Full Text of SB2239 93rd General Assembly
SB2239ham002 93RD GENERAL ASSEMBLY
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Rep. Daniel J. Burke
Filed: 5/27/2004
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| AMENDMENT TO SENATE BILL 2239
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| AMENDMENT NO. ______. Amend Senate Bill 2239 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Title Insurance Act is amended by changing | 5 |
| Sections 2, 3, 4, 5, 6, 9, 10, 11, 12, 13, 14, 16, 17, 18, 21, | 6 |
| and 23, and by adding Sections 4.1, 21.1, 21.2, and 21.3 as | 7 |
| follows:
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| (215 ILCS 155/2) (from Ch. 73, par. 1402)
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| Sec. 2. Application of Act.
Any corporation which has been | 10 |
| or shall be
incorporated or qualified to do business under the
| 11 |
| Business Corporation Act of 1983, as now or hereafter amended, | 12 |
| or any
predecessor law for the purpose, in whole or part, of | 13 |
| doing the business of title insurance
guaranteeing or
insuring | 14 |
| titles to real estate , may transact such business during the | 15 |
| time
for which it may be incorporated or qualified to do | 16 |
| business
in this State, subject to the requirements of this | 17 |
| Act.
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| (Source: P.A. 86-239.)
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| (215 ILCS 155/3) (from Ch. 73, par. 1403)
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| Sec. 3. Definitions.
As used in this Act, the words and | 21 |
| phrases following shall
have the following meanings unless the | 22 |
| context requires otherwise:
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| (1) "Title insurance business" or "business of title |
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| insurance" means:
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| (A) Issuing as insurer or offering to issue as insurer | 3 |
| title insurance;
and
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| (B) Transacting or proposing to transact one or more of | 5 |
| the following
activities when
conducted or performed in | 6 |
| contemplation of or in conjunction with the issuance
of | 7 |
| title insurance;
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| (i) soliciting or negotiating the issuance of | 9 |
| title insurance;
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| (ii) guaranteeing, warranting, or otherwise | 11 |
| insuring the correctness of
title
searches for all | 12 |
| instruments affecting titles to real property, any | 13 |
| interest in
real property, cooperative units and | 14 |
| proprietary leases, and for all liens or
charges | 15 |
| affecting the same;
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| (iii) handling of escrows, settlements, or | 17 |
| closings;
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| (iv) executing title insurance policies;
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| (v) effecting contracts of reinsurance;
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| (vi) abstracting, searching, or examining titles; | 21 |
| or
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| (vii) issuing insured closing letters or closing | 23 |
| protection letters;
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| (C) Guaranteeing, warranting, or insuring searches or | 25 |
| examinations of
title to real property or any interest in | 26 |
| real property, with the exception of
preparing an | 27 |
| attorney's opinion of title; or
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| (D) Guaranteeing or warranting the status of title as | 29 |
| to ownership of or
liens on real property and personal | 30 |
| property by any person other than the
principals to the | 31 |
| transaction; or
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| (E) Doing or proposing to do any business substantially | 33 |
| equivalent to any
of the activities listed in this | 34 |
| subsection,
provided that the preparation of an attorney's |
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| opinion
of title pursuant to paragraph (1)(C) is not | 2 |
| intended to be within the
definition of "title insurance | 3 |
| business" or "business of title insurance".
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| (1.5) "Title insurance" means insuring, guaranteeing, | 5 |
| warranting, or
indemnifying owners of real or personal property | 6 |
| or the holders of liens or
encumbrances thereon or others | 7 |
| interested therein against loss or damage
suffered by reason of | 8 |
| liens, encumbrances upon, defects in, or the
unmarketability of | 9 |
| the title to the property; the invalidity or
unenforceability | 10 |
| of any liens or encumbrances thereon; or doing any business in
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| substance equivalent to any of the foregoing.
"Warranting" for | 12 |
| purpose of this provision shall not
include any warranty | 13 |
| contained in instruments of encumbrance or conveyance.
An | 14 |
| attorney's opinion of title pursuant to paragraph (1)(C) is not | 15 |
| intended to
be within the definition of "title insurance".
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| (2) "Title insurance company" means any domestic company | 17 |
| organized under
the laws of this State for the purpose of | 18 |
| conducting the business of
title insurance
guaranteeing or | 19 |
| insuring titles to real estate and any title insurance
company | 20 |
| organized under the laws of another State, the District of | 21 |
| Columbia
or foreign government and authorized to transact the | 22 |
| business of
title insurance
guaranteeing or insuring titles to | 23 |
| real estate in this State.
| 24 |
| (3) "Title insurance agent" means a person, firm, | 25 |
| partnership,
association, corporation or other legal entity | 26 |
| registered by a title
insurance company and authorized by such | 27 |
| company to determine insurability
of title in accordance with | 28 |
| generally acceptable underwriting rules and
standards in | 29 |
| reliance on either the public records or a search package
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| prepared from a title plant, or both, and authorized in | 31 |
| addition to do any
of the following: act as an escrow agent, | 32 |
| solicit title insurance, collect
premiums, issue title | 33 |
| reports, binders or commitments to insure and
policies in its | 34 |
| behalf, provided, however, the term "title insurance agent"
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| shall not include officers and salaried employees of any title | 2 |
| insurance
company.
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| (4) "Producer of title business" is any person, firm, | 4 |
| partnership,
association, corporation or other legal entity | 5 |
| engaged in this State in the
trade, business, occupation or | 6 |
| profession of (i) buying or selling
interests in real property, | 7 |
| (ii) making loans secured by interests in real
property, or | 8 |
| (iii) acting as broker, agent, attorney, or representative of
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| natural persons or other legal entities that buy or sell | 10 |
| interests in real
property or that lend money with such | 11 |
| interests as security.
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| (5) "Associate" is any firm, association, partnership, | 13 |
| corporation or
other legal entity organized for profit in which | 14 |
| a producer of title
business is a director, officer, or partner | 15 |
| thereof, or owner of a
financial interest, as defined herein, | 16 |
| in such entity; any legal entity
that controls, is controlled | 17 |
| by, or is under common control with a producer
of title | 18 |
| business; and any natural person or legal entity with whom a
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| producer of title business has any agreement, arrangement, or | 20 |
| understanding
or pursues any course of conduct the purpose of | 21 |
| which is to evade the
provisions of this Act.
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| (6) "Financial interest" is any ownership interest, legal | 23 |
| or beneficial,
except ownership of publicly traded stock.
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| (7) "Refer" means to place or cause to be placed, or to | 25 |
| exercise any
power or influence over the placing of title | 26 |
| business, whether or not the
consent or approval of any other | 27 |
| person is sought or obtained with respect
to the referral.
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| (8) "Escrow Agent" means any title insurance company or any | 29 |
| title
insurance agent , including independent contractors of | 30 |
| either, acting on behalf of a title insurance company which
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| receives deposits, in trust, of funds or documents, or both, | 32 |
| for the purpose
of effecting the sale, transfer, encumbrance or | 33 |
| lease of real property to
be held by such escrow agent until | 34 |
| title to the real property that is the
subject of the escrow is |
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| in a prescribed condition. An escrow agent conducting closings | 2 |
| is subject to the provisions of subsection (e) of Section 16.
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| (9) "Independent Escrowee" means any firm, person, | 4 |
| partnership,
association, corporation or other
legal entity, | 5 |
| other than a title insurance company or a title insurance
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| agent, which receives deposits, in trust, of funds or | 7 |
| documents, or both, for
the purpose of effecting the sale, | 8 |
| transfer, encumbrance or lease of real
property to be held by | 9 |
| such escrowee until title to the real property that
is the | 10 |
| subject of the escrow is in a prescribed condition. Federal and
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| State chartered banks, savings and loan associations, credit | 12 |
| unions,
mortgage bankers, banks or trust companies authorized | 13 |
| to do business under
the Illinois Corporate Fiduciary Act, | 14 |
| licensees under the Consumer
Installment Loan Act, real estate | 15 |
| brokers licensed pursuant to the Real
Estate License Act of | 16 |
| 2000, as such Acts are now or hereafter amended, when acting | 17 |
| pursuant to a listing or sale agreement, and
licensed attorneys | 18 |
| when engaged in the attorney-client relationship are
exempt | 19 |
| from the escrow provisions of this Act. "Independent escrowee" | 20 |
| does not include employees or independent contractors of a | 21 |
| title insurance company or title insurance agent authorized by | 22 |
| such to perform closing, escrow, or settlement services.
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| (10) "Single risk" means the insured amount of any title | 24 |
| insurance
policy, except that where 2 or more title insurance | 25 |
| policies are issued
simultaneously covering different estates | 26 |
| in the same real property, "single
risk" means the sum of the | 27 |
| insured amounts of all such title insurance
policies. Any title | 28 |
| insurance policy insuring a mortgage interest, a claim
payment | 29 |
| under which reduces the insured amount of a fee or leasehold | 30 |
| title
insurance policy, shall be excluded in computing the | 31 |
| amount of a single
risk to the extent that the insured amount | 32 |
| of the mortgage title insurance
policy does not exceed the | 33 |
| insured amount of the fee or leasehold title
insurance policy.
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| (11) "Department" means the Department of Financial |
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| Institutions.
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| (12) "Director" means the Director of Financial | 3 |
| Institutions.
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| (13) "Insured closing letter" or "closing protection | 5 |
| letter" means
an indemnification or undertaking to a party to a | 6 |
| real estate transaction, from
a principal such as a title | 7 |
| insurance company or similar entity, setting forth
in writing | 8 |
| the extent of the principal's responsibility for intentional
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| misconduct or errors in closing the real estate transaction on | 10 |
| the part of a
settlement agent, such as a title insurance agent | 11 |
| or other settlement service
provider.
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| (14) "Monoline insurance" means title insurance that is a | 13 |
| single line of insurance. Because of the unique risks assumed, | 14 |
| a title insurance company must maintain its reserves for losses | 15 |
| independent of any other form of insurance and therefore may | 16 |
| not issue other lines of insurance.
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| (Source: P.A. 91-159, eff. 1-1-00; 91-245, eff. 12-31-99; | 18 |
| 92-16, eff.
6-28-01.)
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| (215 ILCS 155/4) (from Ch. 73, par. 1404)
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| Sec. 4. Deposits.
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| (a) Before doing business in the State of Illinois, a
Every
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| title insurance company must file with and have approved by the | 23 |
| Director cash or
licensed or qualified to do
business in this | 24 |
| State shall, within 30 days after the effective date of
this | 25 |
| Act or within 30 days after incorporated or licensed to do | 26 |
| business,
whichever is later, deposit with the Department, for | 27 |
| the benefit of the
creditors of the company by reason of any | 28 |
| policy issued by it, bonds of the
United States, this State , or | 29 |
| any body politic of this State in amounts as
specified in | 30 |
| subsection (b). The deposit is not to be otherwise pledged or | 31 |
| subject to distribution among creditors or stockholders until | 32 |
| all claims of escrow depositors, claims of policyholders, and | 33 |
| claims under reinsurance contracts have been paid in full and |
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| all liability on the escrow accounts, policies, or reinsurance | 2 |
| contracts have been paid in full or discharged, reinsured, or | 3 |
| otherwise assumed by a title insurance company authorized to do | 4 |
| business under this Act. The cash, bonds , and securities so | 5 |
| deposited may be
exchanged for other such securities. No such | 6 |
| cash, bond , or security shall be
sold or transferred by the | 7 |
| Director except on order of the circuit court or
as provided in | 8 |
| subsection (d). As long as the company depositing such
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| securities remains solvent, the company shall be permitted to | 10 |
| receive from
the Director the interest on such deposit.
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| (b) The deposit must have a then current value of | 12 |
| $1,000,000. All deposits shall be held for the benefit of any | 13 |
| insured under a policy it issued or named party to a written | 14 |
| escrow it accepted. The deposit is not to be otherwise pledged | 15 |
| or subject to distribution among creditors or stockholders.
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| Every title insurance company shall deposit bonds or securities | 17 |
| in
the sum of $50,000 plus $5,000 for each county, more than | 18 |
| one, in which
the real estate, upon which such policies are | 19 |
| issued, is located, to
maximum deposit of $500,000. Every title | 20 |
| insurance company guaranteeing or
insuring titles to real | 21 |
| estate in counties having 500,000 or more
inhabitants shall | 22 |
| deposit securities with the Department in the sum
of $500,000. | 23 |
| Any title insurance company having deposited $500,000 in
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| securities with the Department shall be entitled to guarantee | 25 |
| or insure
titles in any or all counties of the State.
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| (c) The Director may provide for custody of the deposits
| 27 |
| such securities by any trust
company or bank located in this | 28 |
| State and qualified to do business under
the Corporate | 29 |
| Fiduciary Act, as now or hereafter amended. The
compensation, | 30 |
| if any, of such custodian shall be paid by the depositing
| 31 |
| company. When the required deposits have
deposit has been made | 32 |
| by a title insurance
company, the Director shall certify that | 33 |
| the company
it has complied with the
provisions of this Section | 34 |
| and is authorized to transact the business of
insuring and |
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| guaranteeing titles to real estate.
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| (d) If , at any time, a title insurance company causes
shall | 3 |
| at any time cause all of its
unexpired policies , escrow | 4 |
| deposits, and reinsurance obligations in Illinois to be paid in | 5 |
| full , cancelled , discharged,
or reinsured , or otherwise
and all | 6 |
| of its
liabilities under such policies thereby to be | 7 |
| extinguished, or to be
assumed by another title insurance
some | 8 |
| surety or other responsible company authorized to do
business | 9 |
| under this Act
in this State , the Director shall, upon
on
| 10 |
| application of the
such company,
verified by the oath of its | 11 |
| president or secretary and on being satisfied
by an examination | 12 |
| of its books and its officers under oath that all of its
| 13 |
| policies are so paid in full , cancelled, discharged,
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| extinguished or reinsured, or otherwise assumed, authorize the | 15 |
| release of any bond or deposit posted under this Section
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| deliver up to
it such securities .
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| (e) The Director may revoke the certificate of authority of | 18 |
| a company that fails to maintain the deposit required by this | 19 |
| Section. The Director shall give notice of that revocation to | 20 |
| the company as provided by this Act and, during the time of the | 21 |
| revocation, the company may not conduct a title insurance | 22 |
| business. A company may complete contractual obligations, such | 23 |
| as issuing a policy where the obligations have already been | 24 |
| assumed. However, it may not solicit new business, complete new | 25 |
| searches or examinations, or close transactions. A revocation | 26 |
| shall not be set aside until a good and sufficient deposit has | 27 |
| been filed with the Director and the company is otherwise in | 28 |
| compliance with this Act.
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| (Source: P.A. 86-239.)
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| (215 ILCS 155/4.1 new) | 31 |
| Sec. 4.1. Minimum capital and surplus. Before doing | 32 |
| business in the State of Illinois, a title insurance company | 33 |
| must prove to the satisfaction of the Director that it has a |
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| minimum capital and surplus of $2,000,000. The Director may | 2 |
| prescribe the forms and standards for this purpose by rule.
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| (215 ILCS 155/5) (from Ch. 73, par. 1405)
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| Sec. 5. Certificate of authority required.
It is unlawful
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| shall not be lawful for any company
to engage or to continue in | 6 |
| the business of title insurance
guaranteeing or insuring titles
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| to real estate, without first procuring from the Director a | 8 |
| certificate of
authority stating that the
such a company has | 9 |
| complied with the requirements of
Section 4 of this Act. An | 10 |
| insurer that transacts any class of insurance other than title | 11 |
| insurance anywhere in the United States is not eligible for the | 12 |
| issuance of a certificate of authority to transact title | 13 |
| insurance in this State or for renewal of such a certificate of | 14 |
| authority.
If any company shall fail to maintain a deposit as
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| required by this Act, the Director may revoke the certificate | 16 |
| of authority
granted on behalf of such company. The Director | 17 |
| shall mail a copy of that
revocation to the company and during | 18 |
| the time of such revocation the
company shall not conduct such | 19 |
| business. A revocation shall not be set
aside until a good and | 20 |
| sufficient deposit shall have been made with the
Department, | 21 |
| fulfilling all the requirements of this Act.
| 22 |
| (Source: P.A. 86-239.)
| 23 |
| (215 ILCS 155/6) (from Ch. 73, par. 1406)
| 24 |
| Sec. 6. Reinsurance.
| 25 |
| (a) A title insurance company may obtain reinsurance for | 26 |
| all or
any part of its liability under one or more of its title | 27 |
| insurance policies
or reinsurance agreements and may also | 28 |
| reinsure title insurance policies
issued by other title | 29 |
| insurance companies on risks located in this State
or | 30 |
| elsewhere.
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| (b) A title insurance company licensed to do business in | 32 |
| this State shall retain at least $25,000 of primary liability |
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| for policies it issues for the first 5 years after the date of | 2 |
| the policy, unless a lesser sum is authorized by the Director. | 3 |
| A lesser sum may be retained at the request of the insured.
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| (Source: P.A. 86-239.)
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| (215 ILCS 155/9) (from Ch. 73, par. 1409)
| 6 |
| Sec. 9. Impairment of capital; discontinuance of issuance | 7 |
| of new policies; penalty.
| 8 |
| (a) Whenever the capital of a
any title insurance company
| 9 |
| authorized to do business under this Act is
shall be determined | 10 |
| by the circuit
court, upon the application of the Director, to | 11 |
| be
have become impaired
to the extent of 25% of the capital
| 12 |
| same , or to have otherwise become unsafe, it
shall be the duty | 13 |
| of the Director may
to cancel the authority of the
such company
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| to do business.
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| (b) The Director shall give notice as provided by this Act
| 16 |
| to the
such company to
discontinue doing business
issuing new | 17 |
| policies until its
such capital has been made
good.
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| (c) Any officer or management employee who continues to | 19 |
| take orders for title insurance or close transactions
issues a | 20 |
| new policy of title insurance on behalf of
a
such company after | 21 |
| a
such notice to discontinue business , and before its
until | 22 |
| such
capital has been made good, may
shall , for each offense, | 23 |
| be fined as provided by this Act
forfeit a sum
not exceeding | 24 |
| $1,000 .
| 25 |
| (Source: P.A. 86-239.)
| 26 |
| (215 ILCS 155/10) (from Ch. 73, par. 1410)
| 27 |
| Sec. 10. Reserves.
| 28 |
| (a) All title insurance companies authorized to do business
| 29 |
| under this Act shall establish and maintain reserves against | 30 |
| unpaid losses
and loss expenses. Upon receiving notice from or | 31 |
| on behalf of the insured
of a title defect, lien or adverse | 32 |
| claim against the title of the
insured that may result in a |
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| loss or cause expense to be incurred in the
proper disposition | 2 |
| of the claim, the title insurance company shall
determine the | 3 |
| amount to be added to the reserve, which amount shall reflect
a | 4 |
| careful estimate of the loss or loss expense likely to result | 5 |
| by reason
of the claim. Reserves required under this Section | 6 |
| may be revised from
time to time and shall be redetermined at | 7 |
| least once each year.
| 8 |
| (b) Title insurance is a monoline insurance and the | 9 |
| reserves for losses may not be pledged or utilized for any | 10 |
| other form of insurance.
| 11 |
| (Source: P.A. 86-239.)
| 12 |
| (215 ILCS 155/11) (from Ch. 73, par. 1411)
| 13 |
| Sec. 11. Statutory premium reserve.
| 14 |
| (a) A domestic title insurance company shall establish and
| 15 |
| maintain a statutory premium reserve computed in accordance | 16 |
| with this
Section. The reserve shall be reported as a liability | 17 |
| of the title
insurance company in its financial statements. The | 18 |
| statutory premium
reserve shall be maintained by the title | 19 |
| insurance company for the
protection of holders of title | 20 |
| insurance policies. Except as provided in
this Section, assets | 21 |
| equal in value to the statutory premium reserve are
not subject | 22 |
| to distribution among creditors or stockholders of the title
| 23 |
| insurance company until all claims of policyholders or claims | 24 |
| under
reinsurance contracts have been paid in full , and all | 25 |
| liability on the
policies or reinsurance contracts has been | 26 |
| paid in full and discharged ,
or
lawfully reinsured , or | 27 |
| otherwise assumed by another title insurance company | 28 |
| authorized to do business under this Act .
| 29 |
| (b) A foreign or alien title insurance company authorized | 30 |
| to do business
under this Act shall maintain at least the same | 31 |
| reserves on title insurance
policies issued on properties | 32 |
| located in this State as are required of
domestic title | 33 |
| insurance companies.
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| (c) The statutory premium reserve shall consist of:
| 2 |
| (1) the amount of the statutory premium reserve on | 3 |
| January 1, 1990; and
| 4 |
| (2) a sum equal to 12 1/2 cents for each $1,000 of net | 5 |
| retained liability
under each title insurance policy on a | 6 |
| single risk written on properties
located in this State | 7 |
| after January 1, 1990.
| 8 |
| (d) Amounts placed in the statutory premium reserve in any | 9 |
| year in
accordance with this Section shall be deducted in | 10 |
| determining the net
profit of the title insurance company for | 11 |
| that year.
| 12 |
| (e) A title insurance company shall release from the | 13 |
| statutory premium
reserve a sum equal to 10% of the amount | 14 |
| added to the reserve during
a calendar year on July 1 of each | 15 |
| of the 5 years following the year in
which the sum was added, | 16 |
| and shall release from the statutory premium
reserve a sum | 17 |
| equal to 3 1/3% of the amount added to the reserve during
that | 18 |
| year on each succeeding July 1 until the entire amount for that | 19 |
| year
has been released. The amount of the statutory premium | 20 |
| reserve or similar
premium reserve maintained before January 1, | 21 |
| 1990,
shall be released in accordance with the law in effect | 22 |
| before January 1,
1990.
| 23 |
| (f) This reserve is not subject to the requirements of | 24 |
| Section 4.
| 25 |
| (Source: P.A. 86-239; 87-1151.)
| 26 |
| (215 ILCS 155/12) (from Ch. 73, par. 1412)
| 27 |
| Sec. 12. Examination; compliance.
| 28 |
| (a) The Director or his authorized representative shall | 29 |
| have
the power and authority, and it shall be his duty, to | 30 |
| cause to be visited
and examined annually any title insurance | 31 |
| company doing business under this
Act, and to verify and compel | 32 |
| a compliance with the provisions of law governing it as
he may | 33 |
| by law exercise in relation to trust companies .
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| (b) The Director or his authorized agent shall have power | 2 |
| and authority to
compel compliance with the provisions of this | 3 |
| Act and shall, only upon the
showing of good cause, require any | 4 |
| title insurance company to make reasonable efforts to obtain | 5 |
| the
appropriate records of its registered agents and make them | 6 |
| available for
examination
audit at a time and place designated | 7 |
| by the Director. Expenses incurred in
the course of such | 8 |
| examinations
audits will be the responsibility of the title | 9 |
| insurance
company. In the event that a present or former | 10 |
| registered agent or its successor refuses or is unable to | 11 |
| cooperate with a title insurance company in furnishing the | 12 |
| records requested by the Director or his authorized agent, then | 13 |
| the Director or his authorized agent shall have the power and | 14 |
| authority to obtain those records directly.
| 15 |
| (Source: P.A. 86-239.)
| 16 |
| (215 ILCS 155/13) (from Ch. 73, par. 1413)
| 17 |
| Sec. 13. Annual statement.
| 18 |
| (a) A
Each title insurance company shall file with the | 19 |
| Department
during the month of March of each year, a statement | 20 |
| under oath, of the
condition of such company on the | 21 |
| thirty-first day of December next
preceding disclosing the | 22 |
| assets, liabilities, earnings and expenses of the
company. The | 23 |
| report shall be in such form and shall contain such additional
| 24 |
| statements and information as to the affairs, business, and | 25 |
| conditions of
the company as the Director may from time to time | 26 |
| prescribe or require.
| 27 |
| (b) By June 1 of each year, a title insurance company must | 28 |
| file with the Department a copy of its most recent audited | 29 |
| financial statements.
| 30 |
| (Source: P.A. 86-239.)
| 31 |
| (215 ILCS 155/14) (from Ch. 73, par. 1414)
| 32 |
| Sec. 14. Fees.
|
|
|
|
09300SB2239ham002 |
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|
| 1 |
| (a) A
Every title insurance company and an
every
| 2 |
| independent
escrowee subject to this Act shall pay the | 3 |
| following fees:
| 4 |
| (1) for filing the original application for a | 5 |
| certificate of authority
and receiving the deposit | 6 |
| required under this Act, $500;
| 7 |
| (2) for the certificate of authority, $10;
| 8 |
| (3) for every copy of a paper filed in the Department | 9 |
| under this Act,
$1 per folio;
| 10 |
| (4) for affixing the seal of the Department and | 11 |
| certifying a copy, $2;
| 12 |
| (5) for filing the annual statement, $50 ; and
.
| 13 |
| (6) for each examination $500 per examiner per day or | 14 |
| part of a day and actual travel costs incurred.
| 15 |
| (b)
Each title insurance company shall pay, for all of its | 16 |
| title
insurance agents subject to this Act for filing an annual | 17 |
| registration of
its agents, an amount equal to $3 for each | 18 |
| policy issued by
all
of its
agents
in the immediately preceding | 19 |
| calendar year.
| 20 |
| (Source: P.A. 93-32, eff. 7-1-03.)
| 21 |
| (215 ILCS 155/16) (from Ch. 73, par. 1416)
| 22 |
| Sec. 16. Title insurance agents.
| 23 |
| (a) No person, firm, partnership, association, corporation | 24 |
| or other
legal entity shall act as or hold itself out to be a | 25 |
| title insurance agent
unless duly registered by a title | 26 |
| insurance company with the Director.
| 27 |
| (b) Each application for registration shall be made on a | 28 |
| form specified
by the Director and prepared in duplicate by | 29 |
| each title insurance company
which the agent represents. The | 30 |
| title insurance company shall retain the
copy of the | 31 |
| application and forward the original to the Director with the
| 32 |
| appropriate fee.
| 33 |
| (c) Every applicant for registration, except a firm, |
|
|
|
09300SB2239ham002 |
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| 1 |
| partnership,
association or corporation, must be 18 years or | 2 |
| more of age.
| 3 |
| (d) Registration shall be made annually by a filing with | 4 |
| the Director;
supplemental registrations for new title | 5 |
| insurance agents to be added
between annual filings shall be | 6 |
| made from time to time in the manner
provided by the Director;
| 7 |
| registrations shall remain in effect unless
revoked or | 8 |
| suspended by the Director or are voluntarily withdrawn by the
| 9 |
| registrant or the title insurance company.
| 10 |
| (e) Funds deposited in connection with any escrows, | 11 |
| settlements, or closings shall be deposited in a separate | 12 |
| fiduciary trust account or accounts in a bank or other | 13 |
| financial institution insured by an agency of the federal | 14 |
| government unless the instructions provide otherwise. Such | 15 |
| funds shall be the property of the person or persons entitled | 16 |
| thereto under the provisions of the escrow, settlement, or | 17 |
| closing and shall be segregated by escrow, settlement, or | 18 |
| closing in the records of the escrow agent. Such funds shall | 19 |
| not be subject to any debts of the escrowee and shall be used | 20 |
| only in accordance with the terms of the individual escrow, | 21 |
| settlement, or closing under which the funds were accepted. | 22 |
| Interest received on funds deposited with the escrow agent | 23 |
| in connection with any escrow, settlement, or closing shall be | 24 |
| paid to the depositing party unless the instructions provide | 25 |
| otherwise. | 26 |
| The escrow agent shall maintain separate records of all | 27 |
| receipts and disbursements of escrow, settlement, or closing | 28 |
| funds. | 29 |
| The escrow agent shall comply with any rules adopted by the | 30 |
| Director pertaining to escrow, settlement, or closing | 31 |
| transactions.
| 32 |
| (f) A title insurance agent, not qualified as an | 33 |
| independent escrowee, may act in the capacity of an escrow | 34 |
| agent when it is supplying an abstract of title, grantor |
|
|
|
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| grantee search, tract search, lien search, tax assessment | 2 |
| search, or other limited purpose search to the parties to the | 3 |
| transaction, even if it is not issuing a title insurance | 4 |
| commitment or title insurance policy. A title insurance agent | 5 |
| may act as an escrow agent only when specifically authorized in | 6 |
| writing on forms prescribed by the Director by a title | 7 |
| insurance company that has duly registered the agent with the | 8 |
| Director and only when notice of the authorization is provided | 9 |
| to and receipt thereof is acknowledged by the Director. The | 10 |
| authority granted to a title insurance agent may be limited or | 11 |
| revoked at any time by the title insurance company. | 12 |
| Where a title insurance agent has been authorized by more | 13 |
| than one title insurance company to act under this subsection, | 14 |
| and where that title insurance agent is unable to pay a claim | 15 |
| or loss arising from such business, then the balance of | 16 |
| liability and expense shall become the shared liability of each | 17 |
| such title insurance company in the proportion of title | 18 |
| insurance premiums reported by the title insurance agent for | 19 |
| each of them in the 12 months prior to the act or omission | 20 |
| causing the liability.
| 21 |
| (Source: P.A. 86-239.)
| 22 |
| (215 ILCS 155/17) (from Ch. 73, par. 1417)
| 23 |
| Sec. 17. Independent escrowees.
| 24 |
| (a) An
Every independent escrowee shall be subject to the | 25 |
| same
certification and deposit requirements to which title | 26 |
| insurance companies
are subject under Section 4 of this Act.
| 27 |
| (b) No person, firm, corporation or other legal entity | 28 |
| shall hold itself
out to be an independent escrowee unless it | 29 |
| has been issued a certificate
of authority by the Director.
| 30 |
| (c) Every applicant for a certificate of authority, except | 31 |
| a firm,
partnership, association or corporation, must be 18 | 32 |
| years or more of age.
| 33 |
| (d) Every certificate of authority shall remain in effect |
|
|
|
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| 1 |
| one year
unless revoked or suspended by the Director or | 2 |
| voluntarily surrendered
by the holder.
| 3 |
| (e) An independent escrowee may engage in the escrow, | 4 |
| settlement, or closing
business, or any combination of such | 5 |
| business, and operate as an escrow,
settlement, or closing | 6 |
| agent, provided that:
| 7 |
| (1) Funds deposited in connection with any escrow, | 8 |
| settlement, or
closing shall be deposited in a separate | 9 |
| fiduciary trust account or
accounts in a bank or other | 10 |
| financial institution insured by an agency of
the federal | 11 |
| government unless the instructions provide otherwise. Such
| 12 |
| funds shall be the property of the person or persons | 13 |
| entitled thereto under
the provisions of the escrow, | 14 |
| settlement, or closing and shall be
segregated by escrow, | 15 |
| settlement or closing in the records of the
independent | 16 |
| escrowee. Such funds shall not be subject to any debts of | 17 |
| the
escrowee and shall be used only in accordance with the | 18 |
| terms of the
individual escrow, settlement or closing under | 19 |
| which the funds were accepted.
| 20 |
| (2) Interest received on funds deposited with the | 21 |
| independent escrowee
in connection with any escrow, | 22 |
| settlement or closing shall be paid to the
depositing party | 23 |
| unless the instructions provide otherwise.
| 24 |
| (3) The independent escrowee shall maintain separate | 25 |
| records of all
receipt and disbursement of escrow, | 26 |
| settlement or closing funds.
| 27 |
| (4) The independent escrowee shall comply with any | 28 |
| rules or regulations
promulgated by the Director | 29 |
| pertaining to escrow, settlement or closing
transactions.
| 30 |
| (f) The Director or his authorized representative shall | 31 |
| have the power
and authority to visit and examine at any time | 32 |
| any independent escrowee
certified under this Act and to verify | 33 |
| and compel compliance with the provisions of
this Act.
| 34 |
| (g) A title insurance company or title
insurance agent, not |
|
|
|
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|
| 1 |
| qualified as an independent escrowee, may act in the
capacity | 2 |
| of an escrow agent when it is supplying an abstract of title,
| 3 |
| grantor-grantee search, tract search, lien search, tax | 4 |
| assessment search, or
other limited purpose search to the | 5 |
| parties to the transaction even if it is
not issuing a title | 6 |
| insurance commitment or title insurance policy. A title
| 7 |
| insurance agent may act as an escrow agent only when | 8 |
| specifically authorized in
writing on forms prescribed by the | 9 |
| Director by a title insurance company that
has duly registered | 10 |
| the agent with the Director and only when notice of the
| 11 |
| authorization is provided to and receipt thereof is | 12 |
| acknowledged by the
Director. The authority granted to a title | 13 |
| insurance agent may be limited or
revoked at any time by the | 14 |
| title insurance company.
| 15 |
| (Source: P.A. 91-159, eff. 1-1-00.)
| 16 |
| (215 ILCS 155/18) (from Ch. 73, par. 1418)
| 17 |
| Sec. 18. No referral payments; kickbacks.
(a) Application | 18 |
| of this Section is limited to residential
properties of 4 or | 19 |
| fewer units, at least one of which units is occupied or
to be | 20 |
| occupied by an owner, legal or beneficial.
| 21 |
| (b) No title insurance company, independent escrowee, or
| 22 |
| title insurance agent may issue a title insurance
policy to, or | 23 |
| provide services to an applicant if it knows or has reason
to | 24 |
| believe that the applicant was referred to it by any producer | 25 |
| of title
business or by any associate of such producer, where | 26 |
| the producer, the
associate, or both, have a financial interest | 27 |
| in the title insurance
company, independent escrowee, or title | 28 |
| insurance agent to which business
is referred unless the | 29 |
| producer has disclosed to any party paying for the
products or | 30 |
| services, or his representative, the financial interest of the
| 31 |
| producer of title business or associate referring the title | 32 |
| business and a
disclosure of an estimate of those charges to be | 33 |
| paid as described in
Section 19. Such disclosure must be made |
|
|
|
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| 1 |
| in writing on forms prescribed by
the Director prior to the | 2 |
| time that the commitment for title insurance is
issued. The | 3 |
| title insurance company, independent escrowee, or title
| 4 |
| insurance agent shall maintain the disclosure forms for a | 5 |
| period of 3 years.
| 6 |
| (c) A
Each title insurance company, independent escrowee, | 7 |
| and title
insurance agent shall file with the Director, on | 8 |
| forms prescribed by the
Director, reports setting forth the | 9 |
| names and addresses of those persons,
if any, who have had a | 10 |
| financial interest in the title insurance company,
independent | 11 |
| escrowee, or title insurance agent during the calendar year,
| 12 |
| who are known or reasonably believed by the title insurance | 13 |
| company,
independent escrowee, or title insurance agent to be | 14 |
| producers of title
business or associates of producers.
| 15 |
| (1) A
Each title insurance company and independent | 16 |
| escrowee shall file the
report required under this | 17 |
| subsection with its application for a
certificate of | 18 |
| authority and at any time there is a change in the
| 19 |
| information provided in the last report.
| 20 |
| (2) A
Each title insurance agent shall file the report | 21 |
| required under
this subsection with its title insurance | 22 |
| company for inclusion with its
application for | 23 |
| registration and at any time there is a change in the
| 24 |
| information provided in its last report.
| 25 |
| (3) A
Each title insurance company, independent | 26 |
| escrowee, or title
insurance agent doing business on the | 27 |
| effective date of this Act shall file
the report required | 28 |
| under this subsection within 90 days after such
effective | 29 |
| date.
| 30 |
| (Source: P.A. 86-239.)
| 31 |
| (215 ILCS 155/21) (from Ch. 73, par. 1421)
| 32 |
| Sec. 21. Regulatory action.
| 33 |
| (a) The Director may refuse to grant, and may suspend or
|
|
|
|
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|
| 1 |
| revoke, any certificate of authority, registration or license | 2 |
| issued
pursuant to this Act if he determines that the holder of | 3 |
| or applicant for
such certificate, registration or license:
| 4 |
| (1) has intentionally made a material misstatement or | 5 |
| fraudulent
misrepresentation in relation to a matter | 6 |
| covered by this Act;
| 7 |
| (2) has misappropriated or tortiously converted to its | 8 |
| own use, or
illegally withheld, monies held in a fiduciary | 9 |
| capacity;
| 10 |
| (3) has demonstrated untrustworthiness or incompetency | 11 |
| in transacting
the business of guaranteeing titles to real | 12 |
| estate in such a manner as to
endanger the public;
| 13 |
| (4) has materially misrepresented the terms or | 14 |
| conditions of contracts
or agreements to which it is a | 15 |
| party;
| 16 |
| (5) has paid any commissions, discounts or any part of | 17 |
| its premiums,
fees or other charges to any person in | 18 |
| violation of any State or federal
law or regulations or | 19 |
| opinion letters issued under the federal Real Estate
| 20 |
| Settlement Procedures Act of 1974; or
| 21 |
| (6) has failed to comply with the deposit and reserve | 22 |
| requirements of
this Act or any other requirements of this | 23 |
| Act.
| 24 |
| (b) In every case where a registration or certificate is | 25 |
| suspended or
revoked, or an application for a registration or | 26 |
| certificate or renewal
thereof is refused, the Director shall | 27 |
| serve notice of his action,
including a statement of the | 28 |
| reasons for his action, as provided by this Act. When a notice | 29 |
| of suspension or revocation of a certificate of authority is | 30 |
| given to a title insurance company, the Director shall also | 31 |
| notify all the registered agents of that title insurance | 32 |
| company of the Director's action.
either personally or
by | 33 |
| registered or certified mail. Service by mail shall be deemed | 34 |
| completed
if such notice is deposited in the post office, |
|
|
|
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| 1 |
| postage paid, addressed to
the last known address specified in | 2 |
| the application for the certificate or
registration of such | 3 |
| holder or registrant.
| 4 |
| (c) In the case of a refusal to issue or renew a | 5 |
| certificate or accept a
registration, the applicant or | 6 |
| registrant may request in writing, within 30
days after the | 7 |
| date of service, a hearing. In the case of a
refusal to renew, | 8 |
| the expiring registration or certificate shall be deemed
to | 9 |
| continue in force until 30 days after the service of the notice | 10 |
| of
refusal to renew, or if a hearing is requested during that | 11 |
| period, until a
final order is entered pursuant to such | 12 |
| hearing.
| 13 |
| (d) The suspension or revocation of a registration or | 14 |
| certificate shall
take effect upon service of notice thereof. | 15 |
| The holder of any such
suspended registration or certificate | 16 |
| may request in writing, within 30
days of such service, a | 17 |
| hearing.
| 18 |
| (e) In cases of suspension or revocation of registration | 19 |
| pursuant to
subsection (a), the Director may, in the public | 20 |
| interest, issue an order of
suspension or revocation which | 21 |
| shall take effect upon service of
notification thereof. Such | 22 |
| order shall become final 60 days from the date
of service | 23 |
| unless the registrant requests in writing, within such 60 days,
| 24 |
| a formal hearing thereon. In the event a hearing is requested, | 25 |
| the order
shall remain temporary until a final order is entered | 26 |
| pursuant to such hearing.
| 27 |
| (f) Hearing shall be held at such time and place as may be | 28 |
| designated by
the Director either in the City of Springfield, | 29 |
| the City of Chicago, or in
the county in which the principal | 30 |
| business office of the affected
registrant or certificate | 31 |
| holder is located.
| 32 |
| (g) The suspension or revocation of a registration or | 33 |
| certificate or the
refusal to issue or renew a registration or | 34 |
| certificate shall not in any
way limit or terminate the |
|
|
|
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|
| 1 |
| responsibilities of any registrant or
certificate holder | 2 |
| arising under any policy or contract of title insurance
to | 3 |
| which it is a party. No new contract or policy of title | 4 |
| insurance may
be issued, nor may any existing policy or | 5 |
| contract to title insurance be
renewed by any registrant or | 6 |
| certificate holder during any period of
suspension or | 7 |
| revocation of a registration or certificate.
| 8 |
| (h) The Director may issue a cease and desist order to a | 9 |
| title insurance
company, agent, or other entity doing business | 10 |
| without the required license or
registration, when in the | 11 |
| opinion of the Director, the company, agent, or other
entity is | 12 |
| violating or is about to violate any provision of this Act or | 13 |
| any
law or of
any
rule or condition imposed in writing by the | 14 |
| Department.
| 15 |
| The Director may issue the cease and desist order without | 16 |
| notice and before a
hearing.
| 17 |
| The Director shall have the authority to prescribe rules | 18 |
| for the
administration of this Section.
| 19 |
| If it is determined that the Director had the authority to | 20 |
| issue the cease
and desist order, he may issue such orders as | 21 |
| may be reasonably necessary to
correct, eliminate or remedy | 22 |
| such conduct.
| 23 |
| Any person or company subject to an order pursuant to this | 24 |
| Section is
entitled to judicial review of the order in | 25 |
| accordance with the provisions of
the Administrative Review | 26 |
| Law.
| 27 |
| The powers vested in the Director by this Section are | 28 |
| additional to any and
all other powers and remedies vested in | 29 |
| the Director by law, and nothing in
this Section shall be | 30 |
| construed as requiring that the Director shall employ the
| 31 |
| powers conferred in this Section instead of or as a condition | 32 |
| precedent to the
exercise of any other power or remedy vested | 33 |
| in the Director.
| 34 |
| (Source: P.A. 89-601, eff. 8-2-96.)
|
|
|
|
09300SB2239ham002 |
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|
| 1 |
| (215 ILCS 155/21.1 new) | 2 |
| Sec. 21.1. Receiver and involuntary liquidation.
| 3 |
| (a) The proceedings under this Section shall be the | 4 |
| exclusive remedy and the only proceedings commenced in any | 5 |
| court for the dissolution of, the winding up of the affairs of, | 6 |
| or the appointment of a receiver for a title insurance company. | 7 |
| (b) If the Director, with respect to a title insurance | 8 |
| company, finds that (1) its capital is impaired or it is | 9 |
| otherwise in an unsound condition, (2) its business is being | 10 |
| conducted in an unlawful, fraudulent, or unsafe manner, (3) it | 11 |
| is unable to continue operations, or (4) its examination has | 12 |
| been obstructed or impeded, the Director may give notice to the | 13 |
| board of directors of the title insurance company of his or her | 14 |
| findings. If the Director's findings are not corrected to his | 15 |
| or her satisfaction within 60 days after the company receives | 16 |
| the notice, the Director shall take possession and control of | 17 |
| the title insurance company, its assets, and assets held by it | 18 |
| for any person for the purpose of examination, reorganization, | 19 |
| or liquidation through receivership. | 20 |
| If, in addition to making a finding as provided in this | 21 |
| subsection (b), the Director is of the opinion and finds that | 22 |
| an emergency that may result in serious losses to any person | 23 |
| exists, the Director may, in his or her discretion, without | 24 |
| having given the notice provided for in this subsection, and | 25 |
| whether or not proceedings under subsection (a) of this Section | 26 |
| have been instituted or are then pending, take possession and | 27 |
| control of the title insurance company and its assets for the | 28 |
| purpose of examination, reorganization, or liquidation through | 29 |
| receivership. | 30 |
| (c) The Director may take possession and control of a title | 31 |
| insurance company, its assets, and assets held by it for any | 32 |
| person by posting upon the premises of each office located in | 33 |
| the State of Illinois at which it transacts its business as a |
|
|
|
09300SB2239ham002 |
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|
| 1 |
| title insurance company a notice reciting that the Director is | 2 |
| assuming possession pursuant to this Act and the time when the | 3 |
| possession shall be deemed to commence. | 4 |
| (d) Promptly after taking possession and control of a title | 5 |
| insurance company the Director, represented by the Attorney | 6 |
| General, shall file a copy of the notice posted upon the | 7 |
| premises in the Circuit Court of either Cook County or Sangamon | 8 |
| County, which cause shall be entered as a court action upon the | 9 |
| dockets of the court under the name and style of "In the matter | 10 |
| of the possession and control by the Director of the Department | 11 |
| of Financial Institutions of (insert the name of the title | 12 |
| insurance company)". If the Director determines (which | 13 |
| determination may be made at the time of, or at any time | 14 |
| subsequent to, taking possession and control of a title | 15 |
| insurance company) that no practical possibility exists to | 16 |
| reorganize the title insurance company after reasonable | 17 |
| efforts have been made, the Director, represented by the | 18 |
| Attorney General, shall also file a complaint, if it has not | 19 |
| already been done, for the appointment of a receiver or such | 20 |
| other proceeding as is appropriate under the circumstances. The | 21 |
| court where the cause is docketed shall be vested with the | 22 |
| exclusive jurisdiction to hear and determine all issues and | 23 |
| matters pertaining to or connected with the Director's | 24 |
| possession and control of the title insurance company as | 25 |
| provided in this Act and any further issues and matters | 26 |
| pertaining to or connected with the Director's possession and | 27 |
| control as may be submitted to the court for its adjudication. | 28 |
| The Director, upon taking possession and control of a title | 29 |
| insurance company, may, and if not previously done, shall | 30 |
| immediately upon filing a complaint for dissolution make an | 31 |
| examination of the affairs of the title insurance company or | 32 |
| appoint a suitable person to make the examination as the | 33 |
| Director's agent. The examination shall be conducted pursuant | 34 |
| to the authority granted under Section 12 of this Act. The |
|
|
|
09300SB2239ham002 |
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|
| 1 |
| person conducting the examination shall have and may exercise | 2 |
| on behalf of the Director all of the powers and authority | 3 |
| granted to the Director under Section 12. A copy of the report | 4 |
| shall be filed in any dissolution proceeding filed by the | 5 |
| Director. The reasonable fees and necessary expenses of the | 6 |
| examining person, as approved by the Director or as recommended | 7 |
| by the Director and approved by the court if a dissolution | 8 |
| proceeding has been filed, shall be borne by the subject title | 9 |
| insurance company and shall have the same priority for payment | 10 |
| as the reasonable and necessary expenses of the Director in | 11 |
| conducting an examination. The person appointed to make the | 12 |
| examination shall make a proper accounting, in the manner and | 13 |
| scope as determined by the Director to be practical and | 14 |
| advisable under the circumstances, on behalf of the title | 15 |
| insurance company and no guardian ad litem need be appointed to | 16 |
| review the accounting. | 17 |
| (e) The Director, upon taking possession and control of a | 18 |
| title insurance company and its assets, shall be vested with | 19 |
| the full powers of management and control, including, but not | 20 |
| limited to, the following: | 21 |
| (1) the power to continue or to discontinue the | 22 |
| business; | 23 |
| (2) the power to stop or to limit the payment of its | 24 |
| obligations; | 25 |
| (3) the power to collect and to use its assets and to | 26 |
| give valid receipts and acquittances therefor; | 27 |
| (4) the power to transfer title and liquidate any bond | 28 |
| or deposit made under Section 4 of this Act; | 29 |
| (5) the power to employ and to pay any necessary | 30 |
| assistants; | 31 |
| (6) the power to execute any instrument in the name of | 32 |
| the title insurance company; | 33 |
| (7) the power to commence, defend, and conduct in its | 34 |
| name any action or proceeding in which it may be a party; |
|
|
|
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| (8) the power, upon the order of the court, to sell and | 2 |
| convey its assets, in whole or in part, and to sell or | 3 |
| compound bad or doubtful debts upon such terms and | 4 |
| conditions as may be fixed in that order; | 5 |
| (9) the power, upon the order of the court, to make and | 6 |
| to carry out agreements with other title insurance | 7 |
| companies or financial institutions or with the United | 8 |
| States or any agency of the United States for the payment | 9 |
| or assumption of the title insurance company's | 10 |
| liabilities, in whole or in part, and to transfer assets | 11 |
| and to make guaranties, in whole or in part, in connection | 12 |
| therewith; | 13 |
| (10) the power, upon the order of the court, to borrow | 14 |
| money in the name of the title insurance company and to | 15 |
| pledge its assets as security for the loan; | 16 |
| (11) the power to terminate his or her possession and | 17 |
| control by restoring the title insurance company to its | 18 |
| board of directors; | 19 |
| (12) the power to appoint a receiver which may be the | 20 |
| Director of the Department of Financial Institutions, | 21 |
| another title insurance company, or another suitable | 22 |
| person and to order liquidation of the title insurance | 23 |
| company as provided in this Act; and | 24 |
| (13) the power, upon the order of the court and without | 25 |
| the appointment of a receiver, to determine that the title | 26 |
| insurance company has been closed for the purpose of | 27 |
| liquidation without adequate provision being made for | 28 |
| payment of its obligations, and thereupon the title | 29 |
| insurance company shall be deemed to have been closed on | 30 |
| account of inability to meet its obligations to its | 31 |
| insureds or escrow depositors. | 32 |
| (f) Upon taking possession, the Director shall make an | 33 |
| examination of the condition of the title insurance company and | 34 |
| an inventory of the assets and, unless the time shall be |
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| extended by order of the court or unless the Director shall | 2 |
| have otherwise settled the affairs of the title insurance | 3 |
| company pursuant to the provisions of this Act, within 90 days | 4 |
| after the time of taking possession and control of the title | 5 |
| insurance company, the Director shall either terminate his | 6 |
| possession and control by restoring the title insurance company | 7 |
| to its board of directors or appoint a receiver, which may be | 8 |
| the Director of the Department of Financial Institutions, | 9 |
| another title insurance company, or another suitable person and | 10 |
| order the liquidation of the title insurance company as | 11 |
| provided in this Act. All necessary and reasonable expenses of | 12 |
| the Director's possession and control shall be a priority claim | 13 |
| and shall be borne by the title insurance company and may be | 14 |
| paid by the Director from the title insurance company's own | 15 |
| assets as distinguished from assets held for any other person. | 16 |
| (g) If the Director takes possession and control of a title | 17 |
| insurance company and its assets, any period of limitation | 18 |
| fixed by a statute or agreement that would otherwise expire on | 19 |
| a claim or right of action of the title insurance company, on | 20 |
| its own behalf or on behalf of its insureds or escrow | 21 |
| depositors, or upon which an appeal must be taken or a pleading | 22 |
| or other document must be filed by the title insurance company | 23 |
| in any pending action or proceeding shall be tolled until 6 | 24 |
| months after the commencement of the possession, and no | 25 |
| judgment, lien, levy, attachment, or other similar legal | 26 |
| process must be enforced upon or satisfied, in whole or in | 27 |
| part, from any asset of the title insurance company or from any | 28 |
| asset of an insured or escrow depositor while it is in the | 29 |
| possession of the Director. | 30 |
| (h) If the Director appoints a receiver to take possession | 31 |
| and control of the assets of insureds or escrow depositors for | 32 |
| the purpose of holding those assets as fiduciary for the | 33 |
| benefit of the insureds or escrow depositors pending the | 34 |
| winding up of the affairs of the title insurance company being |
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| liquidated and the appointment of a successor escrowee for | 2 |
| those assets, any period of limitation fixed by statute, rule | 3 |
| of court, or agreement that would otherwise expire on a claim | 4 |
| or right of action in favor of or against the insureds or | 5 |
| escrow depositors of those assets or upon which an appeal must | 6 |
| be taken or a pleading or other document must be filed by a | 7 |
| title insurance company on behalf of an insured or escrow | 8 |
| depositor in any pending action or proceeding shall be tolled | 9 |
| for a period of 6 months after the appointment of a receiver, | 10 |
| and no judgment, lien, levy, attachment, or other similar legal | 11 |
| process shall be enforced upon or satisfied, in whole or in | 12 |
| part, from any asset of the insured or escrow depositor while | 13 |
| it is in the possession of the receiver. | 14 |
| (i) If the Director determines at any time that no | 15 |
| reasonable possibility exists for the title insurance company | 16 |
| to be operated by its board of directors in accordance with the | 17 |
| provisions of this Act after reasonable efforts have been made | 18 |
| and that it should be liquidated through receivership, he or | 19 |
| she shall appoint a receiver. The Director may require of the | 20 |
| receiver such bond and security as the Director deems proper. | 21 |
| The Director, represented by the Attorney General, shall file a | 22 |
| complaint for the dissolution or winding up of the affairs of | 23 |
| the title insurance company in a court of the county in which | 24 |
| the principal office of the title insurance company is located | 25 |
| and shall cause notice to be given in a newspaper of general | 26 |
| circulation once each week for 4 consecutive weeks so that | 27 |
| persons who may have claims against the title insurance company | 28 |
| may present them to the receiver and make legal proof thereof | 29 |
| and notifying those persons and all to whom it may concern of | 30 |
| the filing of a complaint for the dissolution or winding up of | 31 |
| the affairs of the title insurance company and stating the name | 32 |
| and location of the court. All persons who may have claims | 33 |
| against the assets of the title insurance company, as | 34 |
| distinguished from the assets of insureds and escrow depositors |
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| held by the title insurance company, and the receiver to whom | 2 |
| those persons have presented their claims may present them to | 3 |
| the clerk of the court, and the allowance or disallowance of | 4 |
| the claims by the court in connection with the proceedings | 5 |
| shall be deemed an adjudication in a court of competent | 6 |
| jurisdiction. Within a reasonable time after completion of | 7 |
| publication, the receiver shall file with the court a correct | 8 |
| list of all creditors of the title insurance company as shown | 9 |
| by its books, who have not presented their claims and the | 10 |
| amount of their respective claims after allowing adjusted | 11 |
| credit, deductions, and set-offs as shown by the books of the | 12 |
| title insurance company. The claims so filed shall be deemed | 13 |
| proven unless objections are filed thereto by a party or | 14 |
| parties interested therein within the time fixed by the court. | 15 |
| (j) The receiver for a title insurance company has the | 16 |
| power and authority and is charged with the duties and | 17 |
| responsibilities as follows: | 18 |
| (1) To take possession of and, for the purpose of the | 19 |
| receivership, title to the books, records, and assets of | 20 |
| every description of the title insurance company. | 21 |
| (2) To proceed to collect all debts, dues, and claims | 22 |
| belonging to the title insurance company. | 23 |
| (3) To sell and compound all bad and doubtful debts on | 24 |
| such terms as the court shall direct. | 25 |
| (4) To sell the real and personal property of the title | 26 |
| insurance company, as distinguished from the real and | 27 |
| personal property of the insureds or escrow depositors, on | 28 |
| such terms as the court shall direct. | 29 |
| (5) To file with the Director a copy of each report | 30 |
| which he or she makes to the court, together with such | 31 |
| other reports and records as the Director may require. | 32 |
| (6) To sue and defend in his or her own name and with | 33 |
| respect to the affairs, assets, claims, debts, and choses | 34 |
| in action of the title insurance company. |
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| (7) To surrender to the insureds and escrow depositors | 2 |
| of the title insurance company, when requested in writing | 3 |
| directed to the receiver by them, the escrowed funds (on a | 4 |
| pro rata basis), and escrowed documents in the receiver's | 5 |
| possession upon satisfactory proof of ownership and | 6 |
| determination by the receiver of available escrow funds. | 7 |
| (8) To redeem or take down collateral hypothecated by | 8 |
| the title insurance company to secure its notes and other | 9 |
| evidence of indebtedness whenever the court deems it to be | 10 |
| in the best interest of the creditors of the title | 11 |
| insurance company and directs the receiver so to do. | 12 |
| (k) Whenever the receiver finds it necessary in his or her | 13 |
| opinion to use and employ money of the title insurance company | 14 |
| in order to protect fully and benefit the title insurance | 15 |
| company by the purchase or redemption of property, real or | 16 |
| personal, in which the title insurance company may have any | 17 |
| rights by reason of any bond, mortgage, assignment, or other | 18 |
| claim thereto, the receiver may certify the facts together with | 19 |
| the receiver's opinions as to the value of the property | 20 |
| involved, and the value of the equity the title insurance | 21 |
| company may have in the property to the court, together with a | 22 |
| request for the right and authority to use and employ so much | 23 |
| of the money of the title insurance company as may be necessary | 24 |
| to purchase the property, or to redeem the same from a sale if | 25 |
| there was a sale, and if the request is granted, the receiver | 26 |
| may use so much of the money of the title insurance company as | 27 |
| the court may have authorized to purchase the property at the | 28 |
| sale. | 29 |
| The receiver shall deposit daily all moneys collected by | 30 |
| him or her in any State or national bank approved by the court. | 31 |
| The deposits shall be made in the name of the Director, in | 32 |
| trust for the receiver, and be subject to withdrawal upon the | 33 |
| receiver's order or upon the order of those persons the | 34 |
| Director may designate. The moneys may be deposited without |
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| interest, unless otherwise agreed. The receiver shall do the | 2 |
| things and take the steps from time to time under the direction | 3 |
| and approval of the court that may reasonably appear to be | 4 |
| necessary to conserve the title insurance company's assets and | 5 |
| secure the best interests of the creditors, insureds, and | 6 |
| escrow depositors of the title insurance company. The receiver | 7 |
| shall record any judgment of dissolution entered in a | 8 |
| dissolution proceeding and thereupon turn over to the Director | 9 |
| a certified copy of the judgment. | 10 |
| The receiver may cause all assets of the insureds and | 11 |
| escrow depositors of the title insurance company to be | 12 |
| registered in the name of the receiver or in the name of the | 13 |
| receiver's nominee. | 14 |
| For its services in administering the escrows held by the | 15 |
| title insurance company during the period of winding up the | 16 |
| affairs of the title insurance company, the receiver is | 17 |
| entitled to be reimbursed for all costs and expenses incurred | 18 |
| by the receiver and shall also be entitled to receive out of | 19 |
| the assets of the individual escrows being administered by the | 20 |
| receiver during the period of winding up the affairs of the | 21 |
| title insurance company and prior to the appointment of a | 22 |
| successor escrowee the usual and customary fees charged by an | 23 |
| escrowee for escrows or reasonable fees approved by the court. | 24 |
| The receiver, during its administration of the escrows of | 25 |
| the title insurance company during the winding up of the | 26 |
| affairs of the title insurance company, shall have all of the | 27 |
| powers that are vested in trustees under the terms and | 28 |
| provisions of the Trusts and Trustees Act. | 29 |
| Upon the appointment of a successor escrowee, the receiver | 30 |
| shall deliver to the successor escrowee all of the assets | 31 |
| belonging to each individual escrow to which the successor | 32 |
| escrowee succeeds, and the receiver shall thereupon be relieved | 33 |
| of any further duties or obligations with respect thereto. | 34 |
| (l) The receiver shall, upon approval by the court, pay all |
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| claims against the assets of the title insurance company | 2 |
| allowed by the court pursuant to subsection (i) of this | 3 |
| Section, as well as claims against the assets of insureds and | 4 |
| escrow depositors of the title insurance company in accordance | 5 |
| with the following priority: | 6 |
| (1) All necessary and reasonable expenses of the | 7 |
| Director's possession and control and of its receivership | 8 |
| shall be paid from the assets of the title insurance | 9 |
| company. | 10 |
| (2) All usual and customary fees charged for services | 11 |
| in administering escrows shall be paid from the assets of | 12 |
| the individual escrows being administered. If the assets of | 13 |
| the individual escrows being administered are | 14 |
| insufficient, the fees shall be paid from the assets of the | 15 |
| title insurance company. | 16 |
| (3) Secured claims, including claims for taxes and | 17 |
| debts due the federal or any state or local government, | 18 |
| that are secured by liens perfected prior to the date of | 19 |
| filing of the complaint for dissolution, shall be paid from | 20 |
| the assets of the title insurance company. | 21 |
| (4) Claims by policyholders, beneficiaries, insureds | 22 |
| and escrow depositors of the title insurance company shall | 23 |
| be paid from the assets of the insureds and escrow | 24 |
| depositors. If there are insufficient assets of the | 25 |
| insureds and escrow depositors, claims shall be paid from | 26 |
| the assets of the title insurance company. | 27 |
| (5) Any other claims due the federal government shall | 28 |
| be paid from the assets of the title insurance company. | 29 |
| (6) Claims for wages or salaries, excluding vacation, | 30 |
| severance and sick leave pay earned by employees for | 31 |
| services rendered within 90 days prior to the date of | 32 |
| filing of the complaint for dissolution, shall be paid from | 33 |
| the assets of the title insurance company. | 34 |
| (7) All other claims of general creditors not falling |
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| within any priority under this subsection including claims | 2 |
| for taxes and debts due any state or local government which | 3 |
| are not secured claims and claims for attorney's fees | 4 |
| incurred by the title insurance company in contesting the | 5 |
| dissolution shall be paid from the assets of the title | 6 |
| insurance company. | 7 |
| (8) Proprietary claims asserted by an owner, member or | 8 |
| stockholder of the title insurance company in receivership | 9 |
| shall be paid from the assets of the title insurance | 10 |
| company. | 11 |
| The receiver shall pay all claims of equal priority | 12 |
| according to the schedule set out in this subsection and shall | 13 |
| not pay claims of lower priority until all higher priority | 14 |
| claims are satisfied. If insufficient assets are available to | 15 |
| meet all claims of equal priority, those assets shall be | 16 |
| distributed pro rata among those claims. All unclaimed assets | 17 |
| of the title insurance company shall be deposited with the | 18 |
| receiver to be paid out by him or her when the claims are | 19 |
| submitted and allowed by the court. | 20 |
| (m) At the termination of the receiver's administration, | 21 |
| the receiver shall petition the court for the entry of a | 22 |
| judgment of dissolution. After a hearing upon the notice as the | 23 |
| court may prescribe, the court may enter a judgment of | 24 |
| dissolution whereupon the title insurance company's corporate | 25 |
| existence shall be terminated and the receivership concluded. | 26 |
| (n) The receiver shall serve at the pleasure of the | 27 |
| Director and upon the death, inability to act, resignation, or | 28 |
| removal by the Director of a receiver, the Director may appoint | 29 |
| a successor, and upon the appointment, all rights and duties of | 30 |
| the predecessor shall at once devolve upon the appointee. | 31 |
| (o) Whenever the Director shall have taken possession and | 32 |
| control of a title insurance company or a title insurance agent | 33 |
| and its assets for the purpose of examination, reorganization | 34 |
| or liquidation through receivership, or whenever the Director |
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| shall have appointed a receiver for a title insurance company | 2 |
| or title insurance agent and filed a complaint for the | 3 |
| dissolution or winding up of its affairs, and the title | 4 |
| insurance company or title insurance agent denies the grounds | 5 |
| for such actions, it may at any time within 10 days apply to | 6 |
| the Circuit Court of Cook or Sangamon County to enjoin further | 7 |
| proceedings in the premises; and such Court shall cite the | 8 |
| Director to show cause why further proceedings should not be | 9 |
| enjoined, and if the Court shall find that such grounds do not | 10 |
| exist, the Court shall make an order enjoining the Director or | 11 |
| any receiver acting under his direction from all further | 12 |
| proceedings on account of such alleged grounds. | 13 |
| (215 ILCS 155/21.2 new) | 14 |
| Sec. 21.2. Notice.
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| (a) Notice of any action by the Director under this Act or | 16 |
| regulations or orders promulgated under it shall be made either | 17 |
| personally or by registered or certified mail, return receipt | 18 |
| requested, and by sending a copy of same by telephone facsimile | 19 |
| or electronic mail, if known and operating, and if unknown or | 20 |
| not operating, then by regular mail. Service by mail shall be | 21 |
| deemed completed if such notice is deposited as registered or | 22 |
| certified mail in the post office, postage paid, addressed to | 23 |
| the last known address specified in the application for the | 24 |
| certificate of authority to do business or certificate of | 25 |
| registration of such holder or registrant. | 26 |
| (b) The Director shall notify all registered agents of a | 27 |
| title insurance company when that title insurance company's | 28 |
| certificate of authority is suspended or revoked.
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| (215 ILCS 155/21.3 new) | 30 |
| Sec. 21.3. Record retention. Evidence of the examination of | 31 |
| title, if any, and determination of insurability for business | 32 |
| written by a title insurance company or its title insurance |
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| agent and records relating to escrow, closings, and security | 2 |
| deposits shall be preserved and retained by the title insurance | 3 |
| company or its title insurance agent for as long as appropriate | 4 |
| to the circumstances but, in no event, less than 7 years after | 5 |
| the title insurance policy has been issued or the escrow, | 6 |
| closing, or security deposit account has been closed or as | 7 |
| provided by applicable federal law. This Section shall not | 8 |
| apply to a title insurance company acting as a coinsurer if one | 9 |
| of the other coinsurers has complied with this Section.
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| (215 ILCS 155/23) (from Ch. 73, par. 1423)
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| Sec. 23. Violations; penalties.
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| (a) Any violation of any of the provisions of this Act | 13 |
| shall
constitute a business offense and shall subject the party | 14 |
| violating the
same to a penalty of $1000 for each offense.
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| (b) Nothing contained in this Section shall affect the | 16 |
| right of the Director to revoke or suspend a title insurance | 17 |
| company's or independent escrowee's certificate of authority | 18 |
| or a title insurance agent's registration under any other | 19 |
| Section of this Act.
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| (Source: P.A. 86-239.)
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| Section 99. Effective date. This Act takes effect upon | 22 |
| becoming law.".
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