State of Illinois
92^nd General Assembly
Legislation

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92_SB0887eng

 
SB887 Engrossed                                LRB9205772JSpc

 1        AN ACT concerning title insurance.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Title  Insurance  Act  is  amended   by
 5    changing Sections 4, 5, 9, 11, 12, 13, 14, 16, 17, 21, and 23
 6    and adding Section 21.1 as follows:

 7        (215 ILCS 155/4) (from Ch. 73, par. 1404)
 8        Sec. 4.  Bonds and deposits.
 9        (a)  Each  year  before  doing  business  in the State of
10    Illinois, a title insurance company must file with  and  have
11    approved  by  the  Director a surety bond issued by a bonding
12    company, in which the company has no financial interest, that
13    is authorized to do business in this State  and  that  has  a
14    rating  in  one  of  the  3 highest grades as determined by a
15    national rating service.  The bond shall run to the  Director
16    and shall be for the benefit of any holder of a policy issued
17    by  the  title  insurance  company  or  the beneficiary of an
18    escrow  accepted by the title insurance company.
19        (b)  The surety bond must be  in  the  principal  sum  of
20    $100,000 plus $5,000 for each county, more than one, in which
21    the  real  estate,  upon  which  its  policies are issued, is
22    located, to a maximum amount of $500,000.  A title  insurance
23    company  guaranteeing  or  insuring  titles to real estate in
24    counties having 500,000 or more inhabitants must, in addition
25    to  filing  the  required  surety  bond,  deposit  with   the
26    Department cash or bonds of the United States, this State, or
27    any  body politic of this State in the amount of $500,000 for
28    the  benefit  of  any  holder  of  a  policy  it  issued   or
29    beneficiary  of an escrow it accepted.  The deposit shall not
30    be  otherwise  pledged  or  subject  to  distribution   among
31    creditors or stockholders.
 
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 1        (c)  The Director may provide for custody of the deposits
 2    by  any  trust  company  or  bank  located  in this State and
 3    qualified to do business under the Corporate  Fiduciary  Act.
 4    The  compensation,  if any, of the custodian shall be paid by
 5    the depositing company.  When the required deposits have been
 6    made by a title insurance company, the Director shall certify
 7    that the company has complied with  the  provisions  of  this
 8    Section  and  is  authorized  to  transact  the  business  of
 9    insuring and guaranteeing titles to real estate.
10        (d)  If,  at  any time, a  title insurance company causes
11    all  of  its  unexpired  policies,   escrow   deposits,   and
12    reinsurance  obligations  to  be  paid  in  full,  cancelled,
13    discharged,  reinsured, or otherwise assumed by another title
14    insurance company authorized to do business under  this  Act,
15    the Director shall, upon application of the company, verified
16    by  the  oath  of  its president or secretary, and upon being
17    satisfied by an examination of its  books  and  its  officers
18    under  oath  that  all  of  its  policies  are  paid in full,
19    cancelled,  discharged,  reinsured,  or  otherwise   assumed,
20    authorize  the  release  of  any bond or deposit posted under
21    this Section.
22        (e)  The Director may revoke the certificate of a company
23    that fails to maintain the surety bond or deposit required by
24    this Section.   The  Director  shall  mail  a  copy  of  that
25    revocation  to  the  company,  and  during  the  time  of the
26    revocation, the company may not  conduct  a  title  insurance
27    business.   A  revocation shall not be set aside until a good
28    and sufficient bond or deposit, or both, has been filed  with
29    the Department and the company has fulfilled all requirements
30    of this Act.
31        (a)  Every  title insurance company licensed or qualified
32    to do business in this State shall, within 30 days after  the
33    effective   date   of  this  Act  or  within  30  days  after
34    incorporated or licensed to do business, whichever is  later,
 
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 1    deposit with the Department, for the benefit of the creditors
 2    of the company by reason of any policy issued by it, bonds of
 3    the  United  States,  this  State or any body politic of this
 4    State in amounts as specified in subsection (b).   The  bonds
 5    and  securities  so deposited may be exchanged for other such
 6    securities.  No such  bond  or  security  shall  be  sold  or
 7    transferred  by  the  Director except on order of the circuit
 8    court or as provided in  subsection  (d).   As  long  as  the
 9    company  depositing  such  securities  remains  solvent,  the
10    company  shall  be permitted to receive from the Director the
11    interest on such deposit.
12        (b)  Every title insurance company shall deposit bonds or
13    securities in the sum of $50,000 plus $5,000 for each county,
14    more than one, in which the  real  estate,  upon  which  such
15    policies  are  issued,  is  located,  to  maximum  deposit of
16    $500,000.  Every  title  insurance  company  guaranteeing  or
17    insuring  titles to real estate in counties having 500,000 or
18    more inhabitants shall deposit securities with the Department
19    in the sum of $500,000.  Any title insurance  company  having
20    deposited $500,000 in securities with the Department shall be
21    entitled to guarantee or insure titles in any or all counties
22    of the State.
23        (c)  The   Director  may  provide  for  custody  of  such
24    securities by any trust company or bank located in this State
25    and qualified to do business under  the  Corporate  Fiduciary
26    Act,  as now or hereafter amended.  The compensation, if any,
27    of such custodian shall be paid by  the  depositing  company.
28    When  the required deposit has been made by a title insurance
29    company, the Director shall certify that it has complied with
30    the provisions of this Section and is authorized to  transact
31    the  business  of  insuring  and  guaranteeing titles to real
32    estate.
33        (d)  If a title insurance company shall at any time cause
34    all of its  unexpired  policies  to  be  paid,  cancelled  or
 
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 1    reinsured  and  all  of  its  liabilities under such policies
 2    thereby to be extinguished, or to be assumed by  some  surety
 3    or  other  responsible  company  authorized to do business in
 4    this State,  the  Director  shall,  on  application  of  such
 5    company,  verified  by the oath of its president or secretary
 6    and on being satisfied by an examination of its books and its
 7    officers under oath that all of its  policies  are  so  paid,
 8    cancelled,  extinguished  or reinsured, deliver up to it such
 9    securities.
10    (Source: P.A. 86-239.)

11        (215 ILCS 155/5) (from Ch. 73, par. 1405)
12        Sec.  5.  Certificate  of  authority  required.   It   is
13    unlawful  shall not be lawful for any company to engage or to
14    continue in the business of guaranteeing or  insuring  titles
15    to  real  estate, without first procuring from the Director a
16    certificate of authority stating that the such a company  has
17    complied  with the requirements of Section 4 of this Act.  If
18    any company shall fail to maintain a deposit as  required  by
19    this   Act,  the  Director  may  revoke  the  certificate  of
20    authority granted on behalf of such  company.   The  Director
21    shall  mail  a  copy  of  that revocation to the company  and
22    during the time of such  revocation  the  company  shall  not
23    conduct  such  business.  A revocation shall not be set aside
24    until a good and sufficient deposit shall have been made with
25    the Department, fulfilling all the requirements of this Act.
26    (Source: P.A. 86-239.)

27        (215 ILCS 155/9) (from Ch. 73, par. 1409)
28        Sec.  9.  Impairment  of  capital;    discontinuance   of
29    issuance of new policies;  penalty.
30        (a)  Whenever  the  capital  of  a  any  title  insurance
31    company  authorized to do business under this Act is shall be
32    determined by the circuit court, upon the application of  the
 
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 1    Director,  to be have become impaired to the extent of 25% of
 2    the capital same, or to  have  otherwise  become  unsafe,  it
 3    shall be the duty of the Director may to cancel the authority
 4    of the such company to do business.
 5        (b)  The  Director  shall give notice to the such company
 6    to discontinue issuing new policies until  its  such  capital
 7    has been made good.
 8        (c)  Any  officer  who  issues  a  new  policy  of  title
 9    insurance  on behalf of a such company after a such notice to
10    discontinue issuing  policies,  and  before  its  until  such
11    capital has been made good, shall, for each offense, be fined
12    a  sum  not  exceeding  $5,000  forfeit  a  sum not exceeding
13    $1,000.
14    (Source: P.A. 86-239.)

15        (215 ILCS 155/11) (from Ch. 73, par. 1411)
16        Sec. 11.  Statutory premium reserve.
17        (a) A domestic title insurance  company  shall  establish
18    and   maintain   a  statutory  premium  reserve  computed  in
19    accordance with this Section. The reserve shall  be  reported
20    as  a  liability  of  the  title  insurance  company  in  its
21    financial  statements. The statutory premium reserve shall be
22    maintained by the title insurance company for the  protection
23    of  holders  of title insurance policies.  Except as provided
24    in this Section, assets  equal  in  value  to  the  statutory
25    premium   reserve  are  not  subject  to  distribution  among
26    creditors or stockholders  of  the  title  insurance  company
27    until   all   claims   of   policyholders  or  claims   under
28    reinsurance  contracts  have  been  paid  in  full,  and  all
29    liability on the policies or reinsurance contracts  has  been
30    paid  in  full  and  discharged,  or  lawfully  reinsured, or
31    otherwise  assumed  by  another   title   insurance   company
32    authorized to do business under this Act.
33        (b)  A   foreign   or   alien   title  insurance  company
 
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 1    authorized to do business under this Act  shall  maintain  at
 2    least the same reserves on title insurance policies issued on
 3    properties  located in this State as are required of domestic
 4    title insurance companies.
 5        (c)  The statutory premium reserve shall consist of:
 6             (1)  the amount of the statutory premium reserve  on
 7        January 1, 1990; and
 8             (2)  a  sum equal to 12 1/2 cents for each $1,000 of
 9        net retained liability under each title insurance  policy
10        on  a  single  risk written on properties located in this
11        State after January 1, 1990.
12        (d)  Amounts placed in the statutory premium  reserve  in
13    any year in accordance with this Section shall be deducted in
14    determining the net profit of the title insurance company for
15    that year.
16        (e)  A  title  insurance  company  shall release from the
17    statutory premium reserve a sum equal to 10%  of  the  amount
18    added to the reserve during a calendar year on July 1 of each
19    of the 5 years following the year in which the sum was added,
20    and  shall  release  from the statutory premium reserve a sum
21    equal to 3 1/3% of the amount added  to  the  reserve  during
22    that  year  on each succeeding July 1 until the entire amount
23    for that year has been released.  The amount of the statutory
24    premium reserve or similar premium reserve maintained  before
25    January 1, 1990, shall be released in accordance with the law
26    in effect before January 1, 1990.
27    (Source: P.A. 86-239; 87-1151.)

28        (215 ILCS 155/12) (from Ch. 73, par. 1412)
29        Sec. 12.  Examination; audit.
30        (a)  The  Director or his authorized representative shall
31    have the power and authority, and it shall be  his  duty,  to
32    cause to be visited and examined annually any title insurance
33    company  doing  business  under  this  Act, and to verify and
 
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 1    compel a compliance with the provisions of law  governing  it
 2    as he may by law exercise in relation to trust companies.
 3        (b)  The  Director  or  his  authorized  agent shall have
 4    power and authority to compel compliance with the  provisions
 5    of  this  Act and shall, only upon the showing of good cause,
 6    require any title insurance company to obtain the appropriate
 7    records of its registered agents and make them available  for
 8    audit  at  a  time  and  place  designated  by  the Director.
 9    Expenses incurred in the course of such audits  will  be  the
10    responsibility of the title insurance company.
11    (Source: P.A. 86-239.)

12        (215 ILCS 155/13) (from Ch. 73, par. 1413)
13        Sec. 13.  Annual statement.
14        (a)  A  Each  title insurance company shall file with the
15    Department  during  the  month  of  March  of  each  year,  a
16    statement under oath, of the condition of such company on the
17    thirty-first day of December next  preceding  disclosing  the
18    assets,  liabilities,  earnings  and expenses of the company.
19    The report shall be in  such  form  and  shall  contain  such
20    additional  statements  and  information  as  to the affairs,
21    business, and conditions of the company as the  Director  may
22    from time to time prescribe or require.
23        (b)  By  June  1  of each year, a title insurance company
24    must file with the Department a copy of its audited financial
25    statements.
26    (Source: P.A. 86-239.)

27        (215 ILCS 155/14) (from Ch. 73, par. 1414)
28        Sec. 14.  Fees.
29        (a)  A  Every  title  insurance  company  and  an   every
30    independent  escrowee  subject  to  this  Act  shall  pay the
31    following fees:
32             (1)  for  filing  the  original  application  for  a
 
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 1        certificate  of  authority  and  receiving  the   deposit
 2        required under this Act, $500;
 3             (2)  for the certificate of authority, $10;
 4             (3)  for   every  copy  of  a  paper  filed  in  the
 5        Department under this Act, $1 per folio;
 6             (4)  for affixing the seal  of  the  Department  and
 7        certifying a copy, $2;
 8             (5)  for filing the annual statement, $50; and.
 9             (6)  for  each examination $500 per examiner per day
10        or part of a day and actual travel costs incurred.
11        (b)  A Each title insurance company shall pay, for all of
12    its title insurance agents subject to this Act for filing  an
13    annual  registration  of  its  agents,  an amount equal to $5
14    $1.00 for each policy issued by it and all of its  agents  in
15    the  immediately  preceding  calendar year, provided such sum
16    shall not exceed $75,000 $20,000 per annum.
17    (Source: P.A. 86-239.)

18        (215 ILCS 155/16) (from Ch. 73, par. 1416)
19        Sec. 16.  Title insurance agents.
20        (a)  No   person,   firm,    partnership,    association,
21    corporation or other legal entity shall act as or hold itself
22    out to be a title insurance agent unless duly registered by a
23    title  insurance  company  with  the  Director.  The Director
24    shall impose a fine not to exceed $1,000 for  each  violation
25    of this registration requirement.
26        (b)  Each application for registration shall be made on a
27    form  specified  by the Director and prepared in duplicate by
28    each title insurance company which the agent represents.  The
29    title  insurance  company  shall  retain  the  copy  of   the
30    application and forward the original to the Director with the
31    appropriate fee.
32        (c)  Every  applicant  for  registration,  except a firm,
33    partnership, association or corporation, must be 18 years  or
 
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 1    more of age.
 2        (d)  Registration shall be made annually by a filing with
 3    the   Director;  supplemental  registrations  for  new  title
 4    insurance agents to be added between annual filings shall  be
 5    made  from  time  to  time  in  the  manner  provided  by the
 6    Director; registrations shall remain in effect unless revoked
 7    or suspended by the Director or are voluntarily withdrawn  by
 8    the registrant or the title insurance company.
 9    (Source: P.A. 86-239.)

10        (215 ILCS 155/17) (from Ch. 73, par. 1417)
11        Sec. 17.  Independent escrowees.
12        (a)  Every  independent  escrowee shall be subject to the
13    same certification and deposit requirements  to  which  title
14    insurance companies are subject under Section 4 of this Act.
15        (b)  No  person,  firm, corporation or other legal entity
16    shall hold itself out to be an independent escrowee unless it
17    has been issued a certificate of authority by the Director.
18        (c)  Every applicant  for  a  certificate  of  authority,
19    except  a firm, partnership, association or corporation, must
20    be 18 years or more of age.
21        (d)  Every  certificate  of  authority  shall  remain  in
22    effect one year unless revoked or suspended by  the  Director
23    or voluntarily surrendered by the holder.
24        (e)  An  independent  escrowee  may engage in the escrow,
25    settlement, or closing business, or any combination  of  such
26    business,  and  operate  as an escrow, settlement, or closing
27    agent, provided that:
28             (1)  Funds deposited in connection with any  escrow,
29        settlement,  or  closing shall be deposited in a separate
30        fiduciary trust account or accounts in a  bank  or  other
31        financial institution insured by an agency of the federal
32        government  unless  the  instructions  provide otherwise.
33        Such funds shall be the property of the person or persons
 
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 1        entitled thereto under  the  provisions  of  the  escrow,
 2        settlement, or closing and shall be segregated by escrow,
 3        settlement  or  closing in the records of the independent
 4        escrowee.  Such funds shall not be subject to  any  debts
 5        of the escrowee and shall be used only in accordance with
 6        the terms of the individual escrow, settlement or closing
 7        under which the funds were accepted.
 8             (2)  Interest  received  on funds deposited with the
 9        independent  escrowee  in  connection  with  any  escrow,
10        settlement or closing shall be  paid  to  the  depositing
11        party unless the instructions provide otherwise.
12             (3)  The   independent   escrowee   shall   maintain
13        separate  records  of  all  receipt  and  disbursement of
14        escrow, settlement or closing funds.
15             (4)  The independent escrowee shall comply with  any
16        rules   or   regulations   promulgated  by  the  Director
17        pertaining to escrow, settlement or closing transactions.
18        (f)  The Director or his authorized representative  shall
19    have the power and authority to visit and examine at any time
20    any  independent  escrowee  certified  under  this Act and to
21    compel compliance with the provisions of this Act.
22        (g)  A title insurance company or title insurance  agent,
23    not  qualified  as  an  independent  escrowee, may act in the
24    capacity of an escrow agent when it is supplying an  abstract
25    of  title, grantor-grantee search, tract search, lien search,
26    tax assessment search, or other limited purpose search to the
27    parties to the transaction even if it is not issuing a  title
28    insurance  commitment  or  title  insurance  policy.  A title
29    insurance  agent  may  act  as  an  escrow  agent  only  when
30    specifically authorized in writing on forms prescribed by the
31    Director  by  a  title  insurance  company  that   has   duly
32    registered  the  agent with the Director and only when notice
33    of the authorization is provided to and  receipt  thereof  is
34    acknowledged  by  the  Director.   The authority granted to a
 
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 1    title insurance agent may be limited or revoked at  any  time
 2    by the title insurance company.
 3        (h)  The  Director  shall  impose  a  fine  not to exceed
 4    $1,000  for  each  violation  of  the  requirements  of  this
 5    Section.
 6    (Source: P.A. 91-159, eff. 1-1-00.)

 7        (215 ILCS 155/21) (from Ch. 73, par. 1421)
 8        Sec. 21.  Regulatory action.
 9        (a)  The Director may refuse to grant, and may suspend or
10    revoke, any certificate of authority, registration or license
11    issued pursuant to this Act and may fine  any  registrant  or
12    licensee  in an amount not exceeding $10,000 per violation if
13    he determines that  the  holder  of  or  applicant  for  such
14    certificate, registration or license:
15             (1)  has  intentionally made a material misstatement
16        or fraudulent misrepresentation in relation to  a  matter
17        covered by this Act;
18             (2)  has  misappropriated or tortiously converted to
19        its own use, or illegally  withheld,  monies  held  in  a
20        fiduciary capacity;
21             (3)  has     demonstrated    untrustworthiness    or
22        incompetency in transacting the business of  guaranteeing
23        titles to real estate in such a manner as to endanger the
24        public;
25             (4)  has  materially  misrepresented  the  terms  or
26        conditions  of  contracts  or agreements to which it is a
27        party;
28             (5)  has paid any commissions, discounts or any part
29        of its premiums, fees or other charges to any  person  in
30        violation  of  any State or federal law or regulations or
31        opinion letters issued  under  the  federal  Real  Estate
32        Settlement Procedures Act of 1974; or
33             (6)  has  failed  to  comply  with  the  deposit and
 
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 1        reserve  requirements  of   this   Act   or   any   other
 2        requirements of this Act.
 3        (b)  In every case where a registration or certificate is
 4    suspended or revoked, or an application for a registration or
 5    certificate or renewal thereof is refused, the Director shall
 6    serve  notice  of  his  action,  including a statement of the
 7    reasons for his action, either personally or by registered or
 8    certified mail.  Service by mail shall be deemed completed if
 9    such notice is deposited in the post  office,  postage  paid,
10    addressed   to  the  last  known  address  specified  in  the
11    application for  the  certificate  or  registration  of  such
12    holder or registrant.
13        (c)  In  the  case  of  a  refusal  to  issue  or renew a
14    certificate  or  accept  a  registration,  the  applicant  or
15    registrant may request in writing, within 30 days  after  the
16    date  of  service,  a  hearing.   In the case of a refusal to
17    renew, the expiring  registration  or  certificate  shall  be
18    deemed  to  continue in force until 30 days after the service
19    of the notice of  refusal  to  renew,  or  if  a  hearing  is
20    requested  during that period, until a final order is entered
21    pursuant to such hearing.
22        (d)  The suspension or revocation of  a  registration  or
23    certificate shall take effect upon service of notice thereof.
24    The  holder of any such suspended registration or certificate
25    may request in writing, within 30 days  of  such  service,  a
26    hearing.
27        (e)  In cases of suspension or revocation of registration
28    pursuant  to  subsection (a), the Director may, in the public
29    interest, issue an order of suspension  or  revocation  which
30    shall take effect upon service of notification thereof.  Such
31    order  shall  become  final  60 days from the date of service
32    unless the registrant requests in  writing,  within  such  60
33    days,  a  formal  hearing thereon.  In the event a hearing is
34    requested, the order shall remain  temporary  until  a  final
 
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 1    order is entered pursuant to such hearing.
 2        (f)  Hearing  shall be held at such time and place as may
 3    be  designated  by  the  Director  either  in  the  City   of
 4    Springfield,  the  City of Chicago, or in the county in which
 5    the principal business office of the affected  registrant  or
 6    certificate holder is located.
 7        (g)  The  suspension  or  revocation of a registration or
 8    certificate or the refusal to issue or renew  a  registration
 9    or  certificate  shall  not in any way limit or terminate the
10    responsibilities of  any  registrant  or  certificate  holder
11    arising  under  any  policy or contract of title insurance to
12    which it is a party.  No new  contract  or  policy  of  title
13    insurance  may  be  issued,  nor  may  any existing policy or
14    contract to title insurance be renewed by any  registrant  or
15    certificate   holder  during  any  period  of  suspension  or
16    revocation of a registration or certificate.
17        (h)  The Director may issue a cease and desist order to a
18    title  insurance  company,  agent,  or  other  entity   doing
19    business  without  the required license or registration, when
20    in the opinion of the Director, the company, agent, or  other
21    entity  is  violating or is about to violate any provision of
22    this Act or any law or of any rule or  condition  imposed  in
23    writing by the Department.
24        The Director may issue the cease and desist order without
25    notice and before a hearing.
26        The  Director shall have the authority to prescribe rules
27    for the administration of this Section.
28        If it is determined that the Director had  the  authority
29    to issue the cease and desist order, he may issue such orders
30    as  may  be  reasonably  necessary  to  correct, eliminate or
31    remedy such conduct.
32        Any person or company subject to  an  order  pursuant  to
33    this  Section  is entitled to judicial review of the order in
34    accordance with the provisions of the  Administrative  Review
 
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 1    Law.
 2        The  powers  vested  in  the Director by this Section are
 3    additional to any and all other powers and remedies vested in
 4    the Director by law, and nothing in  this  Section  shall  be
 5    construed  as  requiring  that  the Director shall employ the
 6    powers conferred in this Section instead of or as a condition
 7    precedent to the exercise of any other power or remedy vested
 8    in the Director.
 9    (Source: P.A. 89-601, eff. 8-2-96.)

10        (215 ILCS 155/21.1 new)
11        Sec. 21.1.  Receiver and involuntary liquidation.
12        (a)  The proceedings under  this  Section  shall  be  the
13    exclusive  remedy  and  the only proceedings commenced in any
14    court for the dissolution of, the winding up of  the  affairs
15    of,  or  the  appointment of a receiver for a title insurance
16    company.
17        (b)  If the Director, with respect to a  title  insurance
18    company,  finds  that  (1)  its  capital is impaired or it is
19    otherwise in an unsound condition, (2) its business is  being
20    conducted  in  an unlawful, fraudulent, or unsafe manner, (3)
21    it is unable to continue operations, or (4)  its  examination
22    has  been obstructed or impeded, the Director may give notice
23    to the board of directors of the title insurance  company  of
24    his  finding  or  findings.  If the Director's finding is not
25    corrected to his or her satisfaction within 60 days after the
26    company  receives  the  notice,  the  Director   shall   take
27    possession  and  control  of the title insurance company, its
28    assets, and assets held by it for any person for the  purpose
29    of   examination,   reorganization,  or  liquidation  through
30    receivership.
31        If, in addition to making a finding as provided  in  item
32    (1),  (2),  (3),  or  (4), the Director is of the opinion and
33    finds that an emergency that may result in serious losses  to
 
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 1    any   person   exists,  the  Director  may,  in  his  or  her
 2    discretion, without having given the notice provided for this
 3    subsection,  and whether or not proceedings under  subsection
 4    (a) of this Section have been instituted or are then pending,
 5    take  possession  and  control of the title insurance company
 6    and   its   assets   for   the   purpose   of    examination,
 7    reorganization, or liquidation through receivership.
 8        (c)  The  Director  may  take possession and control of a
 9    title insurance company, its assets, and assets  held  by  it
10    for any person by posting upon the premises of each office at
11    which  it transacts its business as a title insurance company
12    a notice reciting that the Director  is  assuming  possession
13    pursuant  to  this Act and the time when the possession shall
14    be deemed to commence.
15        (d)  Promptly after taking possession and  control  of  a
16    title  insurance  company  the  Director,  represented by the
17    Attorney General, shall file a copy of the notice posted upon
18    the premises in the Circuit Court of either  Cook  County  or
19    Sangamon  County, Illinois, which cause shall be entered as a
20    court action upon the dockets of the court under the name and
21    style of "In the matter of the possession and control by  the
22    Director  of  the  Department  of  Financial  Institutions of
23    (insert the name of the title  insurance  company)".  If  the
24    Director  determines  (which determination may be made at the
25    time of, or at any time subsequent to, taking possession  and
26    control  of  a  title  insurance  company)  that no practical
27    possibility exists to reorganize the title insurance  company
28    after  reasonable  efforts  have  been  made,  the  Director,
29    represented  by  the  Attorney  General  shall  also  file  a
30    complaint,   if  it  has  not  already  been  done,  for  the
31    appointment of a receiver or  such  other  proceeding  as  is
32    appropriate  under  the  circumstances.  The  court where the
33    cause  is  docketed  shall  be  vested  with  the   exclusive
34    jurisdiction  to  hear  and  determine all issues and matters
 
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 1    pertaining to or connected with the Director's possession and
 2    control of the title insurance company as  provided  in  this
 3    Act,  and  any  further  issues  and matters pertaining to or
 4    connected with the Director's possession and control  as  may
 5    be submitted to the court for its adjudication.
 6        The  Director,  upon  taking  possession and control of a
 7    title insurance company, may, and  if  not  previously  done,
 8    shall  immediately  upon  filing  a complaint for dissolution
 9    make an examination of the affairs  of  the  title  insurance
10    company  or appoint a suitable person to make the examination
11    as the Director's agent. The examination shall  be  conducted
12    in  accordance  with  and  pursuant  to the authority granted
13    under Section 12 of  this  Act.  The  person  conducting  the
14    examination  shall  have  and  may  exercise on behalf of the
15    Director all of the  powers  and  authority  granted  to  the
16    Director  under  Section  12.  A  copy of the report shall be
17    filed in any dissolution proceeding filed  by  the  Director.
18    The  reasonable  fees and necessary expenses of the examining
19    person, as approved by the Director or as recommended by  the
20    Director   and   approved  by  the  court  if  a  dissolution
21    proceeding has been filed, shall  be  borne  by  the  subject
22    title  insurance company and shall have the same priority for
23    payment as the  reasonable  and  necessary  expenses  of  the
24    Director  in  conducting an examination. The person appointed
25    to make the examination shall make a  proper  accounting,  in
26    the  manner  and  scope  as  determined by the Director to be
27    practical and advisable under the circumstances, on behalf of
28    the title insurance company and no guardian ad litem need  be
29    appointed to review the accounting.
30        (e)  The  Director, upon taking possession and control of
31    a title insurance company and its  assets,  shall  be  vested
32    with the full powers of management and control including, but
33    not limited to, the following:
34             (1)  the  power  to  continue  or to discontinue the
 
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 1        business;
 2             (2)  the power to stop or to limit  the  payment  of
 3        its obligations;
 4             (3)  the  power to collect and to use its assets and
 5        to give valid receipts and acquittances therefor;
 6             (4)  the power to transfer title and  liquidate  any
 7        bond or deposit made under Section 4 of this Act;
 8             (5)  the  power  to  employ and to pay any necessary
 9        assistants;
10             (6)  the power to execute any instrument in the name
11        of the title insurance company;
12             (7)  the power to commence, defend, and  conduct  in
13        its  name  any  action or proceeding in which it may be a
14        party;
15             (8)  the power, upon the order of the court, to sell
16        and convey its assets, in whole or in part, and  to  sell
17        or  compound  bad  or  doubtful debts upon such terms and
18        conditions as may be fixed in that order;
19             (9)  the power, upon the order of the court, to make
20        and to carry out agreements with  other  title  insurance
21        companies,  financial  institutions,  or  with the United
22        States or any agency of the United States for the payment
23        or  assumption   of   the   title   insurance   company's
24        liabilities,  in whole or in part, and to transfer assets
25        and  to  make  guaranties,  in  whole  or  in  part,   in
26        connection therewith;
27             (10)  the  power,  upon  the  order of the court, to
28        borrow money in the name of the title  insurance  company
29        and to pledge its assets as security for the loan;
30             (11)  the  power  to terminate his or her possession
31        and control by restoring the title insurance  company  to
32        its board of directors;
33             (12)  the  power  to appoint a receiver which may be
34        the Office of the Director of the Department of Financial
 
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 1        Institutions, another title insurance company, or another
 2        suitable person and to order  liquidation  of  the  title
 3        insurance company as provided in this Act; and
 4             (13)  the  power,  upon  the  order of the court and
 5        without the appointment of a receiver, to determine  that
 6        the  title  insurance  company  has  been  closed for the
 7        purpose of liquidation without adequate  provision  being
 8        made  for  payment  of its obligations, and thereupon the
 9        title insurance company shall  be  deemed  to  have  been
10        closed on account of inability to meet its obligations to
11        its insureds or escrow depositors.
12        (f)  Upon  taking  possession, the Director shall make an
13    examination of the condition of the title insurance  company,
14    an  inventory  of  the  assets  and, unless the time shall be
15    extended by order of the court or unless the  Director  shall
16    have  otherwise  settled  the  affairs of the title insurance
17    company pursuant to the provisions of  this  Act,  within  90
18    days  after  the time of taking possession and control of the
19    title insurance company, the Director shall either  terminate
20    his  possession  and control by restoring the title insurance
21    company to its board of directors or appoint a receiver which
22    may be the Office  of  the  Director  of  the  Department  of
23    Financial  Institutions,  another title insurance company, or
24    another suitable person and  order  the  liquidation  of  the
25    title   insurance  company  as  provided  in  this  Act.  All
26    necessary  and  reasonable   expenses   of   the   Director's
27    possession and control shall be a priority claim and shall be
28    borne  by  the title insurance company and may be paid by the
29    Director from the title insurance  company's  own  assets  as
30    distinguished from assets held for any other person.
31        (g)  If  the  Director  takes possession and control of a
32    title  insurance  company  and  its  assets,  any  period  of
33    limitation  fixed  by  a  statute  or  agreement  that  would
34    otherwise expire on a claim or right of action of  the  title
 
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 1    insurance  company,  on  its  own  behalf or on behalf of its
 2    insureds or escrow depositors, or upon which an  appeal  must
 3    be taken or a pleading or other document must be filed by the
 4    title  insurance  company in any pending action or proceeding
 5    shall be tolled until 6 months after the commencement of  the
 6    possession, and no judgment, lien, levy, attachment, or other
 7    similar  legal process must be enforced upon or satisfied, in
 8    whole or in part, from  any  asset  of  the  title  insurance
 9    company  or  from any asset of an insured or escrow depositor
10    while it is in the possession of the Director.
11        (h)  If  the  Director  appoints  a  receiver   to   take
12    possession  and  control  of the assets of insureds or escrow
13    depositors  for  the  purpose  of  holding  those  assets  as
14    fiduciary  for  the  benefit  of  the  insureds   or   escrow
15    depositors pending the winding up of the affairs of the title
16    insurance  company  being liquidated and the appointment of a
17    successor escrowee for those assets, any period of limitation
18    fixed by statute, rule of  court,  or  agreement  that  would
19    otherwise expire on a claim or right of action in favor of or
20    against  the insureds or escrow depositors of those assets or
21    upon which an appeal must be taken or  a  pleading  or  other
22    document   must  be  filed  by  a  title insurance company on
23    behalf of an insured  or  escrow  depositor  in  any  pending
24    action or proceeding shall be tolled for a period of 6 months
25    after  the  appointment of a receiver, and no judgment, lien,
26    levy, attachment, or other similar  legal  process  shall  be
27    enforced  upon  or  satisfied,  in whole or in part, from any
28    asset of the insured or escrow depositor while it is  in  the
29    possession of the receiver.
30        (i)  If  the  Director  determines  at  any  time that no
31    reasonable possibility exists for the title insurance company
32    to be operated by its board of directors in  accordance  with
33    the provisions of this Act after reasonable efforts have been
34    made  and  that it should be liquidated through receivership,
 
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 1    he or she shall appoint a receiver. The Director may  require
 2    of  the receiver such bond and security as the Director deems
 3    proper. The Director, represented by  the  Attorney  General,
 4    shall  file  a complaint for the dissolution or winding up of
 5    the affairs of the title insurance company in a court of  the
 6    county  in  which the principal office of the title insurance
 7    company is located and shall cause notice to be  given  in  a
 8    newspaper  of  general  circulation  once  each  week  for  4
 9    consecutive weeks so that persons who may have claims against
10    the  title insurance company may present them to the receiver
11    and make legal proof thereof and notifying those persons  and
12    all  to  whom it may concern of the filing of a complaint for
13    the dissolution or winding up of the  affairs  of  the  title
14    insurance  company  and  stating the name and location of the
15    court. All persons who may have claims against the assets  of
16    the title insurance company, as distinguished from the assets
17    of insureds and escrow depositors held by the title insurance
18    company,   and  the  receiver  to  whom  those  persons  have
19    presented their claims may present them to the clerk  of  the
20    court, and the allowance or disallowance of the claims by the
21    court  in  connection with the proceedings shall be deemed an
22    adjudication in  a  court  of  competent  jurisdiction.   The
23    receiver  shall  file  with  the  court a correct list of all
24    creditors of the title insurance  company  as  shown  by  its
25    books,  who have not presented their claims and the amount of
26    their  respective  claims  after  allowing  adjusted  credit,
27    deductions, and set-offs as shown by the books of  the  title
28    insurance  company.   The  claims  so  filed  shall be deemed
29    proven unless objections are filed  thereto  by  a  party  or
30    parties  interested  therein  within  the  time  fixed by the
31    court.
32        (j)  The receiver for a title insurance company  has  the
33    power  and  authority  and  is  charged  with  the duties and
34    responsibilities as follows:
 
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 1             (1)  To take possession of and, for the  purpose  of
 2        the receivership, title to the books, records, and assets
 3        of every description of the title insurance company.
 4             (2)  To  proceed  to  collect  all  debts, dues, and
 5        claims belonging to the title insurance company.
 6             (3)  To sell and compound all bad and doubtful debts
 7        on such terms as the court shall direct.
 8             (4)  To sell the real and personal property  of  the
 9        title  insurance  company, as distinguished from the real
10        and  personal  property  of  the   insureds   or   escrow
11        depositors, on such terms as the court shall direct.
12             (5)  To file with the Director a copy of each report
13        which  he  or  she makes to the court, together with such
14        other reports and records as the Director may require.
15             (6)  To sue and defend in his or her  own  name  and
16        with  respect  to the affairs, assets, claims, debts, and
17        choses in action of the title insurance company.
18             (7)  To  surrender  to  the  insureds   and   escrow
19        depositors of the title insurance company, when requested
20        in writing directed to the receiver by them, the escrowed
21        funds  (on  a  pro rata basis), and escrowed documents in
22        the receiver's  possession  upon  satisfactory  proof  of
23        ownership  and determination by the receiver of available
24        escrow funds.
25             (8)  To redeem or take down collateral  hypothecated
26        by  the  title  insurance company to secure its notes and
27        other evidence of indebtedness whenever the  court  deems
28        it  to  be  in  the best interest of the creditors of the
29        title insurance company and directs the  receiver  so  to
30        do.
31        (k)  Whenever  the  receiver finds it necessary in his or
32    her opinion to use and employ money of  the  title  insurance
33    company  in  order  to  protect  fully  and benefit the title
34    insurance company  by  the  purchase  or  redemption  of  any
 
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 1    property,  real  or  personal,  in  which the title insurance
 2    company may have any rights by reason of any bond,  mortgage,
 3    assignment,  or other claim thereto, the receiver may certify
 4    the facts together with the receiver's  opinions  as  to  the
 5    value  of  the property involved, and the value of the equity
 6    the title insurance company may have in the property  to  the
 7    court, together with a request for the right and authority to
 8    use  and  employ  so much of the money of the title insurance
 9    company as may be necessary to purchase the property,  or  to
10    redeem  the  same from a sale if there was a sale, and if the
11    request is granted, the receiver may use so much of the money
12    of  the  title  insurance  company  as  the  court  may  have
13    authorized to purchase the property at the sale.
14        The receiver shall deposit daily all moneys collected  by
15    him  or  her  in  any  State or national bank approved by the
16    court. The  deposits  shall  be  made  in  the  name  of  the
17    Director,  in  trust  for  the  receiver,  and  be subject to
18    withdrawal upon the receiver's order or  upon  the  order  of
19    those  persons  the Director may designate. The moneys may be
20    deposited without  interest,  unless  otherwise  agreed.  The
21    receiver  shall do the things and take the steps from time to
22    time under the direction and approval of the court  that  may
23    reasonably  appear  to  be  necessary  to  conserve the title
24    insurance company's assets and secure the best  interests  of
25    the  creditors,  insureds, and escrow depositors of the title
26    insurance company. The receiver shall record any judgment  of
27    dissolution entered in a dissolution proceeding and thereupon
28    turn  over  to the Director a certified copy of the judgment.
29    The receiver may cause all assets of the insureds and  escrow
30    depositors of the title insurance company to be registered in
31    the  name  of  the  receiver or in the name of the receiver's
32    nominee.
33        For its services in administering the escrows held by the
34    title insurance company during the period of winding  up  the
 
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 1    affairs  of  the  title  insurance  company,  the receiver is
 2    entitled to be reimbursed for all costs and expenses incurred
 3    by the receiver and shall also be entitled to receive out  of
 4    the  assets  of  the individual escrows being administered by
 5    the receiver during the period of winding up the  affairs  of
 6    the title insurance company and prior to the appointment of a
 7    successor escrowee the usual and customary fees charged by an
 8    escrowee  for  escrows  or  reasonable  fees  approved by the
 9    court.
10        The receiver, during its administration of the escrows of
11    the title insurance company during  the  winding  up  of  the
12    affairs of the title insurance company, shall have all of the
13    powers  that  are  vested  in  trustees  under  the terms and
14    provisions of the Trusts and Trustees Act.
15        Upon  the  appointment  of  a  successor  escrowee,   the
16    receiver  shall  deliver to the successor escrowee all of the
17    assets belonging to  each  individual  escrow  to  which  the
18    successor escrowee succeeds, and the receiver shall thereupon
19    be relieved of any further duties or obligations with respect
20    thereto.
21        (l)  The  receiver shall, upon approval by the court, pay
22    all claims against the assets of the title insurance  company
23    allowed  by  the  court  pursuant  to  subsection (i) of this
24    Section, as well as claims against the assets of insureds and
25    escrow  depositors  of  the  title   insurance   company   in
26    accordance with the following priority:
27             (1)  All  necessary  and  reasonable expenses of the
28        Director's possession and control and of its receivership
29        shall be paid from the  assets  of  the  title  insurance
30        company.
31             (2)  All   usual  and  customary  fees  charged  for
32        services in administering escrows shall be paid from  the
33        assets  of  the individual escrows being administered. If
34        the assets of the individual escrows  being  administered
 
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 1        are  insufficient, the fees shall be paid from the assets
 2        of the title insurance company.
 3             (3)  Secured claims, including claims for taxes  and
 4        debts  due  the federal or any state or local government,
 5        that are secured by liens perfected prior to the date  of
 6        filing  of  the  complaint for dissolution, shall be paid
 7        from the assets of the title insurance company.
 8             (4)  Claims   by    policyholders,    beneficiaries,
 9        insureds  and  escrow  depositors  of the title insurance
10        company shall be paid from the assets of the insureds and
11        escrow depositors. If there are  insufficient  assets  of
12        the  insureds and escrow depositors, claims shall be paid
13        from the assets of the title insurance company.
14             (5)  Any other claims  due  the  federal  government
15        shall  be  paid  from  the  assets of the title insurance
16        company.
17             (6)  Claims  for  wages   or   salaries,   excluding
18        vacation,   severance   and  sick  leave  pay  earned  by
19        employees for services rendered within 90 days  prior  to
20        the  date  of  filing  of  the complaint for dissolution,
21        shall be paid from the  assets  of  the  title  insurance
22        company.
23             (7)  All  other  claims  of  general  creditors  not
24        falling   within   any  priority  under  this  subsection
25        including claims for taxes and debts  due  any  state  or
26        local  government which are not secured claims and claims
27        for attorney's  fees  incurred  by  the  title  insurance
28        company  in contesting the dissolution shall be paid from
29        the assets of the title insurance company.
30             (8)  Proprietary claims asserted by an owner, member
31        or  stockholder  of  the  title  insurance   company   in
32        receivership  shall  be paid from the assets of the title
33        insurance company.
34        The receiver shall  pay  all  claims  of  equal  priority
 
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 1    according  to  the  schedule  set out in this subsection, and
 2    shall not pay claims  of  lower  priority  until  all  higher
 3    priority  claims  are  satisfied.  If insufficient assets are
 4    available to meet all claims of equal priority, those  assets
 5    shall  be  distributed  pro  rata  among  those  claims.  All
 6    unclaimed  assets  of  the  title  insurance company shall be
 7    deposited with the receiver to be paid out by him  when  such
 8    claims are submitted and allowed by the court.
 9        (m)  At the termination of the receiver's administration,
10    the  receiver  shall  petition  the  court for the entry of a
11    judgment of dissolution. After a hearing upon the  notice  as
12    the  court  may  prescribe, the court may enter a judgment of
13    dissolution whereupon the title insurance company's corporate
14    existence shall be terminated and the receivership concluded.
15        (n)  The receiver shall serve  at  the  pleasure  of  the
16    Director  and  upon the death, inability to act, resignation,
17    or removal by the Director of a receiver,  the  Director  may
18    appoint a successor, and upon the appointment, all rights and
19    duties  of  the  predecessor  shall  at once devolve upon the
20    appointee.

21        (215 ILCS 155/23) (from Ch. 73, par. 1423)
22        Sec. 23.  Violation; penalty.  Any violation  of  any  of
23    the  provisions of this Act shall constitute a petty business
24    offense and shall subject the party violating the same  to  a
25    penalty  of $1000 for each offense.  An action to enforce the
26    provisions of  this  Section  may  be  brought  only  by  the
27    Director.
28    (Source: P.A. 86-239.)

29        Section  99.   Effective  date.   This  Act  takes effect
30    January 1, 2002.

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