
title to the real property that is the
subject of the escrow is |
in a prescribed condition. An escrow agent conducting closings |
shall be subject to the provisions of paragraphs (1) through |
(4) of subsection (e) of Section 16 of this Act.
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(9) "Independent Escrowee" means any firm, person, |
partnership,
association, corporation or other
legal entity, |
other than a title insurance company or a title insurance
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agent, which receives deposits, in trust, of funds or |
documents, or both, for
the purpose of effecting the sale, |
transfer, encumbrance or lease of real
property to be held by |
such escrowee until title to the real property that
is the |
subject of the escrow is in a prescribed condition. Federal and
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State chartered banks, savings and loan associations, credit |
unions,
mortgage bankers, banks or trust companies authorized |
to do business under
the Illinois Corporate Fiduciary Act, |
licensees under the Consumer
Installment Loan Act, real estate |
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brokers licensed pursuant to the Real
Estate License Act of |
2000, as such Acts are now or hereafter amended, and
licensed |
attorneys when engaged in the attorney-client relationship are
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exempt from the escrow provisions of this Act. "Independent |
Escrowee" does not include employees or independent |
contractors of a title insurance company or title insurance |
agent authorized by a title insurance company to perform |
closing, escrow, or settlement services.
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(10) "Single risk" means the insured amount of any title |
insurance
policy, except that where 2 or more title insurance |
policies are issued
simultaneously covering different estates |
in the same real property, "single
risk" means the sum of the |
insured amounts of all such title insurance
policies. Any title |
insurance policy insuring a mortgage interest, a claim
payment |
under which reduces the insured amount of a fee or leasehold |
title
insurance policy, shall be excluded in computing the |
amount of a single
risk to the extent that the insured amount |
of the mortgage title insurance
policy does not exceed the |
insured amount of the fee or leasehold title
insurance policy.
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(11) "Department" means the Department of Financial and |
Professional Regulation.
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(12) "Secretary" means the Secretary
of Financial and |
Professional Regulation.
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(13) "Insured closing letter" or "closing protection |
letter" means
an indemnification or undertaking to a party to a |
real estate transaction, from
a principal such as a title |
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insurance company or similar entity, setting forth
in writing |
the extent of the principal's responsibility for intentional
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misconduct or errors in closing the real estate transaction on |
the part of a
settlement agent, such as a title insurance agent |
or other settlement service
provider.
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(14) "Residential real property" means a building or |
buildings consisting of one to 4 residential units or a |
residential condominium unit where at least one of the |
residential units or condominium units is occupied or intended |
to be occupied as a residence by the purchaser or borrower, or |
in the event that the purchaser or borrower is the trustee of a |
trust, by a beneficiary of that trust.
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(Source: P.A. 94-893, eff. 6-20-06.)
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(215 ILCS 155/18.1 new) |
Sec. 18.1. Choice of title insurance company. It is |
declared to be the public policy of this State that parties to |
a contract for the sale of residential real property who are |
obligated to provide and pay for title insurance have the right |
to choose the title insurance company and title insurance agent |
that will provide such title insurance. No lender or producer |
of title business, as the term is defined in this Act, shall, |
as a condition of making a loan, providing services of any |
kind, including, but not limited to, services as a broker, |
agent, lender, attorney, or otherwise, require a party to a |
contract for the sale of residential real property who is |