102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3064

 

Introduced 2/19/2021, by Rep. Camille Y. Lilly

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 155/3  from Ch. 73, par. 1403
215 ILCS 155/5  from Ch. 73, par. 1405
215 ILCS 155/12  from Ch. 73, par. 1412
215 ILCS 155/14  from Ch. 73, par. 1414
215 ILCS 155/14.1
215 ILCS 155/16  from Ch. 73, par. 1416
215 ILCS 155/18  from Ch. 73, par. 1418
215 ILCS 155/18.2 new
215 ILCS 155/21  from Ch. 73, par. 1421
215 ILCS 155/23  from Ch. 73, par. 1423
215 ILCS 155/19 rep.
215 ILCS 155/24 rep.
215 ILCS 155/25 rep.

    Amends the Title Insurance Act. Provides that it is unlawful for any person, firm, partnership, association, corporation, or other legal entity to act as or hold itself out to be a title insurance agent unless first procuring from the Secretary of Financial and Professional Regulation a certificate of authority. Provides that the Secretary of Financial and Professional Regulation or the Secretary's authorized representative shall have power and authority to compel an independent escrowee's compliance with specified provisions of the Title Insurance Act. Establishes fees for title insurance agents. Provides that every applicant for a certificate of authority that is a firm, partnership, association, corporation, or other legal entity shall designate and name at least one individual who (1) has a financial or other beneficial interest in the licensee and (2) is authorized by at least one title insurance company to determine insurability of title. Establishes requirements for the issuance of certificates of authority to title insurance agents. Changes provisions concerning criminal penalties and injunctive relief for violations and referrals. Makes other changes. Effective immediately, except that the provisions concerning the filing of title insurance rates take effect September 1, 2022.


LRB102 14548 BMS 19901 b

 

 

A BILL FOR

 

HB3064LRB102 14548 BMS 19901 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Title Insurance Act is amended by changing
5Sections 3, 5, 12, 14, 14.1, 16, 18, 21, and 23 and by adding
6Section 18.2 as follows:
 
7    (215 ILCS 155/3)  (from Ch. 73, par. 1403)
8    Sec. 3. As used in this Act, the words and phrases
9following shall have the following meanings unless the context
10requires otherwise:
11    (1) "Title insurance business" or "business of title
12insurance" means:
13        (A) Issuing as insurer or offering to issue as insurer
14    title insurance; and
15        (B) Transacting or proposing to transact one or more
16    of the following activities when conducted or performed in
17    contemplation of or in conjunction with the issuance of
18    title insurance;
19            (i) soliciting or negotiating the issuance of
20        title insurance;
21            (ii) guaranteeing, warranting, or otherwise
22        insuring the correctness of title searches for all
23        instruments affecting titles to real property, any

 

 

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1        interest in real property, cooperative units and
2        proprietary leases, and for all liens or charges
3        affecting the same;
4            (iii) handling of escrows, settlements, or
5        closings;
6            (iv) executing title insurance policies;
7            (v) effecting contracts of reinsurance;
8            (vi) abstracting, searching, or examining titles;
9        or
10            (vii) issuing insured closing letters or closing
11        protection letters;
12        (C) Guaranteeing, warranting, or insuring searches or
13    examinations of title to real property or any interest in
14    real property, with the exception of preparing an
15    attorney's opinion of title; or
16        (D) Guaranteeing or warranting the status of title as
17    to ownership of or liens on real property and personal
18    property by any person other than the principals to the
19    transaction; or
20        (E) Doing or proposing to do any business
21    substantially equivalent to any of the activities listed
22    in this subsection, provided that the preparation of an
23    attorney's opinion of title pursuant to paragraph (1)(C)
24    is not intended to be within the definition of "title
25    insurance business" or "business of title insurance".
26    (1.5) "Title insurance" means insuring, guaranteeing,

 

 

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1warranting, or indemnifying owners of real or personal
2property or the holders of liens or encumbrances thereon or
3others interested therein against loss or damage suffered by
4reason of liens, encumbrances upon, defects in, or the
5unmarketability of the title to the property; the invalidity
6or unenforceability of any liens or encumbrances thereon; or
7doing any business in substance equivalent to any of the
8foregoing. "Warranting" for purpose of this provision shall
9not include any warranty contained in instruments of
10encumbrance or conveyance. Title insurance is a single line
11form of insurance, also known as monoline. An attorney's
12opinion of title pursuant to paragraph (1)(C) is not intended
13to be within the definition of "title insurance".
14    (2) "Title insurance company" means any domestic company
15organized under the laws of this State for the purpose of
16conducting the business of title insurance and any title
17insurance company organized under the laws of another State,
18the District of Columbia or foreign government and authorized
19to transact the business of title insurance in this State.
20    (3) "Title insurance agent" means a person, firm,
21partnership, association, corporation or other legal entity
22issued a certificate of authority under this Act registered by
23a title insurance company and authorized by a title insurance
24such company to determine insurability of title in accordance
25with generally acceptable underwriting rules and standards in
26reliance on either the public records or a search package

 

 

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1prepared from a title plant, or both, and authorized by such
2title insurance company in addition to do any of the
3following: act as an escrow agent pursuant to subsections (f),
4(g), and (h) of Section 16 of this Act, solicit title
5insurance, collect premiums, or issue title insurance
6commitments, policies, and endorsements of the title insurance
7company; provided, however, the term "title insurance agent"
8shall not include officers and salaried employees of any title
9insurance company.
10    (4) "Producer of title business" is any person, firm,
11partnership, association, corporation or other legal entity
12engaged in this State in the trade, business, occupation or
13profession of (i) buying or selling interests in real
14property, (ii) making loans secured by interests in real
15property, or (iii) acting as broker, agent, attorney, or
16representative of natural persons or other legal entities that
17buy or sell interests in real property or that lend money with
18such interests as security.
19    (5) "Associate" is any firm, association, partnership,
20corporation or other legal entity organized for profit in
21which a producer of title business is a director, officer, or
22partner thereof, or owner of a financial interest, as defined
23herein, in such entity; any legal entity that controls, is
24controlled by, or is under common control with a producer of
25title business; and any natural person or legal entity with
26whom a producer of title business has any agreement,

 

 

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1arrangement, or understanding or pursues any course of conduct
2the purpose of which is to evade the provisions of this Act.
3    (6) "Financial interest" is any ownership interest, legal
4or beneficial, except ownership of publicly traded stock.
5    (7) "Refer" means to place or cause to be placed, or to
6exercise any power or influence over the placing of title
7business, whether or not the consent or approval of any other
8person is sought or obtained with respect to the referral.
9    (8) "Escrow Agent" means any title insurance company or
10any title insurance agent, including independent contractors
11of either, acting on behalf of a title insurance company,
12which receives deposits, in trust, of funds or documents, or
13both, for the purpose of effecting the sale, transfer,
14encumbrance or lease of real property to be held by such escrow
15agent until title to the real property that is the subject of
16the escrow is in a prescribed condition. An escrow agent
17conducting closings shall be subject to the provisions of
18paragraphs (1) through (4) of subsection (e) of Section 16 of
19this Act.
20    (9) "Independent Escrowee" means any firm, person,
21partnership, association, corporation or other legal entity,
22other than a title insurance company or a title insurance
23agent, which receives deposits, in trust, of funds or
24documents, or both, for the purpose of effecting the sale,
25transfer, encumbrance or lease of real property to be held by
26such escrowee until title to the real property that is the

 

 

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1subject of the escrow is in a prescribed condition. Federal
2and State chartered banks, savings and loan associations,
3credit unions, mortgage bankers, banks or trust companies
4authorized to do business under the Illinois Corporate
5Fiduciary Act, licensees under the Consumer Installment Loan
6Act, real estate brokers licensed pursuant to the Real Estate
7License Act of 2000, as such Acts are now or hereafter amended,
8and licensed attorneys when engaged in the attorney-client
9relationship are exempt from the escrow provisions of this
10Act. "Independent Escrowee" does not include employees or
11independent contractors of a title insurance company or title
12insurance agent authorized by a title insurance company to
13perform closing, escrow, or settlement services.
14    (10) "Single risk" means the insured amount of any title
15insurance policy, except that where 2 or more title insurance
16policies are issued simultaneously covering different estates
17in the same real property, "single risk" means the sum of the
18insured amounts of all such title insurance policies. Any
19title insurance policy insuring a mortgage interest, a claim
20payment under which reduces the insured amount of a fee or
21leasehold title insurance policy, shall be excluded in
22computing the amount of a single risk to the extent that the
23insured amount of the mortgage title insurance policy does not
24exceed the insured amount of the fee or leasehold title
25insurance policy.
26    (11) "Department" means the Department of Financial and

 

 

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1Professional Regulation.
2    (12) "Secretary" means the Secretary of Financial and
3Professional Regulation.
4    (13) "Insured closing letter" or "closing protection
5letter" means an indemnification or undertaking to a party to
6a real property transaction, from a principal such as a title
7insurance company, setting forth in writing the extent of the
8principal's responsibility for intentional misconduct or
9errors in closing the real property transaction on the part of
10a settlement agent, such as a title insurance agent or other
11settlement service provider, or an indemnification or
12undertaking given by a title insurance company or an
13independent escrowee setting forth in writing the extent of
14the title insurance company's or independent escrowee's
15responsibility to a party to a real property transaction which
16indemnifies the party against the intentional misconduct or
17errors in closing the real property transaction on the part of
18the title insurance company or independent escrowee and
19includes protection afforded pursuant to subsections (f), (g),
20and (h) of Section 16, Section 16.1, subsection (h) of Section
2117, and Section 17.1 of this Act even if such protection is
22afforded by contract.
23    (14) "Residential real property" means a building or
24buildings consisting of one to 4 residential units or a
25residential condominium unit where at least one of the
26residential units or condominium units is occupied or intended

 

 

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1to be occupied as a residence by the purchaser or borrower, or
2in the event that the purchaser or borrower is the trustee of a
3trust, by a beneficiary of that trust.
4    (15) "Financial institution" means any bank subject to the
5Illinois Banking Act, any savings and loan association subject
6to the Illinois Savings and Loan Act of 1985, any savings bank
7subject to the Savings Bank Act, any credit union subject to
8the Illinois Credit Union Act, and any federally chartered
9commercial bank, savings and loan association, savings bank,
10or credit union organized and operated in this State pursuant
11to the laws of the United States.
12(Source: P.A. 100-485, eff. 9-8-17.)
 
13    (215 ILCS 155/5)  (from Ch. 73, par. 1405)
14    Sec. 5. Certificate of authority required to engage in
15activities under this Act.
16    (a) It is unlawful for any company to engage or to continue
17in the business of title insurance without first procuring
18from the Secretary a certificate of authority stating that the
19company has complied with the requirements of Section 4 of
20this Act. An insurer that transacts any class of insurance
21other than title insurance anywhere in the United States is
22not eligible for the issuance of a certificate of authority to
23transact title insurance in this State nor for a renewal of a
24certificate of authority.
25    (b) It is unlawful for any person, firm, partnership,

 

 

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1association, corporation, or other legal entity to act as or
2hold itself out to be a title insurance agent unless first
3procuring from the Secretary a certificate of authority
4subject to the conditions of subsection (a) of Section 16.
5(Source: P.A. 94-893, eff. 6-20-06.)
 
6    (215 ILCS 155/12)  (from Ch. 73, par. 1412)
7    Sec. 12. Examinations; compliance.
8    (a) The Secretary or his authorized representative shall
9have the power and authority, and it shall be his duty, to
10cause to be visited and examined annually any title insurance
11company doing business under this Act, and to verify and
12compel compliance with the provisions of law governing it.
13    (b) The Secretary or his authorized representative agent
14shall have power and authority to compel compliance with the
15provisions of this Act and may visit and shall, only upon the
16showing of good cause, require a title insurance agent or
17independent escrowee to make appropriate records any title
18insurance company to take all legal means to obtain the
19appropriate records of its registered agents and make them
20available for examination at a time and place designated by
21the Secretary. Expenses incurred in the course of such
22examinations will be the responsibility of the title insurance
23company. In the event that a present or former registered
24agent or its successor refuses or is unable to cooperate with a
25title insurance company in furnishing the records requested by

 

 

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1the Secretary or his or her authorized agent, then the
2Secretary or his or her authorized agent shall have the power
3and authority to obtain those records directly from the
4registered agent.
5    (c) The Secretary or the Secretary's authorized
6representative shall have power and authority to compel an
7independent escrowee's compliance with the provisions of this
8Act pursuant to subsection (f) of Section 17 of this Act.
9(Source: P.A. 94-893, eff. 6-20-06.)
 
10    (215 ILCS 155/14)  (from Ch. 73, par. 1414)
11    Sec. 14. Fees.
12    (a) Every title insurance company and every independent
13escrowee subject to this Act shall pay the following fees:
14        (1) for filing the original application for a
15    certificate of authority and receiving the deposit
16    required under this Act, $500;
17        (2) for the certificate of authority, $10;
18        (3) for every copy of a paper filed in the Department
19    under this Act, $1 per folio;
20        (4) for affixing the seal of the Department and
21    certifying a copy, $2; and
22        (5) for filing the annual statement, $50.
23    (b) Each title insurance company shall remit, for all of
24its title insurance agents subject to this Act for filing an
25annual registration of its agents, an amount equal to $3 for

 

 

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1each policy issued by all of its title insurance agents in the
2immediately preceding calendar year.
3    (c) Every title insurance agent subject to this Act shall
4pay the following fees:
5        (1) for a resident of the State, filing the original
6    application for a certification of authority and for the
7    certificate of authority, $80;
8        (2) for a nonresident of the State, filing the
9    original application for a certification of authority and
10    for the certificate of authority, $120;
11        (3) for a resident and nonresident of the State,
12    filing for renewal of a certificate, $80; and
13        (4) for a resident and nonresident of the State,
14    filing for reinstatement of a lapsed certificate, $120.
15(Source: P.A. 99-104, eff. 1-1-16.)
 
16    (215 ILCS 155/14.1)
17    Sec. 14.1. Financial Institution Fund. All moneys received
18by the Department of Financial and Professional Regulation
19under this Act shall be deposited in the Financial Institution
20Fund created under Section 6z-26 of the State Finance Act for
21expenses incurred in administering this Act.
22(Source: P.A. 98-463, eff. 8-16-13.)
 
23    (215 ILCS 155/16)  (from Ch. 73, par. 1416)
24    Sec. 16. Title insurance agents.

 

 

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1    (a) No person, firm, partnership, association, corporation
2or other legal entity shall act as or hold itself out to be a
3title insurance agent unless it has been issued a certificate
4of authority by duly registered by a title insurance company
5with the Secretary. Every title insurance agent registration
6before or after the effective date of this amendatory Act of
7the 102nd General Assembly shall satisfy the requirements for
8a certificate of authority under this amendatory Act of the
9102nd General Assembly until January 1 of the calendar year
10immediately following the adoption of such rules that the
11Secretary shall adopt as may be necessary for the
12administration of granting of the certificates of authority
13for title insurance agents under this amendatory Act of the
14102nd General Assembly, and until the related application is
15either approved or disapproved; the continued recognition of
16such title insurance agent registrations during this period
17does not relieve title insurance agents and title insurance
18companies of their other obligations under this Act before the
19effective date of this amendatory Act of the 102nd General
20Assembly.
21    (b) Each application for a certificate of authority
22registration shall be made on a form specified by the
23Secretary and prepared by each title insurance agent company
24which the agent represents. The title insurance agent and
25company authorizing the agent shall retain the copy of the
26application and issued certificate of authority forward a copy

 

 

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1to the Secretary.
2    (c) Every applicant for a certificate of authority
3registration, except a firm, partnership, association, limited
4liability company, or corporation, must be 18 years or more of
5age.
6        (1) Every applicant for a certificate of authority
7    that is a firm, partnership, association, corporation, or
8    other legal entity shall designate and name at least one
9    individual who (i) has a financial or other beneficial
10    interest in the licensee and (ii) is authorized by at
11    least one title insurance company to determine
12    insurability of title.
13        (2) Included in every application for a certificate of
14    authority registration of a title insurance agent,
15    including a firm, partnership, association, limited
16    liability company, or corporation, shall be an affidavit
17    of the applicant title insurance agent, signed and
18    notarized in front of a notary public, affirming that the
19    applicant and every owner, officer, director, principal,
20    member, or manager of the applicant has never been
21    convicted or pled guilty to any felony or misdemeanor
22    involving a crime of theft or dishonesty or otherwise
23    accurately disclosing any such felony or misdemeanor
24    involving a crime of theft or dishonesty. No person who
25    has had a conviction or pled guilty to any felony or
26    misdemeanor involving theft or dishonesty may be

 

 

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1    registered by a title insurance agent company without a
2    written notification to the Secretary disclosing the
3    conviction or plea, and no such person may serve as an
4    owner, officer, director, principal, or manager of any
5    registered title insurance agent without the written
6    permission of the Secretary.
7        (3) An applicant for a certificate of authority of a
8    title insurance agent, including a firm, partnership,
9    association, limited liability company, or corporation,
10    shall include an affidavit of the applicant, signed and
11    notarized in front of a notary public, affirming that the
12    applicant is authorized by one or more title insurance
13    companies to determine insurability of title, stating the
14    title insurance company or companies with which it is
15    authorized, and listing the individuals authorized.
16        (4) Every applicant shall obtain and maintain errors
17    and omissions insurance, or its equivalent, in an amount
18    acceptable to the title insurance company authorizing the
19    agent, but in no event in an amount less than $250,000 per
20    claim and an aggregate limit of $500,000 with a deductible
21    no greater than $25,000. A title insurance company shall
22    not provide the insurance directly or indirectly on behalf
23    of a title insurance agent. In the event errors and
24    omissions insurance is unavailable generally, the
25    Department shall adopt rules for alternative methods to
26    comply with this paragraph.

 

 

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1    (d) A certificate of authority Registration shall be
2renewed on January 1 every 2 years made annually by a filing
3with the Secretary; supplemental filings registrations for a
4new agency agreement with a title insurance company agents to
5be added between certificate of authority renewal annual
6filings shall be made by the title insurance agent from time to
7time in the manner provided by the Secretary; certificates of
8authority registrations shall remain in effect unless revoked
9or suspended by the Secretary or voluntarily withdrawn by the
10title insurance agent, registrant or the title insurance agent
11no longer has any agency agreement with a title insurance
12company.
13    (e) Funds deposited in connection with any escrows,
14settlements, or closings shall be deposited in a separate
15fiduciary trust account or accounts in a bank or other
16financial institution insured by an agency of the federal
17government unless the instructions provide otherwise. The
18funds shall be the property of the person or persons entitled
19thereto under the provisions of the escrow, settlement, or
20closing and shall be segregated by escrow, settlement, or
21closing in the records of the escrow agent. The funds shall not
22be subject to any debts of the escrowee and shall be used only
23in accordance with the terms of the individual escrow,
24settlement, or closing under which the funds were accepted.
25    Interest received on funds deposited with the escrow agent
26in connection with any escrow, settlement, or closing shall be

 

 

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1paid to the depositing party unless the instructions provide
2otherwise.
3    The escrow agent shall maintain separate records of all
4receipts and disbursements of escrow, settlement, or closing
5funds.
6    The escrow agent shall comply with any rules adopted by
7the Secretary pertaining to escrow, settlement, or closing
8transactions.
9    (f) A title insurance agent shall not act as an escrow
10agent in a nonresidential real property transaction where the
11amount of settlement funds on deposit with the escrow agent is
12less than $2,000,000 or in a residential real property
13transaction unless the title insurance agent, title insurance
14company, or another authorized title insurance agent has
15committed for the issuance of title insurance in that
16transaction and the title insurance agent is authorized to act
17as an escrow agent on behalf of the title insurance company for
18which the commitment for title insurance has been issued. The
19authorization under the preceding sentence shall be given
20either (1) by an agency contract with the title insurance
21company which contract, in compliance with the requirements
22set forth in subsection (g) of this Section, authorizes the
23title insurance agent to act as an escrow agent on behalf of
24the title insurance company or (2) by a closing protection
25letter in compliance with the requirements set forth in
26Section 16.1 of this Act, issued by the title insurance

 

 

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1company to the seller, buyer, borrower, and lender. A closing
2protection letter shall not be issued by a title insurance
3agent. The provisions of this subsection (f) shall not apply
4to the authority of a title insurance agent to act as an escrow
5agent under subsection (g) of Section 17 of this Act.
6    (g) If an agency contract between the title insurance
7company and the title insurance agent is the source of the
8authority under subsection (f) of this Section for a title
9insurance agent to act as escrow agent for a real property
10transaction, then the agency contract shall provide for no
11less protection from the title insurance company to all
12parties to the real property transaction than the title
13insurance company would have provided to those parties had the
14title insurance company issued a closing protection letter in
15conformity with Section 16.1 of this Act.
16    (h) A title insurance company shall be liable for the acts
17or omissions of its title insurance agent as an escrow agent if
18the title insurance company has authorized the title insurance
19agent under subsections (f) and (g) of this Section 16 and only
20to the extent of the liability undertaken by the title
21insurance company in the agency agreement or closing
22protection letter. The liability, if any, of the title
23insurance agent to the title insurance company for acts and
24omissions of the title insurance agent as an escrow agent
25shall not be limited or otherwise modified because the title
26insurance company has provided closing protection to a party

 

 

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1or parties to a real property transaction escrow, settlement,
2or closing. The escrow agent shall not charge a fee for
3protection provided by a title insurance company to parties to
4real property transactions under subsections (f) and (g) of
5this Section 16 and Section 16.1, but shall collect from the
6parties the fee charged by the title insurance company and
7shall promptly remit the fee to the title insurance company.
8The title insurance company may charge the parties a
9reasonable fee for protection provided pursuant to subsections
10(f) and (g) of this Section 16 and Section 16.1 and shall not
11pay any portion of the fee to the escrow agent. The payment of
12any portion of the fee to the escrow agent by the title
13insurance company, shall be deemed a prohibited inducement or
14compensation in violation of Section 24 of this Act.
15    (i) The Secretary shall adopt and amend such rules as may
16be required for the proper administration and enforcement of
17this Section 16 consistent with the federal Real Estate
18Settlement Procedures Act and Section 24 of this Act.
19(Source: P.A. 98-398, eff. 1-1-14; 98-832, eff. 1-1-15;
2099-104, eff. 1-1-16.)
 
21    (215 ILCS 155/18)  (from Ch. 73, par. 1418)
22    Sec. 18. Disclosure of financial interests No referral
23payments; kickbacks.
24    (a) Application of this Section is limited to residential
25properties of 4 or fewer units, at least one of which units is

 

 

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1occupied or to be occupied by an owner, legal or beneficial.
2    (b) No title insurance company, independent escrowee, or
3title insurance agent may issue a title insurance policy to,
4or provide services to an applicant if it knows or has reason
5to believe that the applicant was referred to it by any
6producer of title business or by any associate of such
7producer, where the producer, the associate, or both, have a
8financial interest in the title insurance company, independent
9escrowee, or title insurance agent to which business is
10referred unless the producer has disclosed to any party paying
11for the products or services, or his representative, the
12financial interest of the producer of title business or
13associate referring the title business and a disclosure of an
14estimate of those charges to be paid as described in Section
1519. Such disclosure must be made in writing on forms
16prescribed by the Secretary prior to the time that the
17commitment for title insurance is issued. The title insurance
18company, independent escrowee, or title insurance agent shall
19maintain the disclosure forms for a period of 3 years.
20    (c) Each title insurance company, independent escrowee,
21and title insurance agent shall file with the Secretary, on
22forms prescribed by the Secretary, reports setting forth the
23names and addresses of those persons, if any, who have had a
24financial interest in the title insurance company, independent
25escrowee, or title insurance agent during the calendar year,
26who are known or reasonably believed by the title insurance

 

 

HB3064- 20 -LRB102 14548 BMS 19901 b

1company, independent escrowee, or title insurance agent to be
2producers of title business or associates of producers.
3        (1) Each title insurance company and independent
4    escrowee shall file the report required under this
5    subsection with its application for a certificate of
6    authority and at any time there is a change in the
7    information provided in the last report.
8        (2) Each title insurance agent shall file the report
9    required under this subsection with its title insurance
10    company for inclusion with its application for
11    registration and at any time there is a change in the
12    information provided in its last report.
13        (3) Each title insurance company, independent
14    escrowee, or title insurance agent doing business on the
15    effective date of this Act shall file the report required
16    under this subsection within 90 days after such effective
17    date.
18(Source: P.A. 94-893, eff. 6-20-06.)
 
19    (215 ILCS 155/18.2 new)
20    Sec. 18.2. Rate and service fee filings.
21    (a) Rate and service fee filing requirements.
22        (1) Every title insurance company shall file with the
23    Secretary every manual of classifications, rules, plans,
24    forms, and schedules of fees and every modification of any
25    of the foregoing relating to the rates that it proposes to

 

 

HB3064- 21 -LRB102 14548 BMS 19901 b

1    use. Every such filing shall state the proposed effective
2    date and shall indicate the character and extent of the
3    coverage contemplated. Every title insurance company and
4    independent escrowee shall file with the Secretary the
5    specification of services and schedule of fees for each
6    fee intended to be charged to the parties to a transaction
7    pursuant to paragraph (5) of subsection (k) of this
8    Section.
9        (2) A title insurance company may satisfy its
10    obligations to make such filings by becoming a member of,
11    or a subscriber to, a licensed rating organization that
12    makes such filings and by authorizing the Secretary to
13    accept such filings on its behalf.
14        (3) The Secretary shall make such review of the
15    filings as may be necessary to carry out the provisions of
16    this Act and either approve or disapprove a filing or any
17    part of a filing, including the proposed effective date.
18        (4) Subject to the provisions of paragraphs (5) and
19    (6) and either approval or disapproval of the Secretary,
20    each filing shall be on file for a period of 30 days before
21    it can become effective only by approval of the Secretary.
22    The Secretary may, upon written notice to the person
23    making the filing within the 30-day period, extend the
24    period no more than 30 days to enable the Secretary to
25    complete the review of the filing. Further extensions of
26    the waiting period may be made with the consent of the

 

 

HB3064- 22 -LRB102 14548 BMS 19901 b

1    title insurance company or rating organization making the
2    filing. Upon written application by the title insurance
3    company or rating organization making the filing, the
4    Secretary may authorize a filing or any part of a filing to
5    become effective before the expiration of the waiting
6    period or any extension.
7        (5) When the Secretary finds that any rate for a
8    particular kind or class of risk cannot practicably be
9    filed before it is used, or any contract or kind of title
10    insurance, by reason of rarity or peculiar circumstances,
11    does not lend itself to advance determination and filing
12    of rates, the Secretary may permit the rates to be used
13    without a previous filing and waiting period, and such
14    rates can be effective only by approval of the Secretary.
15        (6) A rate in excess of a filing may be used on any
16    specific risk upon the written consent of the insured,
17    filed with the Secretary, explaining the applicability of
18    the rate to the specific risk; the rate becomes effective
19    when the consent is filed.
20    (b) Justification for rates. A rate filing shall be
21accompanied by a statement of the title insurance company or
22rating organization making the filing setting forth the basis
23upon which the rate was fixed and the fees are to be computed.
24Any filing may be justified by:
25        (1) the experience or judgment of the title insurance
26    company or rating organization making the filing;

 

 

HB3064- 23 -LRB102 14548 BMS 19901 b

1        (2) the experience of other title insurance companies
2    or rating organizations; or
3        (3) any other factors that the title insurance company
4    or rating organization deems relevant.
5    (c) Making of rates.
6        (1) In making rates, due consideration shall be given
7    to past and prospective loss experience, to exposure to
8    loss, to underwriting practice and judgment, to the extent
9    appropriate, to past and prospective expenses, the
10    expenses incurred by title insurance companies, to a
11    reasonable margin for profit and contingencies, and to all
12    other relevant factors both within and outside of this
13    State.
14        (2) Rates shall not be inadequate or unfairly
15    discriminatory, nor shall rates be excessive; that is,
16    such as to permit title insurance companies to earn a
17    greater profit, after payment of all taxes upon all
18    income, than is necessary to enable them to earn over the
19    years sufficient amounts to pay their actual expenses and
20    losses arising in the conduct of their title insurance
21    business, including the actual costs of maintaining a
22    title plant, plus a reasonable profit.
23        (3) In ascertaining the estimated future earnings of
24    title insurance companies, the Secretary shall utilize a
25    properly weighted cross section of title insurance
26    companies operating in this State representative of the

 

 

HB3064- 24 -LRB102 14548 BMS 19901 b

1    average of normally efficiently operated title insurance
2    companies including on a weighted basis, both title
3    insurance companies having their own title plants, and
4    those not operating upon the title plant system. In
5    ascertaining what is a reasonable profit after payment of
6    all taxes on such income, the Secretary shall give due
7    consideration to the following matters:
8            (A) the average rates of profit after payment of
9        taxes on all income earned by other industry
10        generally;
11            (B) the desirability for stability of rate
12        structure;
13            (C) the necessity of insuring through growth in
14        assets in times of high business activity, the
15        financial solvency of title insurance companies in
16        times of economic depression; and
17            (D) The necessity for earning sufficient dividends
18        on the stock of title insurance companies to induce
19        capital to be invested in title insurance companies.
20        (4) The systems of expense provisions and the amount
21    of expense charged against each class of contract or
22    policy may vary between title insurance companies. Rates
23    may, in the discretion of any title insurance company, be
24    less than the cost of performing the work in the case of
25    smaller insurances, and the excess may be charged against
26    the larger insurances without rendering the rates unfairly

 

 

HB3064- 25 -LRB102 14548 BMS 19901 b

1    discriminatory.
2    (d) Disapproval of filings. If the Secretary finds that
3the filing or a part of the filing does not meet the
4requirements of this Act, the Secretary shall issue an order
5specifying in what respects it fails to meet the requirements
6of this Act. If the filing or part of the filing already has
7become effective, the order shall also state when, within a
8reasonable period, such filing or part shall be deemed no
9longer effective. A title insurance company or rating
10organization shall have the right at any time to withdraw a
11filing or a part of the filing, subject to the provisions of
12subsection (f) of this Section regarding deviations. Copies of
13the order shall be sent to every such title insurance company
14and rating organization. The order shall not affect any
15contract or policy made or issued prior to the expiration of
16the period set forth in the order.
17    (e) Rating organizations.
18        (1) A corporation, an unincorporated association, a
19    partnership, or an individual, whether located within or
20    outside this State, may make application to the Secretary
21    for a license as a rating organization for title insurance
22    companies.
23            (A) An entity seeking a license as a rating
24        organization shall file:
25                (i) a copy of its constitution, its articles
26            of agreement or association or its certificate of

 

 

HB3064- 26 -LRB102 14548 BMS 19901 b

1            incorporation, and of its bylaws, rules, and
2            regulations governing the conduct of its business;
3                (ii) a list of its members and subscribers;
4                (iii) the name and address of a resident of
5            this State upon whom notices or orders of the
6            Secretary or process affecting such rating
7            organization may be served; and
8                (iv) a statement of its qualifications as a
9            rating organization.
10            (B) If the Secretary finds that the applicant is
11        competent, trustworthy, and otherwise qualified to act
12        as a rating organization, and that its constitution,
13        articles of agreement or association or certificate of
14        incorporation, and its bylaws, rules, and regulations
15        governing the conduct of its business conforms to the
16        requirements of law, the Secretary shall issue a
17        license authorizing the applicant to act as a rating
18        organization for title insurance. Every such
19        application shall be granted or denied in whole or in
20        part by the Secretary within 60 days after the date of
21        its filing. Licenses issued under this Section shall
22        remain in effect for 3 years unless sooner suspended
23        or revoked by the Secretary or withdrawn by the
24        licensee. The fee for the license shall be $25.
25        Licenses issued under this Section may be suspended or
26        revoked by the Secretary, after hearing upon notice,

 

 

HB3064- 27 -LRB102 14548 BMS 19901 b

1        in the event the rating organization ceases to meet
2        the requirements of this subsection.
3            (C) Every rating organization shall notify the
4        Secretary promptly of every change in:
5                (i) its constitution, its articles of
6            agreement or association or its certificate of
7            incorporation, and its bylaws, rules, and
8            regulations governing the conduct of its business;
9                (ii) its list of members and subscribers; and
10                (iii) the name and address of the resident of
11            this State designated by it upon whom notices or
12            orders of the Secretary or process affecting such
13            rating organization may be served.
14        (2) Subject to rules adopted by the Secretary, each
15    rating organization shall permit any title insurance
16    company not a member to be a subscriber to its rating
17    services. Each rating organization shall furnish its
18    rating services without discrimination to its members and
19    subscribers. The furnishing of rating services without
20    discrimination to its members and subscribers, or the
21    refusal of any rating organization to admit a title
22    insurance company as a subscriber, shall, at the request
23    of any subscriber or any such title insurance company, be
24    reviewed by the Secretary at a hearing held upon at least
25    10 days' written notice to such rating organization and to
26    such subscriber or title insurance company. If the

 

 

HB3064- 28 -LRB102 14548 BMS 19901 b

1    Secretary finds that the actions of the rating
2    organization were discriminatory, the Secretary shall
3    order that such actions cease. If the rating organization
4    fails to grant or reject an application of a title
5    insurance company for subscribership within 30 days after
6    it was made, the title insurance company may request a
7    review by the Secretary as if the application had been
8    rejected. If the Secretary finds that the title insurance
9    company has been refused admittance to the rating
10    organization as a subscriber without justification, the
11    Secretary shall order the rating organization to admit the
12    title insurance company as a subscriber. If the Secretary
13    finds that the action of the rating organization was
14    justified, the Secretary shall make an order affirming its
15    action.
16        (3) Cooperation among rating organizations, or among
17    rating organizations and title insurance companies, and
18    concert of action among title insurance companies under
19    the same general management and control in rate making or
20    in other matters within the scope of this Act is hereby
21    authorized, provided that the filings are subject to all
22    the provisions of this Act that are applicable to filings
23    generally. The Secretary may review such activities and
24    practices and if, after a hearing, the Secretary finds
25    that any such activity or practice is unfair or
26    unreasonable or otherwise inconsistent with the provisions

 

 

HB3064- 29 -LRB102 14548 BMS 19901 b

1    of this Act, the Secretary may issue a written order
2    specifying in what respects such activity or practice is
3    unfair or unreasonable or otherwise inconsistent with the
4    provisions of this Act and requiring the discontinuance of
5    such activity or practice.
6    (f) Deviations. Every member of or subscriber to a rating
7organization shall adhere to the filings made on its behalf by
8such organization, except that any title insurance company
9that is a member of or subscriber to a rating organization may
10file with the Secretary a decrease or increase to be applied to
11any or all elements of the fees produced by the rating system
12so filed for a class of title insurance that is found by the
13Secretary to be a proper rating unit for the application of
14such uniform decrease or increase, or to be applied to the
15rates for a particular area. Such deviation filing shall
16specify the basis for the modification and shall be
17accompanied by the data or historical pattern upon which the
18applicant relies. A copy of the filing and data shall be sent
19simultaneously to such rating organization. Any such deviation
20filing shall be on file for a waiting period of 30 days before
21it becomes effective. The Secretary shall make such review of
22the deviation filing as may be necessary to carry out the
23provisions of this Act, and either approve or disapprove the
24filing or any part of the filing, including the proposed
25effective date. Extension of the waiting period may be made in
26the same manner that the period is extended in the case of rate

 

 

HB3064- 30 -LRB102 14548 BMS 19901 b

1filings. Upon written application of the person making the
2filing, the Secretary may authorize a deviation filing or any
3part of the filing to become effective before the expiration
4of the waiting period or any extension. Deviation filings
5shall be subject to the provisions of subsection (d) of this
6Section. Each deviation shall be effective for at least one
7year after the date such deviation is approved unless
8terminated sooner with the approval of the Secretary, or in
9accordance with the provisions of subsection (d) of this
10Section.
11    (g) Examinations of rating organizations. The Secretary
12shall, at least once in 5 years, make or cause to be made an
13examination of a rating organization licensed under this Act
14in this State. The reasonable costs of the examination shall
15be paid by the rating organization examined upon presentation
16to it of a detailed account of such costs. The officers,
17managers, agents, and employees of the rating organization may
18be examined at any time under oath and shall exhibit all books,
19records, accounts, documents, or agreements governing its
20method of operation. The Secretary shall furnish 2 copies of
21the examination report to the organization examined and shall
22notify such organization that it may, within 20 days, request
23a hearing on the report or on any facts or recommendations
24contained in the report. Before filing the report for public
25inspection, the Secretary shall grant a hearing to the
26organization examined. The report of the examination, when

 

 

HB3064- 31 -LRB102 14548 BMS 19901 b

1filed for public inspection, shall be admissible in evidence
2in any action or proceeding brought by the Secretary against
3the organization examined, or its officers or agents, and
4shall be prima facie evidence of facts stated in the report.
5The Secretary may withhold the report of the examination from
6public inspection for such time as the Secretary may deem
7proper. In lieu of the examination, the Secretary may accept
8the report of an examination made by the title insurance
9supervisory official of another state pursuant to the laws of
10that state.
11    (h) Rate administration.
12        (1) The Secretary shall adopt reasonable rules and
13    statistical plans, reasonably adapted to each of the
14    rating systems on file with the Secretary, which may be
15    modified from time to time, and which shall be used by each
16    title insurance company in the recording and reporting of
17    the composition of its business, its loss and countrywide
18    expense experience and those of its title insurance
19    underwriters in order that the experience of all title
20    insurance companies may be made available, at least
21    annually, in such form and detail as may be necessary to
22    aid the Secretary in determining whether rating systems
23    comply with the standards set forth in this Act. The rules
24    and plans may also provide for the recording and reporting
25    of expense experience items that are specially applicable
26    to this State and are not susceptible of determination by

 

 

HB3064- 32 -LRB102 14548 BMS 19901 b

1    a prorating of countrywide expense experience. In adopting
2    the rules and plans, the Secretary shall give due
3    consideration to the rating systems on file with the
4    Secretary, and in order that the rules and plans may be as
5    uniform as is practicable among the several states, to the
6    rules and to form of the plans used for such rating systems
7    in other states. The rules and plans shall not place an
8    unreasonable burden of expense on any title insurance
9    company. No title insurance company shall be required to
10    record or report its expense and loss experience on a
11    classification basis that is inconsistent with the rating
12    system filed by it, nor shall any title insurance company
13    be required to report its experience to any agency of
14    which it is not a member or subscriber. The Secretary may
15    designate one or more rating organizations or other
16    agencies to assist the Secretary in gathering such
17    experience and making compilations, and such compilations
18    shall be made available, subject to reasonable rules
19    adopted by the Secretary, to title insurance companies and
20    rating organizations.
21        (2) Reasonable rules and plans may be adopted by the
22    Secretary for the interchange of data necessary for the
23    application of rating plans.
24        (3) In order to further uniform administration of rate
25    regulatory laws, the Secretary and every title insurance
26    company and rating organization may exchange information

 

 

HB3064- 33 -LRB102 14548 BMS 19901 b

1    and experience data with title insurance supervisory
2    officials, title insurance companies, and title insurance
3    rating organizations in other states, and may consult with
4    them with respect to rate making and the application of
5    rating systems.
6        (4) In addition to any powers expressly enumerated in
7    this Act, the Secretary shall have full power and
8    authority, and it shall be their duty, to enforce and
9    carry out by rules, orders, or otherwise the provisions of
10    this Act and the full intent. The Secretary may adopt
11    rules consistent with this Act as may be necessary or
12    proper in the exercise of his or her powers or for the
13    performance of his or her duties under this Act.
14    (i) False or misleading information. No person or
15organization shall willfully withhold information from or
16knowingly give false or misleading information to the
17Secretary, any statistical agency designated by the Secretary,
18any rating organization, or any title insurance company that
19will affect the rates or fees chargeable under this Act.
20    (j) Penalties.
21        (1) The Secretary may, if the Secretary finds that any
22    person or organization has violated any provision of this
23    Section, impose a penalty of not more than $500 for each
24    such violation, but if the Secretary finds such violation
25    to be willful, the Secretary may impose a penalty of not
26    more than $5,000 for each such violation. Such penalties

 

 

HB3064- 34 -LRB102 14548 BMS 19901 b

1    may be in addition to any other penalty provided by law.
2        (2) The Secretary may suspend the license of a rating
3    organization or the certificate of authority of a title
4    insurance company that fails to comply with an order of
5    the Secretary within the time limited by such order, or
6    any extension that the Secretary may grant. The Secretary
7    shall not suspend the license of any rating organization
8    or the certificate of authority of a title insurance
9    company for failure to comply with an order until the time
10    prescribed for an appeal has expired or, if an appeal has
11    been taken, until such order has been affirmed. The
12    Secretary may determine when a suspension of license shall
13    become effective, and it shall remain in effect for the
14    period fixed by the Secretary, unless the Secretary
15    modifies or rescinds the suspension, or until the order
16    upon which the suspension is based is modified, rescinded,
17    or reversed.
18        (3) No penalty shall be imposed and no license or
19    certificate of authority shall be suspended or revoked
20    pursuant to this Section except upon a written order of
21    the Secretary stating his or her findings made after a
22    hearing held upon not less than 10 days' written notice to
23    the holder specifying the alleged violation.
24        (4) All hearings provided for in this Section shall be
25    conducted, and the decision of the Secretary on the issue
26    or filing involved shall be rendered, in accordance with

 

 

HB3064- 35 -LRB102 14548 BMS 19901 b

1    the Administrative Review Law.
2    (k) In all circumstances, whether involving rates filed by
3a rating organization or title insurance company:
4        (1) separate filings shall be provided for the 2
5    following geographic zones:
6            (A) Zone 1 comprising the counties of Cook, Lake,
7        DuPage, McHenry, Kane, Will, Grundy, and Kendall; and
8            (B) Zone 2 comprising all other counties within
9        the State.
10        The Secretary shall submit a report to the Governor
11    and General Assembly no later than January 1, 2025 as to
12    whether multiple zones are justified based on differences
13    in costs between the zones.
14        (2) Rates shall be separated into classes based on
15    monetary insurance ranges without distinction of
16    commercial or residential use of the property.
17        (3) From the owner's policy premium, loan policy
18    premium, and residential real property endorsement
19    charges, which does not include closing protection letter
20    charges, a title agent shall retain 80% and remit 20% to a
21    title insurance company if services are performed by the
22    title insurance agent to at least (i) determine
23    insurability of title, which includes title examination
24    and title clearance, and (ii) issue title insurance
25    commitments, policies, and endorsements. For endorsement
26    charges that are not for residential real property as

 

 

HB3064- 36 -LRB102 14548 BMS 19901 b

1    defined in Section 3 of this Act, which does not include
2    closing protection letter charges, a title agent shall
3    retain 80% and remit 20% to a title insurance company
4    provided the title agent is authorized pursuant to its
5    agency contract to issue the endorsement and completes the
6    work necessary to issue the endorsement. If the title
7    agent is not authorized pursuant to its agency agreement
8    to issue the endorsement and does not complete the work
9    necessary to issue the endorsement, the title agent shall
10    retain 0% and remit 100% of the charge to a title insurance
11    company.
12        (4) Any fees charged to the parties to the transaction
13    other than the owner's policy premium, loan policy
14    premium, and endorsement charges shall not be retained or
15    remitted between a title insurance company and title
16    insurance agent, or with any other entity or individual,
17    unless the charges are being retained or remitted in an
18    amount directly related to services actually performed.
19        (5) Subject to all other provisions of this Section
20    regarding rate filing requirements, a filing shall also
21    include a specification of services to be performed and
22    schedule of fees for each fee intended to be charged to the
23    parties to the transaction, which includes, but is not
24    limited to, closing fees, escrow fees, settlement fees,
25    closing protection letter fees subject to Section 16.1 of
26    this Act, and like charges, and is applicable to services

 

 

HB3064- 37 -LRB102 14548 BMS 19901 b

1    provided by an independent escrowee, which must similarly
2    file a specification of services and schedule of fees with
3    the Secretary.
 
4    (215 ILCS 155/21)  (from Ch. 73, par. 1421)
5    Sec. 21. Regulatory action.
6    (a) The Secretary may refuse to grant, and may suspend or
7revoke, any certificate of authority, registration, or license
8issued pursuant to this Act or may impose a fine for a
9violation of this Act if he determines that the holder of or
10applicant for such certificate, registration, or license:
11        (1) has intentionally made a material misstatement or
12    fraudulent misrepresentation in relation to a matter
13    covered by this Act;
14        (2) has misappropriated or tortiously converted to its
15    own use, or illegally withheld, monies held in a fiduciary
16    capacity;
17        (3) has demonstrated untrustworthiness or incompetency
18    in transacting the business of guaranteeing titles to real
19    estate in such a manner as to endanger the public;
20        (4) has materially misrepresented the terms or
21    conditions of contracts or agreements to which it is a
22    party;
23        (5) has paid any commissions, discounts or any part of
24    its premiums, fees or other charges to any person in
25    violation of any State or federal law or regulations or

 

 

HB3064- 38 -LRB102 14548 BMS 19901 b

1    opinion letters issued under the federal Real Estate
2    Settlement Procedures Act of 1974;
3        (5.1) has accepted or referred a title order or
4    performed title services with knowledge that the order was
5    placed in exchange for the express or implicit promise
6    that a consumer has been or will be referred to that
7    provider for services;
8        (5.2) has given or accepted any portion of any charge
9    made or received for the rendering of a real estate
10    settlement service in connection with a transaction other
11    than for services actually performed;
12        (5.3) has disbursed funds prior to the actual delivery
13    of funds acceptable to the closing and settlement services
14    agent;
15        (5.4) has disbursed of closing and settlement services
16    funds before all necessary conditions of the transaction
17    have been met;
18        (5.5) has paid for, furnished or offered to pay for or
19    furnish any reward or compensation for any past, present,
20    or future title insurance business or closing and
21    settlement services or any other title business,
22    including, but not limited to, the payment of a fee to an
23    attorney for the referral of title business;
24        (5.6) has paid or offered to pay any fee to a producer
25    of title business for making an inspection or appraisal of
26    property;

 

 

HB3064- 39 -LRB102 14548 BMS 19901 b

1        (5.7) has received securities of the title insurance
2    company, title insurance agent, or independent escrowee at
3    prices below the normal market price, or bonds or
4    debentures that guarantee a higher than normal interest
5    rate, whether or not the consummation of the transaction
6    is directly or indirectly related to the number of closing
7    and settlement services or title orders coming to the
8    title insurance company, title insurance agent or
9    independent escrowee through the efforts of that person;
10        (5.8) has furnished to any producer of title business
11    or associate of a producer reports containing publicly
12    recorded information, appraisals, estimates of income
13    production potential, information kits, or similar
14    packages containing information about one or more parcels
15    of real property helpful to any producer of title business
16    without making a charge that is commensurate with the
17    actual cost of the work performed and the material
18    furnished; Additionally:
19            (A) There must be a written service agreement
20        between a title agent and any entity providing any
21        closing, title, or ancillary related services on
22        behalf of a title agent. Pursuant to this written
23        service agreement, a service fee must be charged to
24        the title agent and paid by the title agent to the
25        service provider. The service fee charge is in
26        addition to any search fee charged to the title agent

 

 

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1        and cannot be added on to the charges to the seller,
2        buyer, borrower, or lender. The charge for a service
3        fee shall be no less than $350; and
4            (B) Pursuant to an agency agreement or service
5        agreement, the cost of searches procured on behalf of
6        the title agent must be charged to the title agent and
7        paid by the title agent to the provider of such
8        searches in an amount commensurate with the actual
9        cost of the work performed and the material furnished.
10        The search fee charge is in addition to any service fee
11        charged to the title agent and cannot be added on to
12        the charges to the seller, buyer, borrower, or lender.
13        (5.9) has made or guaranteed or has offered to make or
14    guarantee, either directly or indirectly, any loan to any
15    producer of title business or associate of a producer with
16    terms more favorable than otherwise available to the
17    producer;
18        (5.10) has guaranteed, or offered to guarantee the
19    proper performance of closing and settlement services or
20    undertakings that are to be performed by any producer of
21    title business, except as authorized pursuant to Sections
22    16 and 16.1 of this Act;
23        (5.11) has provided, or offered to provide, either
24    directly or indirectly, a compensating balance or deposit
25    in a lending institution either for the express or implied
26    purpose of influencing the placement or channeling of

 

 

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1    title insurance business by the lending institution; this
2    provision does not prohibit the maintenance by a title
3    insurance company, title agent, or independent escrowee of
4    demand deposits or escrow deposits that are reasonably
5    necessary for use in the ordinary course of the business
6    of the title insurance company, title agent, or
7    independent escrowee;
8        (5.12) has paid for or offered to pay for the fees or
9    charges of an outside professional, such as an attorney,
10    engineer, appraiser, or surveyor, whose services are
11    required by any producer of title business to structure or
12    complete a particular transaction;
13        (5.13) has provided or offered to provide non-title
14    services, such as computerized bookkeeping, forms
15    management, computer programming, or any similar benefit,
16    without a charge that is commensurate with the actual cost
17    to any producer of title business or to any associate of a
18    producer of title business;
19        (5.14) has furnished or offered to furnish all or any
20    part of the time or productive effort of any employee of
21    the title insurance company, title insurance agent, or
22    independent escrowee, such as office manager, escrow
23    officer, secretary, clerk, or messenger, to any producer
24    of the title business or associate of a producer of title
25    business;
26        (5.15) has paid for or offered to pay for all or any

 

 

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1    part of the salary of an employee of any producer of title
2    business;
3        (5.16) has paid for or offered to pay for the salary or
4    any part of the salary of a relative of any producer of
5    title business if that payment is in excess of the
6    reasonable value of work performed by the relative on
7    behalf of the title insurance company, title insurance
8    agent or independent escrowee;
9        (5.17) has paid for or offered to pay for services by
10    any producer of title business that are ordinarily to be
11    performed by the producer of title business in his or her
12    licensed capacity as a real estate or mortgage broker or
13    salesman or agent;
14        (5.18) has furnished or offered to furnish, or paid
15    for or offered to pay for, furniture, office supplies,
16    telephones, facsimile machines, equipment, or automobiles
17    to any producer of title business, or has paid for or
18    offered to pay for any portion of the cost of renting,
19    leasing, operating or maintaining any of these items;
20        (5.19) has paid for, furnished, or waived, or offered
21    to pay for, furnish, or waive, all or any part of the rent
22    for space occupied by any producer of title business;
23        (5.20) has rented or offered to rent space from any
24    producer of title business, regardless of the purpose, at
25    a rent that is excessive when compared with rents for
26    comparable space in the geographic area, or has paid or

 

 

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1    offered to pay rent based in whole or in part on the volume
2    of business generated by any producer of title business;
3        (5.21) has paid for or offered to pay for gifts,
4    vacations, business trips, convention expenses, travel
5    expenses, membership fees, registration fees, lodging, or
6    meals on behalf of a producer of title insurance, directly
7    or indirectly, or supplied letters of credit, credit
8    cards, or any such benefits;
9        (5.22) has paid for or offered to pay for the
10    cancellation fee for a title report or other fee on behalf
11    of any producer of title business either before or after
12    inducing the producer of title business to cancel an order
13    with another title insurance company, title insurance
14    agent, or independent escrowee;
15        (5.23) has paid for, furnished, or offered to pay for
16    or furnish any business form to any producer of title
17    business, other than a form regularly used in the conduct
18    of the title insurance company's business, that is
19    furnished for the convenience of the title insurance
20    company and does not constitute a direct monetary benefit
21    to any producer of title business;
22        (5.24) has given trading stamps, cash redemption
23    coupons, or similar items to any producer of title
24    business;
25        (6) has failed to comply with the deposit and reserve
26    requirements of this Act or any other requirements of this

 

 

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1    Act;
2        (7) has committed fraud or misrepresentation in
3    applying for or procuring any certificate of authority,
4    registration, or license issued pursuant to this Act;
5        (8) has a conviction or plea of guilty or plea of nolo
6    contendere in this State or any other jurisdiction to (i)
7    any felony or (ii) a misdemeanor, an essential element of
8    which is dishonesty or fraud or larceny, embezzlement, or
9    obtaining money, property, or credit by false pretenses or
10    by means of a confidence game;
11        (9) has been disciplined by another state, the
12    District of Columbia, a territory, foreign nation, a
13    governmental agency, or any entity authorized to impose
14    discipline if at least one of the grounds for that
15    discipline is the same as or equivalent to one of the
16    grounds for which a title insurance company, title
17    insurance agent, or independent escrowee may be
18    disciplined under this Act or if at least one of the
19    grounds for that discipline involves dishonesty; a
20    certified copy of the record of the action by the other
21    state or jurisdiction shall be prima facie evidence
22    thereof;
23        (10) has advertising that is inaccurate, misleading,
24    or contrary to the provisions of this Act;
25        (11) has knowingly and willfully made any substantial
26    misrepresentation or untruthful advertising;

 

 

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1        (12) has made any false promises of a character likely
2    to influence, persuade, or induce;
3        (13) has knowingly failed to account for or remit any
4    money or documents coming into the possession of a title
5    insurance company, title insurance agent, or independent
6    escrowee that belong to others;
7        (14) has engaged in dishonorable, unethical, or
8    unprofessional conduct of a character likely to deceive,
9    defraud, or harm the public;
10        (15) has violated the terms of a disciplinary order
11    issued by the Department;
12        (16) has disregarded or violated any provision of this
13    Act or the published rules adopted by the Department to
14    enforce this Act or has aided or abetted any individual,
15    partnership, registered limited liability partnership,
16    limited liability company, or corporation in disregarding
17    any provision of this Act or the published rules; or
18        (17) has acted as a title insurance company, title
19    insurance agent, or independent escrowee without a
20    certificate of authority, registration, or license after
21    the title insurance company, title insurance agent, or
22    independent escrowee's certificate of authority,
23    registration, or license was inoperative.
24    (a-1) Nothing in subsection (a) shall be construed as
25prohibiting:
26        (1) publishing or printing and disseminating any

 

 

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1    educational information, notwithstanding that the
2    information may be of benefit to a producer of title
3    business;
4        (2) distributing information, whether printed or oral,
5    advertising novelties, and gift items not to exceed $25 in
6    value that bear the name of the giver (but not the name of
7    the recipient) to producers of title business;
8        (3) providing reasonable promotional and educational
9    activities that are not conditioned on the referral of
10    business and that do not involve the defraying of expenses
11    that otherwise would be incurred by persons in a position
12    to refer settlement services or business incident to those
13    services, such as a reception by a title company, seminars
14    on title matters offered to professionals, furnishing
15    property descriptions and names of record owners without
16    charge to lenders, real estate brokers, attorneys, or
17    others, or distribution of calendars and other promotional
18    material that do not exceed $25 in value;
19        (4) the payment of a fee:
20            (A) that bears a reasonable relationship to the
21        value of the services rendered or performed:
22                (i) by any person or party to attorneys at law
23            for services actually rendered;
24                (ii) by a title company to its duly appointed
25            agent for services actually performed in the
26            issuance of a policy of title insurance; or

 

 

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1                (iii) by a lender to its duly appointed agent
2            for services actually performed in the making of a
3            loan; and
4            (B) to a settlement service provider for services
5        outside of the normal scope of that provider's
6        services to the parties to the transaction;
7        (5) the payment of a bona fide salary or compensation
8    or other payment for goods or facilities actually
9    furnished or for services actually performed, so long as
10    the salary, compensation, or other payment bears a
11    reasonable relationship to the value of the services,
12    goods, or facilities;
13        (6) proportionate returns on an ownership or franchise
14    interest;
15        (7) ordinary and customary business entertainment or
16    promotional activities with reasonable frequency not to
17    exceed $100 in value per person, per event by title
18    insurance companies, title insurance agents, or
19    independent escrowees that are not directly or indirectly
20    consideration as an inducement or compensation for the
21    referral of title business or for the referral of any
22    escrow or other service from a title insurance company,
23    title insurance agent, or independent escrowee.
24    (b) In every case where a registration or certificate is
25suspended or revoked, or an application for a registration or
26certificate or renewal thereof is refused, the Secretary shall

 

 

HB3064- 48 -LRB102 14548 BMS 19901 b

1serve notice of his action, including a statement of the
2reasons for his action, as provided by this Act. When a notice
3of suspension or revocation of a certificate of authority is
4given to a title insurance company, the Secretary shall also
5notify all the registered agents of that title insurance
6company of the Secretary's action.
7    (c) In the case of a refusal to issue or renew a
8certificate or accept a registration, the applicant or
9registrant may request in writing, within 30 days after the
10date of service, a hearing. In the case of a refusal to renew,
11the expiring registration or certificate shall be deemed to
12continue in force until 30 days after the service of the notice
13of refusal to renew, or if a hearing is requested during that
14period, until a final order is entered pursuant to such
15hearing.
16    (d) The suspension or revocation of a registration or
17certificate shall take effect upon service of notice thereof.
18The holder of any such suspended registration or certificate
19may request in writing, within 30 days of such service, a
20hearing.
21    (e) In cases of suspension or revocation of registration
22pursuant to subsection (a), the Secretary may, in the public
23interest, issue an order of suspension or revocation which
24shall take effect upon service of notification thereof. Such
25order shall become final 60 days from the date of service
26unless the registrant requests in writing, within such 60

 

 

HB3064- 49 -LRB102 14548 BMS 19901 b

1days, a formal hearing thereon. In the event a hearing is
2requested, the order shall remain temporary until a final
3order is entered pursuant to such hearing.
4    (f) Hearing shall be held at such time and place as may be
5designated by the Secretary either in the City of Springfield,
6the City of Chicago, or in the county in which the principal
7business office of the affected registrant or certificate
8holder is located.
9    (g) The suspension or revocation of a registration or
10certificate or the refusal to issue or renew a registration or
11certificate shall not in any way limit or terminate the
12responsibilities of any registrant or certificate holder
13arising under any policy or contract of title insurance to
14which it is a party. No new contract or policy of title
15insurance may be issued, nor may any existing policy or
16contract to title insurance be renewed by any registrant or
17certificate holder during any period of suspension or
18revocation of a registration or certificate.
19    (h) The Secretary may issue a cease and desist order to a
20title insurance company, agent, or other entity doing business
21without the required license or registration, when in the
22opinion of the Secretary, the company, agent, or other entity
23is violating or is about to violate any provision of this Act
24or any law or of any rule or condition imposed in writing by
25the Department.
26    The Secretary may issue the cease and desist order without

 

 

HB3064- 50 -LRB102 14548 BMS 19901 b

1notice and before a hearing.
2    The Secretary shall have the authority to prescribe rules
3for the administration of this Section.
4    If it is determined that the Secretary had the authority
5to issue the cease and desist order, he may issue such orders
6as may be reasonably necessary to correct, eliminate or remedy
7such conduct.
8    Any person or company subject to an order pursuant to this
9Section is entitled to judicial review of the order in
10accordance with the provisions of the Administrative Review
11Law.
12    The powers vested in the Secretary by this Section are
13additional to any and all other powers and remedies vested in
14the Secretary by law, and nothing in this Section shall be
15construed as requiring that the Secretary shall employ the
16powers conferred in this Section instead of or as a condition
17precedent to the exercise of any other power or remedy vested
18in the Secretary.
19(Source: P.A. 98-398, eff. 1-1-14.)
 
20    (215 ILCS 155/23)  (from Ch. 73, par. 1423)
21    Sec. 23. Violation; penalties; actual damages; injunctive
22relief.
23    (a) Any violation of any of the provisions of this Act and,
24beginning January 1, 2013, any violation of any of the
25provisions of Article 3 of the Residential Real Property

 

 

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1Disclosure Act shall constitute a business offense and shall
2subject the party violating the same to a penalty of $1000 for
3each offense.
4    (b) A violation of paragraphs (5.1) through (5.24) of
5subsection (a) of Section 21 is a Class A misdemeanor.
6    (c) A person who violates the prohibitions or limitations
7of subsection (a) of Section 21 shall be liable to the person
8or persons charged for the settlement service involved in the
9violation for actual damages.
10    (d) A title insurance company, a title insurance agent, or
11an independent escrowee who violates the prohibitions or
12limitations of subsection (a) of Section 21 shall be subject
13to injunctive relief. If a permanent injunction is granted,
14the court may award actual damages. Reasonable attorney's fees
15and costs may be awarded to the prevailing party.
16    (e) (b) Nothing contained in this Section shall affect the
17right of the Secretary to revoke or suspend a title insurance
18company's, title insurance agent's, or independent escrowee's
19certificate of authority or a title insurance agent's
20registration under any other Section of this Act.
21(Source: P.A. 97-891, eff. 8-3-12.)
 
22    (215 ILCS 155/19 rep.)
23    (215 ILCS 155/24 rep.)
24    (215 ILCS 155/25 rep.)
25    Section 10. The Title Insurance Act is amended by

 

 

HB3064- 52 -LRB102 14548 BMS 19901 b

1repealing Sections 19, 24, and 25.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law, except that Section 18.2 of the Title Insurance
4Act takes effect September 1, 2022.