SB3902 104TH GENERAL ASSEMBLY

LRB104 20100 BAB 33551 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3902

Introduced 2/6/2026, by Sen. Mark L. Walker

SYNOPSIS AS INTRODUCED:

215 ILCS 155/3	from Ch. 73, par. 1403
215 ILCS 155/5.1 new
215 ILCS 155/6	from Ch. 73, par. 1406
215 ILCS 155/12	from Ch. 73, par. 1412
215 ILCS 155/12.1 new
215 ILCS 155/14	from Ch. 73, par. 1414
215 ILCS 155/16	from Ch. 73, par. 1416
215 ILCS 155/16.2 new
215 ILCS 155/16.3 new
215 ILCS 155/20	from Ch. 73, par. 1420
215 ILCS 155/21	from Ch. 73, par. 1421
215 ILCS 155/21.2
215 ILCS 155/21.4 new
215 ILCS 155/23	from Ch. 73, par. 1423

Amends the Title Insurance Act. Makes changes to defined terms. Prohibits any person from acting as a title insurance agent unless that person: (i) has been issued a license by the Secretary of Financial and Professional Regulation; and (ii) is registered with the Department of Financial and Professional Regulation by at least one title insurance company to perform core title agent services. Establishes disclosure requirements for criminal or disciplinary action involving a title insurance company, a title insurance agent, or independent escrowee. Requires every title insurance agent to obtain and maintain errors and omissions insurance or its equivalent in an amount that depends on whether the title insurance agent is also acting as an escrow agent. Sets forth provisions concerning requirements for the application of a title insurance agent license. Prohibits any individual, firm, association, partnership, or corporation from operating as a prelicensing or continuing education provider or administering examinations unless the provider holds a certification issued by the Department. Provides that the Secretary may set terms and conditions that a person shall be required to comply with during the term of probation for the person's authorization to operate. Effective immediately.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Title Insurance Act is amended by changing Sections 3, 6, 12, 14, 16, 20, 21, 21.2, and 23 and by adding Sections 5.1, 12.1, 16.2, 16.3, and 21.4 as follows:

(215 ILCS 155/3) (from Ch. 73, par. 1403)

Sec. 3. As used in this Act, the words and phrases following shall have the following meanings unless the context requires otherwise:

(1) "Title insurance business" or "business of title insurance" means:

(A) Issuing as insurer or offering to issue as insurer title insurance; and

(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;

(i) soliciting or negotiating the issuance of title insurance;

(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 proprietary leases, and for all liens or charges affecting the same;

(iii) handling of escrows, settlements, or closings;

(iv) executing title insurance policies;

(v) effecting contracts of reinsurance;

(vi) abstracting, searching, or examining titles; or

(vii) issuing insured closing letters or closing protection letters;

(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

(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

(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"; or .

(F) Performing core title agent services.

(1.5) "Title insurance" means insuring, guaranteeing, warranting, or indemnifying owners of real or personal property 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 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".

(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.

(3) "Title insurance agent" or "agent" means a person licensed under this Act and , firm, partnership, association, corporation or other legal entity registered by a title insurance company with the Department to (i) perform core title agent services or (ii) 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 prepared from a title plant, or both, and authorized by such title insurance company in addition to do any of the following: act as an escrow agent pursuant to subsections (f), (g), and (h) of Section 16 of this Act, solicit title insurance, collect premiums, or issue title insurance commitments, policies, and endorsements of the title insurance company; provided, however, the term "title insurance agent" shall not include officers and salaried employees of any title insurance company.

(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 natural persons or other legal entities that buy or sell interests in real property or that lend money with such interests as security.

(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 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.

(6) "Financial interest" is any ownership interest, legal or beneficial, of more than 1% in a privately held or publicly traded company except ownership of publicly traded stock.

(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.

(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 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.

(9) "Independent Escrowee" means any firm, person, partnership, association, corporation or other legal entity, other than a title insurance company or a title insurance 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 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 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 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.

(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.

(11) "Department" means the Department of Financial and Professional Regulation.

(12) "Secretary" means the Secretary of Financial and Professional Regulation or the Secretary's authorized representative.

(13) "Insured closing letter" or "closing protection letter" means an indemnification or undertaking to a party to a real property transaction, from a principal such as a title insurance company, setting forth in writing the extent of the principal's responsibility for intentional misconduct or errors in closing the real property transaction on the part of a settlement agent, such as a title insurance agent or other settlement service provider, or an indemnification or undertaking given by a title insurance company or an independent escrowee setting forth in writing the extent of the title insurance company's or independent escrowee's responsibility to a party to a real property transaction which indemnifies the party against the intentional misconduct or errors in closing the real property transaction on the part of the title insurance company or independent escrowee and includes protection afforded pursuant to subsections (f), (g), and (h) of Section 16, Section 16.1, subsection (h) of Section 17, and Section 17.1 of this Act even if such protection is afforded by contract.

(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.

(15) "Financial institution" means any bank subject to the Illinois Banking Act, any savings and loan association subject to the Illinois Savings and Loan Act of 1985, any savings bank subject to the Savings Bank Act, any credit union subject to the Illinois Credit Union Act, and any federally chartered commercial bank, savings and loan association, savings bank, or credit union organized and operated in this State pursuant to the laws of the United States.

(16) "Core title agent services" means the performance of the following services for which liability arises, and which shall be separate from, and shall not be duplicative of, any other professional service, including, without limitation, the practice of law and the performance of services as a real estate licensee:

(A) reviewing and evaluating title, tax, judgment, lien, and other searches or search products, private title plant records, records of grantor-grantee and other indices, public records and other records, and any other information and materials that are relevant to a particular property and transaction to determine insurability of title to the property;

(B) issuing or causing to be issued the title commitments on behalf of a title insurance company, including the determination of the conditions under which the title insurance company shall issue the title insurance policies required in a particular transaction;

(C) determining whether the requirements stated on the title insurance commitments have been met and whether the objections and requirements stated on the title insurance commitments may be cleared, waived, or insured over in accordance with applicable law and the title insurance company's underwriting requirements, principles, and guidelines; and

(D) issuing or causing to be issued the title insurance policies for a particular transaction when all conditions for the issuance have been satisfied.

(17) "Person" means any individual, partnership, joint venture, trust, estate, firm, corporation, cooperative society or association, or any other form of business association or legal entity.

(18) "Designated licensee" means the licensed individual who has a financial interest in or is an employee of a title insurance agent who is a firm, partnership, association, corporation, or other legal entity who a title insurance agent designates as responsible for its compliance with this Act, its implementing rules, and all other applicable law.

(19) "Authorization to operate" means a license, certificate of authority, certification, registration, or any other authorization to conduct activities pursuant to this Act.

(Source: P.A. 100-485, eff. 9-8-17.)

(215 ILCS 155/5.1 new)

Sec. 5.1. License required.

(a) It is unlawful for any person to hold itself out to be a title insurance agent unless first procuring from the Secretary a license subject to the requirements of this Act.

(b) Every individual and firm, partnership, association, corporation, or other legal entity registered as a title insurance agent before the date set by the Secretary by rule shall be deemed to satisfy the requirements for a license and be a licensed title agent under the Act pursuant to the rules and procedures the Secretary adopts.

(c) Every title insurance agent that is a firm, partnership, association, corporation, or other registered legal entity shall designate a designated licensee by the date set by the Department by rule. An individual shall not simultaneously act as a designated licensee for more than one firm, partnership, association, corporation, or other legal entity.

(d) The changes made by this amendatory Act of the 104th General Assembly do not relieve any person of its other obligations under this Act before or after the effective date of this amendatory Act of the 104th General Assembly.

(215 ILCS 155/6) (from Ch. 73, par. 1406)

Sec. 6. Reinsurance.

(a) A title insurance company may obtain reinsurance for all or any part of its liability under one or more of its title insurance policies or reinsurance agreements and may also reinsure title insurance policies issued by other title insurance companies on risks located in this State or elsewhere.

(a-5) Notwithstanding any other provision of this Act, a title insurance company may obtain reinsurance for all or any part of its liability under one or more of its title insurance policies from an assuming insurer with a financial strength rating of A- or better from A.M. Best Company, Inc., or with an alternative rating the Department may approve that the Department determines is an equivalent rating by another recognized rating organization.

(b) A title insurance company that is issued a certificate of authority licensed to do business in this State shall retain at least $100,000 of primary liability for policies it issues, unless a lesser sum is authorized by the Secretary. A lesser sum may be retained at the request of an insured for a particular policy. This subsection (b) applies only to policies issued on or after the effective date of this amendatory Act of the 94th General Assembly.

(Source: P.A. 100-570, eff. 6-1-18.)

(215 ILCS 155/12) (from Ch. 73, par. 1412)

Sec. 12. Examinations; compliance.

(a) The Secretary may visit and examine any title insurance company, title insurance agent, or independent escrowee doing business under this Act to verify and ensure compliance with any applicable law governing the title insurance company, title insurance agent, or independent escrowee. Expenses incurred in the course of such examinations shall be the responsibility of the title insurance company, title insurance agent, or independent escrowee.

(b) Each person subject to this Act shall make available to the Secretary upon request the books and records relating to the person's title insurance business subject to this Act. The Secretary shall have access to those books and records and may interview the officers, principals, employees, independent contractors, agents, and customers of the licensee, individual, or person subject to this Act concerning the person's business under this Act.

(c) The Secretary shall have the power to subpoena documents and witnesses and compel attendance of the witnesses, administer oaths, and require the production of any books, papers, written reports, or other materials relevant to activities governed by this Act.

(a) The Secretary or his authorized representative shall have the power and authority, and it shall be his duty, to cause to be visited and examined annually any title insurance company doing business under this Act, and to verify and compel compliance with the provisions of law governing it.

(b) The Secretary or his authorized agent shall have power and authority to compel compliance with the provisions of this Act and shall, only upon the showing of good cause, require any title insurance company to take all legal means to obtain the appropriate records of its registered agents and make them available for examination at a time and place designated by the Secretary. Expenses incurred in the course of such examinations will be the responsibility of the title insurance company. In the event that a present or former registered agent or its successor refuses or is unable to cooperate with a title insurance company in furnishing the records requested by the Secretary or his or her authorized agent, then the Secretary or his or her authorized agent shall have the power and authority to obtain those records directly from the registered agent.

(Source: P.A. 94-893, eff. 6-20-06.)

(215 ILCS 155/12.1 new)

Sec. 12.1. Notice of decision.

(a) A title insurance company, a title insurance agent, or independent escrowee and every owner, officer, director, principal, member, manager, or designated licensee of a title insurance company, title insurance agent, or independent escrowee shall notify the Secretary, in a manner prescribed by the Secretary, within 30 days after the occurrence of:

(1) any conviction of or plea of guilty or nolo contendere to any felony or misdemeanor, an essential element of which is dishonesty or fraud or larceny, embezzlement, or obtaining money, property, or credit by false pretenses or by means of a confidence game entered against the person; or

(2) any discipline against them by another state, the District of Columbia, a territory, foreign nation, a governmental agency, or any entity authorized to impose discipline if at least one of the grounds for that discipline is the same as or equivalent to one of the grounds for which a title insurance company, title insurance agent, or independent escrowee may be disciplined under this Act or if at least one of the grounds for that discipline involves dishonesty.

(b) This Section does not require reporting by an employee of a title insurance company, title insurance agent, or independent escrowee that is not an owner, officer, director, principal, member, manager, or designated licensee of the title insurance company, title insurance agent, or independent escrowee. No person shall be required to comply with this Section before the date set by the Secretary by rule.

(215 ILCS 155/14) (from Ch. 73, par. 1414)

Sec. 14. Fees.

(a) Every title insurance company and every independent escrowee subject to this Act shall pay the following fees:

(1) for filing the original application for a certificate of authority and receiving the deposit required under this Act, $2,000 $500;

(2) for the certificate of authority, $10;

(3) for every copy of a paper filed in the Department under this Act, $1 per folio;

(4) for affixing the seal of the Department and certifying a copy, $2; and

(5) for filing the annual statement, $50.

(b) Each title insurance company shall remit, for all of its title insurance agents subject to this Act for filing an annual registration of its agents, an amount equal to $8 $3 for each policy issued by all of its agents in the immediately preceding calendar year.

(c) Every title insurance agent subject to this Act shall pay the following nonrefundable fees:

(1) for filing the original application for a license required under this Act, $200; and

(2) for filing a renewal application for a license required under this Act, $100.

(d) Every title insurance education and examination provider subject to this Act shall pay the following nonrefundable fees:

(1) for filing the original application for certification pursuant to Section 16.2, $500;

(2) for filing a renewal application for certification pursuant to Section 16.2, $100; and

(3) for filing the original submission of materials for each course of study and examination for approval, $100.

(e) Every title insurance agent shall be responsible for paying any costs or fees required under this Act with respect to the licensing and renewal applications and testing.

(Source: P.A. 99-104, eff. 1-1-16.)

(215 ILCS 155/16) (from Ch. 73, par. 1416)

Sec. 16. Title insurance agents.

(a) No person, firm, partnership, association, corporation or other legal entity shall act as or hold itself out to be a title insurance agent unless duly registered by a title insurance company with the Secretary.

(b) Each application for registration shall be made on a form specified by the Secretary and prepared by each title insurance company which the agent represents. The title insurance company shall retain the copy of the application and forward a copy to the Secretary.

(c) Every applicant for registration, except a firm, partnership, association, limited liability company, or corporation, must be 18 years or more of age. Included in every application for registration of a title insurance agent, including a firm, partnership, association, limited liability company, or corporation, shall be an affidavit of the applicant title insurance agent, signed and notarized in front of a notary public, affirming that the applicant and every owner, officer, director, principal, member, or manager of the applicant has never been convicted or pled guilty to any felony or misdemeanor involving a crime of theft or dishonesty or otherwise accurately disclosing any such felony or misdemeanor involving a crime of theft or dishonesty. No person who has had a conviction or pled guilty to any felony or misdemeanor involving theft or dishonesty may be registered by a title insurance company without a written notification to the Secretary disclosing the conviction or plea, and no such person may serve as an owner, officer, director, principal, or manager of any registered title insurance agent without the written permission of the Secretary.

(d) Registration shall be made annually by a filing with the Secretary; supplemental registrations for new title insurance agents to be added between annual filings shall be made from time to time in the manner provided by the Secretary; registrations shall remain in effect unless revoked or suspended by the Secretary or voluntarily withdrawn by the registrant or the title insurance company.

(e) Funds deposited in connection with any escrows, settlements, or closings shall be deposited into in a separate fiduciary trust account or accounts in a bank or other financial institution insured by an agency of the federal government unless the instructions provide otherwise. The funds shall be the property of the person or persons entitled thereto under the provisions of the escrow, settlement, or closing and shall be segregated by escrow, settlement, or closing in the records of the escrow agent. The funds shall not be subject to any debts of the escrowee and shall be used only in accordance with the terms of the individual escrow, settlement, or closing under which the funds were accepted.

Interest received on funds deposited with the escrow agent in connection with any escrow, settlement, or closing shall be paid to the depositing party unless the instructions provide otherwise.

The escrow agent shall maintain separate records of all receipts and disbursements of escrow, settlement, or closing funds.

The escrow agent shall comply with any rules adopted by the Secretary pertaining to escrow, settlement, or closing transactions.

(f) A title insurance agent shall not act as an escrow agent in a nonresidential real property transaction where the amount of settlement funds on deposit with the escrow agent is less than $2,000,000 or in a residential real property transaction unless the title insurance agent, title insurance company, or another authorized title insurance agent has committed for the issuance of title insurance in that transaction and the title insurance agent is authorized to act as an escrow agent on behalf of the title insurance company for which the commitment for title insurance has been issued. The authorization under the preceding sentence shall be given either (1) by an agency contract with the title insurance company which contract, in compliance with the requirements set forth in subsection (g) of this Section, authorizes the title insurance agent to act as an escrow agent on behalf of the title insurance company or (2) by a closing protection letter in compliance with the requirements set forth in Section 16.1 of this Act, issued by the title insurance company to the seller, buyer, borrower, and lender. A closing protection letter shall not be issued by a title insurance agent. The provisions of this subsection (f) shall not apply to the authority of a title insurance agent to act as an escrow agent under subsection (g) of Section 17 of this Act.

(g) If an agency contract between the title insurance company and the title insurance agent is the source of the authority under subsection (f) of this Section for a title insurance agent to act as escrow agent for a real property transaction, then the agency contract shall provide for no less protection from the title insurance company to all parties to the real property transaction than the title insurance company would have provided to those parties had the title insurance company issued a closing protection letter in conformity with Section 16.1 of this Act.

(h) A title insurance company shall be liable for the acts or omissions of its title insurance agent as an escrow agent if the title insurance company has authorized the title insurance agent under subsections (f) and (g) of this Section 16 and only to the extent of the liability undertaken by the title insurance company in the agency agreement or closing protection letter. The liability, if any, of the title insurance agent to the title insurance company for acts and omissions of the title insurance agent as an escrow agent shall not be limited or otherwise modified because the title insurance company has provided closing protection to a party or parties to a real property transaction escrow, settlement, or closing. The escrow agent shall not charge a fee for protection provided by a title insurance company to parties to real property transactions under subsections (f) and (g) of this Section 16 and Section 16.1, but shall collect from the parties the fee charged by the title insurance company and shall promptly remit the fee to the title insurance company. The title insurance company may charge the parties a reasonable fee for protection provided pursuant to subsections (f) and (g) of this Section 16 and Section 16.1 and shall not pay any portion of the fee to the escrow agent. The payment of any portion of the fee to the escrow agent by the title insurance company, shall be deemed a prohibited inducement or compensation in violation of Section 24 of this Act.

(i) The Secretary shall adopt and amend such rules as may be required for the proper administration and enforcement of this Section 16 consistent with the federal Real Estate Settlement Procedures Act and Section 24 of this Act.

(j) The Secretary may by rule waive, amend, or supersede the requirements set forth in this Section for registration of title insurance agents by title insurance companies on or after the date licensing of title insurance agents begins pursuant to Section 16.2.

(Source: P.A. 98-398, eff. 1-1-14; 98-832, eff. 1-1-15; 99-104, eff. 1-1-16.)

(215 ILCS 155/16.2 new)

Sec. 16.2. Title insurance agent licensing.

(a) No person shall act as a title insurance agent unless that person: (i) has been issued a license by the Secretary; and (ii) is registered with the Department by at least one title insurance company to perform core title agent services.

(b) Title insurance companies shall follow the current registration process for title insurance agents as set forth in Section 16 prior to the date set by the Secretary by rule for the licensing of title insurance agents. No title insurance agent shall be licensed under this Act prior to the date set forth by the Secretary by rule.

(c) Every title insurance agent also acting as an escrow agent shall obtain and maintain errors and omissions insurance or its equivalent, such as malpractice insurance covering title insurance agent and escrow services, in a coverage and deductible amount acceptable to the title insurance company authorizing the agent, but in any event in an amount no less than $500,000 per claim and an aggregate limit of $1,000,000. Every title insurance agent not acting as an escrow agent shall obtain and maintain errors and omissions insurance or its equivalent, such as malpractice insurance covering title insurance agent, in a coverage and deductible amount acceptable to the title insurance company authorizing the agent, but in any event in an amount no less than $250,000 per claim and an aggregate limit of $500,000. A title insurance company shall not provide the errors and omissions insurance directly or indirectly on behalf of a title insurance agent. If errors and omissions insurance is unavailable generally, the Secretary shall adopt rules for alternative methods to comply with this subsection. No title insurance agent shall be required to comply with this subsection until the date the Secretary sets by rule.

(d) Each application for a license shall be made on a form specified by the Secretary and submitted to the Secretary by the title insurance agent.

(e) License applications shall comply with the following:

(1) Every applicant for a license, except a firm, partnership, association, corporation, or other legal entity, must be 18 years or more of age.

(2) Every applicant for a license that is a firm, partnership, association, corporation, or other legal entity shall designate a designated licensee that is licensed as an agent under the Act. An employee of the title insurance agent who performs core title agent services on behalf of the title insurance agent is not required to obtain a license. No person whose title insurance agent license is revoked or suspended by the Secretary or is the owner, officer, director, principal, member, manager, or designated licensee of a title insurance agent whose license is revoked or suspended by the Secretary may be employed by a title insurance agent to perform core title agent services or be the owner, officer, director, principal, member, manager, or designated licensee without: (i) a written notification to the Secretary disclosing the revoked or suspended status and (ii) written permission from the Secretary.

(3) Included in every application for a license of a title insurance agent, including a firm, partnership, association, corporation, or other legal entity, shall be an affidavit of the applicant title insurance agent, signed and notarized in front of a notary public, affirming that the applicant and every owner, officer, director, principal, member, or manager of the applicant, and any entity owned by such person or persons: (i) has never been convicted of, pled guilty, or pled no contest to any felony or misdemeanor involving a crime of theft or dishonesty, or accurately disclosing any such felony or misdemeanor involving a crime of theft or dishonesty, and (ii) has not been denied a license or had a license revoked or suspended by a governmental agency or disciplinary body based on findings of theft or dishonesty. No person or entity owned by such person having been convicted of, pled guilty to, or pled no contest to any felony or misdemeanor involving theft or dishonesty or having had a license revoked, suspended, or denied may be issued a license by the Secretary or appointed by a title insurance company without a written notification to the Secretary disclosing the conviction, plea, revocation, suspension, or denial, and no such person may serve as an owner, officer, director, principal, or manager of any title insurance agent without the written permission of the Secretary.

(4) Included with the initial application for a license of a title insurance agent shall be:

(A) for an individual, proof that the applicant has passed, with a score of no less than 70%, an examination required by the Secretary demonstrating reasonable familiarity with:

(i) ethical practices, duties, and responsibilities of a title agent;

(ii) how title insurance policy claims arise;

(iii) introduction to title insurance, including requirements of the Illinois Title Insurance Act and administrative rules;

(iv) Illinois real property law, including, but not limited to, forms of ownership, conveyances, testate or intestate succession of title, taxes, judgments, liens, and surveys;

(v) core title agent services;

(vi) title examinations and methods, title objections, policy and endorsement forms, waivers of policy exceptions, and escrow procedures;

(vii) introduction to escrow and settlement rules and regulations;

(viii) accounting practices for escrow agents and title agents;

(ix) financial responsibilities of a title agent outside of escrow; and

(x) principles of the federal Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.).

The examination required in this subsection must have been taken and passed with a score of no less than 70% by the applicant within 365 days after submission of the initial license application.

(B) For an individual, proof that the applicant has satisfied a prelicensing education requirement of at least 8 credit hours on the subjects set forth in this Section prior to taking the examination required by the Secretary.

(C) For a firm, partnership, association, corporation, or other legal entity, proof that it has a designated licensee that holds a title insurance agent license in good standing pursuant to this Act.

(D) Information related to the competence, character, and general fitness of the applicant and, if applicable, any owner, officers, directors, principal, member, manager, and designated licensee.

(E) For escrow agents, information related to the financial condition and responsibility of the applicant and, if applicable, owners, officers, directors, principals, members, and managers.

(5) Every initial or renewal application shall include proof that the applicant or agent is in compliance with the errors and omissions insurance requirement and continuing education requirements set forth in this Act and other information required by the Secretary.

(f) A license shall be valid for 2 years or a period of time determined by the Department by rule. The Secretary shall set the form and timing of the renewal by rule. Licenses shall remain in effect during the applicable period unless revoked or suspended by the Secretary or voluntarily withdrawn by the title insurance agent. A license shall also remain in effect after the applicable period if the licensee timely submits the licensee's complete and accurate renewal application and fee until the Department approves or denies the renewal.

(g) The Department may by rule set reciprocal licensing standards and qualifications for persons licensed in another state intending to do business in this State.

(h) Agents applying for renewal must complete a continuing education requirement of at least 8 credit hours on the subjects set forth in this Section prior to submission of the renewal application. An agent that acts as an escrow agent must complete an additional 4 credit hours on the subjects set forth in this Section prior to submission of the renewal application. Agents shall provide proof of completion to the Department.

(i) For a firm, partnership, association, corporation, or other legal entity, proof that its designated licensee has complied with subsection (h) shall satisfy the continuing education requirements of this Act.

(j) An agent who is an attorney in good standing currently registered with the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois or the equivalent in another jurisdiction shall be able to satisfy the requirements set forth in subsection (h) through completion of mandatory continuing legal education (MCLE) credit hours of the equivalent in another jurisdiction if those credit hours relate to real estate transactions or title insurance and the agent provides proof of completion to the Department.

(k) For purposes of reciprocity between states under the terms of this Act, a person is a resident of this State if that person resides in this State or the principal place of business of that person is maintained in this State. All other persons shall be considered nonresidents. A satisfaction by a nonresident title insurance agent of the continuing education requirements of the nonresident's home state for licensed title insurance agents or producers shall constitute satisfaction of the continuing education requirements of this State if the home state of the nonresident title insurance agent or producer recognizes the satisfaction of its continuing education requirements imposed upon producers from this State on the same basis.

(l) The Secretary may establish by rule standards and processes related to the education requirements set forth in this Section for agents.

(215 ILCS 155/16.3 new)

Sec. 16.3. Education and examination providers.

(a) No individual, firm, association, partnership, or corporation may operate as a prelicensing or continuing education provider or administer examinations unless the provider holds a certification issued by the Department. The Secretary shall adopt rules regarding the standards and qualifications of education and examination providers.

(b) The Secretary shall set the frequency, timing, and form of renewal for providers by rule. Certifications shall remain in effect during the applicable period unless revoked or suspended by the Secretary. A certification shall also remain in effect after the applicable period if the provider timely submits the provider's complete and accurate renewal application and fee until the Department approves or denies the renewal application.

(c) A provider shall submit to the Department materials for courses of study and examinations for approval prior to the use of such materials.

(d) If a provider wishes to substantially change approved materials for courses of study or examinations, a copy of the proposed revisions must be sent to the Department for approval prior to the use of such materials.

(e) The Department may by rule set standards and processes for continuing education providers.

(215 ILCS 155/20) (from Ch. 73, par. 1420)

Sec. 20. Rules and regulations. In addition to the rulemaking authority expressly provided elsewhere in this Act, the The Secretary shall rely upon federal regulations and opinion letters and may adopt rules and regulations as needed to implement, administer, and interpret the provisions of this Act.

(Source: P.A. 94-893, eff. 6-20-06.)

(215 ILCS 155/21) (from Ch. 73, par. 1421)

Sec. 21. Regulatory action.

(a) The Secretary may refuse to grant, and may suspend or revoke or place on probationary status, any authorization to operate certificate of authority, registration, or license issued pursuant to this Act or may impose a fine for a violation of this Act if the Secretary determines he determines that the holder of or applicant for such authorization to operate or a person requiring authorization to operate under this Act; an owner, officer, director, principal, member, manager, or designated licensee of a title insurance company, title insurance agent, or independent escrowee; or a person requiring a license under this Act certificate, registration or license:

(1) has intentionally made a material misstatement or fraudulent misrepresentation in relation to a matter covered by this Act;

(2) has misappropriated or tortiously converted to its own use, or illegally withheld, monies held in a fiduciary capacity;

(3) has demonstrated untrustworthiness or incompetency in transacting the business of guaranteeing titles to real estate in such a manner as to endanger the public;

(4) has materially misrepresented the terms or conditions of contracts or agreements to which it is a party;

(5) has paid any commissions, discounts or any part of its premiums, fees or other charges to any person in violation of any State or federal law or regulations or opinion letters issued under the federal Real Estate Settlement Procedures Act of 1974;

(6) has failed to comply with the deposit and reserve requirements of this Act or any other requirements of this Act;

(7) has committed fraud or misrepresentation in applying for or procuring any certificate of authority, registration, or license issued pursuant to this Act;

(8) has a conviction or plea of guilty or plea of nolo contendere in this State or any other jurisdiction to (i) any felony or (ii) a misdemeanor, an essential element of which is dishonesty or fraud or larceny, embezzlement, or obtaining money, property, or credit by false pretenses or by means of a confidence game;

(9) has been disciplined by another state, the District of Columbia, a territory, foreign nation, a governmental agency, or any entity authorized to impose discipline if at least one of the grounds for that discipline is the same as or equivalent to one of the grounds for which a title insurance company, title insurance agent, or independent escrowee may be disciplined under this Act or if at least one of the grounds for that discipline involves dishonesty; a certified copy of the record of the action by the other state or jurisdiction shall be prima facie evidence thereof;

(10) has advertising that is inaccurate, misleading, or contrary to the provisions of this Act;

(11) has knowingly and willfully made any substantial misrepresentation or untruthful advertising;

(12) has made any false promises of a character likely to influence, persuade, or induce;

(13) has knowingly failed to account for or remit any money or documents coming into the possession of a title insurance company, title insurance agent, or independent escrowee that belong to others;

(14) has engaged in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public;

(15) has violated the terms of a disciplinary order issued by the Department;

(16) has disregarded or violated any provision of this Act or the published rules adopted by the Department to enforce this Act or has aided or abetted any person individual, partnership, registered limited liability partnership, limited liability company, or corporation in disregarding any provision of this Act or the published rules; or

(17) has acted as a title insurance company, title insurance agent, or independent escrowee, education provider, or examination provider without the proper authorization to operate a certificate of authority, registration, or license after the title insurance company, title insurance agent, or independent escrowee, education provider, or examination provider's authorization to operate escrowee's certificate of authority, registration, or license was inoperative.

(a-5) A person may also receive disciplinary action as described in subsection (a) if a fact or condition exists that, if it existed or had been known at the time the person applied for an authorization to operate, then it would have been grounds for denying the application.

(b) For all orders authorized by this Act In every case where a registration or certificate is suspended or revoked, or an application for a registration or certificate or renewal thereof is refused, the Secretary shall serve notice of the Secretary's his action, including a statement of the reasons for the his action, as provided by this Act, and the person served may request a hearing within 30 days after the date of service. When a notice of suspension or revocation of a certificate of authority is given to a title insurance company, the Secretary shall also notify all the registered agents of that title insurance company of the Secretary's action. Except as otherwise authorized by this Act, all orders shall take effect 30 days after the date of service, except that, if a hearing is requested, the order shall be stayed pending entry of a final administrative decision.

(c) (Blank). In the case of a refusal to issue or renew a certificate or accept a registration, the applicant or registrant may request in writing, within 30 days after the date of service, a hearing. In the case of a refusal to renew, the expiring registration or certificate shall be deemed to continue in force until 30 days after the service of the notice of refusal to renew, or if a hearing is requested during that period, until a final order is entered pursuant to such hearing.

(d) (Blank). The suspension or revocation of a registration or certificate shall take effect upon service of notice thereof. The holder of any such suspended registration or certificate may request in writing, within 30 days of such service, a hearing.

(e) In cases of suspension or revocation of an authorization to operate registration pursuant to subsection (a), the Secretary may, in the public interest, issue an emergency order of suspension or revocation which shall take effect upon service of notification thereof. Such order shall become final 30 60 days after from the date of service unless the person registrant requests in writing, within such 30 60 days, a formal hearing thereon. In the event a hearing is requested, the order shall remain temporary and in effect until a final order is entered pursuant to such hearing.

(f) Hearings Hearing shall be conducted pursuant to 38 Ill. Adm. Code 100, as amended or recodified from time to time, and held at such time and place reasonably as may be designated by the Secretary either in the City of Springfield, the City of Chicago, or in the county in which the principal business office of the affected registrant or certificate holder is located.

(g) The suspension or revocation of an authorization to operate a registration or certificate or the refusal to issue or renew an authorization to operate a registration or certificate shall not in any way limit or terminate the responsibilities of any registrant, or certificate holder, or licensee arising under any policy or contract of title insurance to which it is a party. No new contract or policy of title insurance may be issued, nor may any existing policy or contract to title insurance be renewed by any registrant, or certificate holder, or licensee during any period of suspension or revocation of a registration, or certificate, or license.

(h) The Secretary may issue a cease and desist order to a title insurance company, agent, or other entity doing business without the required authorization to operate license or registration, when in the opinion of the Secretary, the company, agent, or other entity is violating or is about to violate any provision of this Act or any law or of any rule or condition imposed in writing by the Department.

The Secretary may issue the cease and desist order without notice and before a hearing.

The Secretary shall have the authority to prescribe rules for the administration of this Section.

If it is determined that the Secretary had the authority to issue the cease and desist order, he may issue such orders as may be reasonably necessary to correct, eliminate or remedy such conduct.

Any person or company subject to an order pursuant to this Section is entitled to judicial review of the order in accordance with the provisions of the Administrative Review Law.

The powers vested in the Secretary by this Section are additional to any and all other powers and remedies vested in the Secretary by law, and nothing in this Section shall be construed as requiring that the Secretary shall employ the powers conferred in this Section instead of or as a condition precedent to the exercise of any other power or remedy vested in the Secretary.

(Source: P.A. 98-398, eff. 1-1-14.)

(215 ILCS 155/21.2)

Sec. 21.2. Notice.

(a) Notice of any action by the Secretary under this Act or regulations or orders promulgated under it shall be made either personally or by registered or certified mail, return receipt requested, and by sending a copy of the notice by telephone facsimile or electronic mail, if known and operating, and if unknown or not operating, then by regular mail. Service by mail shall be deemed completed if the notice is deposited as registered or certified mail in the post office, postage paid, addressed to the last known address specified in the application for the authorization to operate certificate of authority to do business or certificate of registration of the holder or registrant.

(b) The Secretary shall notify all registered agents of a title insurance company when that title insurance company's authorization to operate certificate of authority is suspended or revoked.

(Source: P.A. 94-893, eff. 6-20-06.)

(215 ILCS 155/21.4 new)

Sec. 21.4. Probation. The Secretary may set terms and conditions that a person shall be required to comply with during the term of probation for the person's authorization to operate.

(215 ILCS 155/23) (from Ch. 73, par. 1423)

Sec. 23. Violation; penalties.

(a) Any violation of any of the provisions of this Act and, beginning January 1, 2013, any violation of any of the provisions of Article 3 of the Residential Real Property Disclosure Act shall constitute a business offense and shall subject the party violating the same to a penalty of $1000 for each offense.

(b) Nothing contained in this Section shall affect the right of the Secretary to revoke or suspend an authorization to operate under a title insurance company's or independent escrowee's certificate of authority or a title insurance agent's registration under any other Section of this Act.

(Source: P.A. 97-891, eff. 8-3-12.)

Section 99. Effective date. This Act takes effect upon becoming law.