[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Enrolled ] | [ Senate Amendment 001 ] |
91_SB0795eng SB795 Engrossed 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 SB795 Engrossed -2- LRB9101198LDmbB 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 real18estate" means the making as insurer or guarantor, or19proposing to make as insurer or guarantor, of any contract or20policy of title insurance; the transacting or proposing to21transact, any phase of title insurance, including, as an22insurer or guarantor, examination of title, solicitation,23negotiation preliminary to the execution of a contract of24title insurance, and execution of a contract of title25insurance, insuring and transacting matters subsequent to the26execution of the contract and arising out of it, other than27reinsurance; the performance of any service in conjunction28with the issuance of any contract or policy of title29insurance, including but not limited to the handling of any30escrow, settlement or closing, if conducted by a title31insurance company or title insurance agent; or the doing, or32proposing to do, any business in substance equivalent to any33of the foregoing in a manner designed to evade the provisions34of this Act.SB795 Engrossed -3- LRB9101198LDmbB 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, SB795 Engrossed -4- LRB9101198LDmbB 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, SB795 Engrossed -5- LRB9101198LDmbB 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 SB795 Engrossed -6- LRB9101198LDmbB 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, SB795 Engrossed -7- LRB9101198LDmbB 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 not qualified as an independent escrowee, may act in the 22 capacity of an escrow agent when it is supplying an abstract 23 of title, grantor-grantee search, tract search, lien search, 24 tax assessment search, or other limited purpose search to the 25 parties to the transaction even if it is not issuing a title 26 insurance commitment or title insurance policy. A title 27 insurance agent may act as an escrow agent only when 28 specifically authorized in writing on forms prescribed by the 29 Director by a title insurance company that has duly 30 registered the agent with the Director and only when notice 31 of the authorization is provided to and receipt thereof is 32 acknowledged by the Director. The authority granted to a 33 title insurance agent may be limited or revoked at any time 34 by the title insurance company. SB795 Engrossed -8- LRB9101198LDmbB 1 (Source: P.A. 86-239.)