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| [ Engrossed ] | [ Enrolled ] | [ Senate Amendment 001 ] |
91_SB0795
LRB9101198LDmbB
1 AN ACT to amend the Title Insurance Act by changing
2 Sections 3 and 17.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Title Insurance Act is amended by
6 changing Sections 3 and 17 as follows:
7 (215 ILCS 155/3) (from Ch. 73, par. 1403)
8 Sec. 3. As used in this Act, the words and phrases
9 following shall have the following meanings unless the
10 context requires otherwise:
11 (1) "Title insurance business" or "business of title
12 insurance" means:
13 (A) Issuing as insurer or offering to issue as
14 insurer title insurance; and
15 (B) Transacting or proposing to transact one or
16 more of the following activities when conducted or
17 performed in contemplation of or in conjunction with the
18 issuance of 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
24 interest in real property, cooperative units and
25 proprietary leases, and for all liens or charges
26 affecting the same;
27 (iii) handling of escrows, settlements, or
28 closings;
29 (iv) executing title insurance policies;
30 (v) effecting contracts of reinsurance;
31 (vi) abstracting, searching, or examining
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1 titles; or
2 (vii) issuing closing protection letters;
3 (C) Guaranteeing, warranting, or insuring searches
4 or examinations of title to real property or any interest
5 in real property, with the exception of preparing an
6 attorney's opinion of title; or
7 (D) Guaranteeing or warranting the status of title
8 as to ownership of or liens on real property and personal
9 property by any person other than the principals to the
10 transaction; or
11 (E) Doing or proposing to do any business
12 substantially equivalent to any of the activities listed
13 in this subsection, provided that the preparation of an
14 attorney's opinion of title pursuant to paragraph (1)(C)
15 is not intended to be within the definition of "title
16 insurance business" or "business of title insurance".
17 (1) "Business of guaranteeing or insuring titles to real
18 estate" means the making as insurer or guarantor, or
19 proposing to make as insurer or guarantor, of any contract or
20 policy of title insurance; the transacting or proposing to
21 transact, any phase of title insurance, including, as an
22 insurer or guarantor, examination of title, solicitation,
23 negotiation preliminary to the execution of a contract of
24 title insurance, and execution of a contract of title
25 insurance, insuring and transacting matters subsequent to the
26 execution of the contract and arising out of it, other than
27 reinsurance; the performance of any service in conjunction
28 with the issuance of any contract or policy of title
29 insurance, including but not limited to the handling of any
30 escrow, settlement or closing, if conducted by a title
31 insurance company or title insurance agent; or the doing, or
32 proposing to do, any business in substance equivalent to any
33 of the foregoing in a manner designed to evade the provisions
34 of this Act.
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1 (1.5) "Title insurance" means insuring, guaranteeing,
2 warranting, or indemnifying owners of real or personal
3 property or the holders of liens or encumbrances thereon or
4 others interested therein against loss or damage suffered by
5 reason of liens, encumbrances upon, defects in, or the
6 unmarketability of the title to the property; the invalidity
7 or unenforceability of any liens or encumbrances thereon; or
8 doing any business in substance equivalent to any of the
9 foregoing. "Warranting" for purpose of this provision shall
10 not include any warranty contained in instruments of
11 encumbrance or conveyance. An attorney's opinion of title
12 pursuant to paragraph (1)(C) is not intended to be within the
13 definition of "title insurance".
14 (2) "Title insurance company" means any domestic company
15 organized under the laws of this State for the purpose of
16 conducting the business of guaranteeing or insuring titles to
17 real estate and any title insurance company organized under
18 the laws of another State, the District of Columbia or
19 foreign government and authorized to transact the business of
20 guaranteeing or insuring titles to real estate in this State.
21 (3) "Title insurance agent" means a person, firm,
22 partnership, association, corporation or other legal entity
23 registered by a title insurance company and authorized by
24 such company to determine insurability of title in accordance
25 with generally acceptable underwriting rules and standards in
26 reliance on either the public records or a search package
27 prepared from a title plant, or both, and authorized in
28 addition to do any of the following: act as an escrow agent,
29 solicit title insurance, collect premiums, issue title
30 reports, binders or commitments to insure and policies in its
31 behalf, provided, however, the term "title insurance agent"
32 shall not include officers and salaried employees of any
33 title insurance company.
34 (4) "Producer of title business" is any person, firm,
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1 partnership, association, corporation or other legal entity
2 engaged in this State in the trade, business, occupation or
3 profession of (i) buying or selling interests in real
4 property, (ii) making loans secured by interests in real
5 property, or (iii) acting as broker, agent, attorney, or
6 representative of natural persons or other legal entities
7 that buy or sell interests in real property or that lend
8 money with such interests as security.
9 (5) "Associate" is any firm, association, partnership,
10 corporation or other legal entity organized for profit in
11 which a producer of title business is a director, officer, or
12 partner thereof, or owner of a financial interest, as defined
13 herein, in such entity; any legal entity that controls, is
14 controlled by, or is under common control with a producer of
15 title business; and any natural person or legal entity with
16 whom a producer of title business has any agreement,
17 arrangement, or understanding or pursues any course of
18 conduct the purpose of which is to evade the provisions of
19 this Act.
20 (6) "Financial interest" is any ownership interest,
21 legal or beneficial, except ownership of publicly traded
22 stock.
23 (7) "Refer" means to place or cause to be placed, or to
24 exercise any power or influence over the placing of title
25 business, whether or not the consent or approval of any other
26 person is sought or obtained with respect to the referral.
27 (8) "Escrow Agent" means any title insurance company or
28 any title insurance agent acting on behalf of a title
29 insurance company which receives deposits, in trust, of funds
30 or documents, or both, for the purpose of effecting the sale,
31 transfer, encumbrance or lease of real property to be held by
32 such escrow agent until title to the real property that is
33 the subject of the escrow is in a prescribed condition.
34 (9) "Independent Escrowee" means any firm, person,
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1 partnership, association, corporation or other legal entity,
2 other than a title insurance company or a title insurance
3 agent, which receives deposits, in trust, of funds or
4 documents, or both, for the purpose of effecting the sale,
5 transfer, encumbrance or lease of real property to be held by
6 such escrowee until title to the real property that is the
7 subject of the escrow is in a prescribed condition. Federal
8 and State chartered banks, savings and loan associations,
9 credit unions, mortgage bankers, banks or trust companies
10 authorized to do business under the Illinois Corporate
11 Fiduciary Act, licensees under the Consumer Installment Loan
12 Act, real estate brokers licensed pursuant to the Real Estate
13 License Act of 1983, as such Acts are now or hereafter
14 amended, and licensed attorneys when engaged in the
15 attorney-client relationship are exempt from the escrow
16 provisions of this Act.
17 (10) "Single risk" means the insured amount of any title
18 insurance policy, except that where 2 or more title insurance
19 policies are issued simultaneously covering different estates
20 in the same real property, "single risk" means the sum of the
21 insured amounts of all such title insurance policies. Any
22 title insurance policy insuring a mortgage interest, a claim
23 payment under which reduces the insured amount of a fee or
24 leasehold title insurance policy, shall be excluded in
25 computing the amount of a single risk to the extent that the
26 insured amount of the mortgage title insurance policy does
27 not exceed the insured amount of the fee or leasehold title
28 insurance policy.
29 (11) "Department" means the Department of Financial
30 Institutions.
31 (12) "Director" means the Director of Financial
32 Institutions.
33 (13) "Insured closing letter" or "closing protection
34 letter" means an indemnification or undertaking to a party to
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1 a real estate transaction, from a principal such as a title
2 insurance company or similar entity, setting forth in writing
3 the extent of the principal's responsibility for intentional
4 misconduct or errors in closing the real estate transaction
5 on the part of a settlement agent, such as a title insurance
6 agent or other settlement service provider.
7 (Source: P.A. 86-239.)
8 (215 ILCS 155/17) (from Ch. 73, par. 1417)
9 Sec. 17. Independent escrowees.
10 (a) Every independent escrowee shall be subject to the
11 same certification and deposit requirements to which title
12 insurance companies are subject under Section 4 of this Act.
13 (b) No person, firm, corporation or other legal entity
14 shall hold itself out to be an independent escrowee unless it
15 has been issued a certificate of authority by the Director.
16 (c) Every applicant for a certificate of authority,
17 except a firm, partnership, association or corporation, must
18 be 18 years or more of age.
19 (d) Every certificate of authority shall remain in
20 effect one year unless revoked or suspended by the Director
21 or voluntarily surrendered by the holder.
22 (e) An independent escrowee may engage in the escrow,
23 settlement, or closing business, or any combination of such
24 business, and operate as an escrow, settlement, or closing
25 agent, provided that:
26 (1) Funds deposited in connection with any escrow,
27 settlement, or closing shall be deposited in a separate
28 fiduciary trust account or accounts in a bank or other
29 financial institution insured by an agency of the federal
30 government unless the instructions provide otherwise.
31 Such funds shall be the property of the person or persons
32 entitled thereto under the provisions of the escrow,
33 settlement, or closing and shall be segregated by escrow,
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1 settlement or closing in the records of the independent
2 escrowee. Such funds shall not be subject to any debts
3 of the escrowee and shall be used only in accordance with
4 the terms of the individual escrow, settlement or closing
5 under which the funds were accepted.
6 (2) Interest received on funds deposited with the
7 independent escrowee in connection with any escrow,
8 settlement or closing shall be paid to the depositing
9 party unless the instructions provide otherwise.
10 (3) The independent escrowee shall maintain
11 separate records of all receipt and disbursement of
12 escrow, settlement or closing funds.
13 (4) The independent escrowee shall comply with any
14 rules or regulations promulgated by the Director
15 pertaining to escrow, settlement or closing transactions.
16 (f) The Director or his authorized representative shall
17 have the power and authority to visit and examine at any time
18 any independent escrowee certified under this Act and to
19 compel compliance with the provisions of this Act.
20 (g) A title insurance company or title insurance agent
21 may act in the capacity of an escrow agent even if it is not
22 issuing a title insurance commitment or policy and is not
23 qualified as an independent escrowee. A title insurance
24 agent may so act in this capacity only when specifically
25 authorized in writing, on forms prescribed by the Director,
26 by its title insurance company that has duly registered the
27 agent with the Director and only when the authorization is
28 filed with the Director. The authority granted to a title
29 insurance agent may be limited or revoked at any time by the
30 title insurance company.
31 (Source: P.A. 86-239.)