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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Title Insurance Act is amended by changing | |||||||||||||||||||
5 | Section 16 as follows:
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6 | (215 ILCS 155/16) (from Ch. 73, par. 1416)
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7 | Sec. 16. Title insurance agents.
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8 | (a) No person, firm, partnership, association, corporation | |||||||||||||||||||
9 | or other
legal entity shall act as or hold itself out to be a | |||||||||||||||||||
10 | title insurance agent
unless duly registered by a title | |||||||||||||||||||
11 | insurance company with the Secretary.
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12 | (b) Each application for registration shall be made on a | |||||||||||||||||||
13 | form specified
by the Secretary and prepared in duplicate by | |||||||||||||||||||
14 | each title insurance company
which the agent represents. The | |||||||||||||||||||
15 | title insurance company shall retain the
copy of the | |||||||||||||||||||
16 | application and forward the original to the Secretary with the
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17 | appropriate fee.
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18 | (c) Every applicant for registration, except a firm, | |||||||||||||||||||
19 | partnership,
association, limited liability company, or | |||||||||||||||||||
20 | corporation, must be 18 years or more of age. Included in every | |||||||||||||||||||
21 | application for registration of a title insurance agent, | |||||||||||||||||||
22 | including a firm, partnership,
association, limited liability | |||||||||||||||||||
23 | company, or corporation, shall be an affidavit of the applicant |
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1 | title insurance agent, signed and notarized in front
of a | ||||||
2 | notary public, affirming that the applicant and every owner, | ||||||
3 | officer, director, principal, member, or
manager of the | ||||||
4 | applicant has never been convicted or pled guilty to any felony | ||||||
5 | or misdemeanor involving a crime of
theft or dishonesty or | ||||||
6 | otherwise accurately disclosing any such felony or misdemeanor | ||||||
7 | involving a crime of
theft or dishonesty . No person who has had | ||||||
8 | a conviction or pled guilty to any felony or
misdemeanor | ||||||
9 | involving theft or dishonesty may be registered by a title | ||||||
10 | insurance company without a separate written notification to | ||||||
11 | the Secretary disclosing the conviction or plea, and no such
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12 | person may serve as an owner, officer, director, principal, or | ||||||
13 | manager of any registered title insurance
agent without the | ||||||
14 | written permission of the Secretary.
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15 | (d) Registration shall be made annually by a filing with | ||||||
16 | the Secretary;
supplemental registrations for new title | ||||||
17 | insurance agents to be added
between annual filings shall be | ||||||
18 | made from time to time in the manner
provided by the Secretary; | ||||||
19 | registrations shall remain in effect unless
revoked or | ||||||
20 | suspended by the Secretary or
voluntarily withdrawn by the
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21 | registrant or the title insurance company.
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22 | (e) Funds deposited in connection with any escrows, | ||||||
23 | settlements, or closings shall be deposited in a separate | ||||||
24 | fiduciary trust account or accounts in a bank or other | ||||||
25 | financial institution insured by an agency of the federal | ||||||
26 | government unless the instructions provide otherwise. The |
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1 | funds shall be the property of the person or persons entitled | ||||||
2 | thereto under the provisions of the escrow, settlement, or | ||||||
3 | closing and shall be segregated by escrow, settlement, or | ||||||
4 | closing in the records of the escrow agent. The funds shall not | ||||||
5 | be subject to any debts of the escrowee and shall be used only | ||||||
6 | in accordance with the terms of the individual escrow, | ||||||
7 | settlement, or closing under which the funds were accepted. | ||||||
8 | Interest received on funds deposited with the escrow agent | ||||||
9 | in connection with any escrow, settlement, or closing shall be | ||||||
10 | paid to the depositing party unless the instructions provide | ||||||
11 | otherwise. | ||||||
12 | The escrow agent shall maintain separate records of all | ||||||
13 | receipts and disbursements of escrow, settlement, or closing | ||||||
14 | funds. | ||||||
15 | The escrow agent shall comply with any rules adopted by the | ||||||
16 | Secretary pertaining to escrow, settlement, or closing | ||||||
17 | transactions. | ||||||
18 | (f) A title insurance agent shall not act as an escrow | ||||||
19 | agent in a nonresidential real property transaction where the | ||||||
20 | amount of settlement funds on deposit with the escrow agent is | ||||||
21 | less than $2,000,000 or in a residential real property | ||||||
22 | transaction unless the title insurance agent, title insurance | ||||||
23 | company, or another authorized title insurance agent has | ||||||
24 | committed for the issuance of title insurance in that | ||||||
25 | transaction and the title insurance agent is authorized to act | ||||||
26 | as an escrow agent on behalf of the title insurance company for |
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1 | which the commitment for title insurance has been issued. The | ||||||
2 | authorization under the preceding sentence shall be given | ||||||
3 | either (1) by an agency contract with the title insurance | ||||||
4 | company which contract, in compliance with the requirements set | ||||||
5 | forth in subsection (g) of this Section, authorizes the title | ||||||
6 | insurance agent to act as an escrow agent on behalf of the | ||||||
7 | title insurance company or (2) by a closing protection letter | ||||||
8 | in compliance with the requirements set forth in Section 16.1 | ||||||
9 | of this Act, issued by the title insurance company to the | ||||||
10 | seller, buyer, borrower, and lender. A closing protection | ||||||
11 | letter shall not be issued by a title insurance agent. The | ||||||
12 | provisions of this subsection (f) shall not apply to the | ||||||
13 | authority of a title insurance agent to act as an escrow agent | ||||||
14 | under subsection (g) of Section 17 of this Act. | ||||||
15 | (g) If an agency contract between the title insurance | ||||||
16 | company and the title insurance agent is the source of the | ||||||
17 | authority under subsection (f) of this Section for a title | ||||||
18 | insurance agent to act as escrow agent for a real property | ||||||
19 | transaction, then the agency contract shall provide for no less | ||||||
20 | protection from the title insurance company to all parties to | ||||||
21 | the real property transaction than the title insurance company | ||||||
22 | would have provided to those parties had the title insurance | ||||||
23 | company issued a closing protection letter in conformity with | ||||||
24 | Section 16.1 of this Act. | ||||||
25 | (h) A title insurance company shall be liable for the acts | ||||||
26 | or omissions of its title insurance agent as an escrow agent if |
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1 | the title insurance company has authorized the title insurance | ||||||
2 | agent under subsections (f) and (g) of this Section 16 and only | ||||||
3 | to the extent of the liability undertaken by the title | ||||||
4 | insurance company in the agency agreement or closing protection | ||||||
5 | letter. The liability, if any, of the title insurance agent to | ||||||
6 | the title insurance company for acts and omissions of the title | ||||||
7 | insurance agent as an escrow agent shall not be limited or | ||||||
8 | otherwise modified because the title insurance company has | ||||||
9 | provided closing protection to a party or parties to a real | ||||||
10 | property transaction escrow, settlement, or closing. The | ||||||
11 | escrow agent shall not charge a fee for protection provided by | ||||||
12 | a title insurance company to parties to real property | ||||||
13 | transactions under subsections (f) and (g) of this Section 16 | ||||||
14 | and Section 16.1, but shall collect from the parties the fee | ||||||
15 | charged by the title insurance company and shall promptly remit | ||||||
16 | the fee to the title insurance company. The title insurance | ||||||
17 | company may charge the parties a reasonable fee for protection | ||||||
18 | provided pursuant to subsections (f) and (g) of this Section 16 | ||||||
19 | and Section 16.1 and shall not pay any portion of the fee to | ||||||
20 | the escrow agent. The payment of any portion of the fee to the | ||||||
21 | escrow agent by the title insurance company, shall be deemed a | ||||||
22 | prohibited inducement or compensation in violation of Section | ||||||
23 | 24 of this Act. | ||||||
24 | (i) The Secretary shall adopt and amend such rules as may | ||||||
25 | be required for the proper administration and enforcement of | ||||||
26 | this Section 16 consistent with the federal Real Estate |
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1 | Settlement Procedures Act and Section 24 of this Act. | ||||||
2 | (Source: P.A. 98-398, eff. 1-1-14.)
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