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92_SB0887ham001
LRB9205772JSpcam01
1 AMENDMENT TO SENATE BILL 887
2 AMENDMENT NO. . Amend Senate Bill 887 by replacing
3 everything after the enacting clause with the following:
4 "Section 5. The Title Insurance Act is amended by
5 changing Sections 4, 5, 6, 9, 11, 12, 13, 14, 16, 17, 21, 23,
6 and 25 and adding Sections 21.1, 21.2, and 21.3 as follows:
7 (215 ILCS 155/4) (from Ch. 73, par. 1404)
8 Sec. 4. Deposit and surety bonds.
9 (a) Before doing business in this State, a title
10 insurance company must deposit with the Department bonds of
11 the United States or this State with a then current value of
12 $100,000 plus $50,000 for each county, more than one, in
13 which the real estate, upon which its policies are issued, is
14 located, to a maximum amount of $750,000. A title insurance
15 company guaranteeing or insuring titles to real estate in
16 counties having 500,000 or more inhabitants must deposit with
17 the Department bonds of the United States or this State with
18 a then current value of $750,000. A title insurance company
19 that has deposited $750,000 in bonds with the Department is
20 entitled to guarantee or insure titles in any or all counties
21 of the State. All deposits shall be held for the benefit of
22 any insured under a policy the title insurance company issued
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1 or any named party to a written escrow the title insurance
2 company accepted. The deposit shall not be otherwise pledged
3 or subject to distribution among creditors or stockholders.
4 In addition, before doing business in this State, a title
5 insurance company must file with and have approved by the
6 Director a surety bond issued by a bonding company, in which
7 the company has no financial interest, that is authorized to
8 do business in this State and that has a rating of one of the
9 3 highest grades as determined by a national rating service.
10 The bond shall be in the principal sum of $350,000 and shall
11 run to the Director to pay any expenses incident to a
12 receivership or involuntary liquidation action pursuant to
13 Section 21.1 of this Act. Instead of a surety bond and upon
14 the title insurance company demonstrating good cause, the
15 Director may approve the deposit of bonds of the United
16 States or this State with a then current value of $350,000.
17 (b) The Director may provide for custody of the deposits
18 by any trust company or bank located in this State and
19 qualified to do business under the Corporate Fiduciary Act.
20 The compensation, if any, of the custodian shall be paid by
21 the depositing company. When the required deposits have been
22 made by a title insurance company, the Director shall certify
23 that the company has complied with the provisions of this
24 Section and is authorized to transact the business of
25 insuring and guaranteeing titles to real estate.
26 (c) If, at any time, a title insurance company causes
27 all of its unexpired policies, escrow deposits, and
28 reinsurance obligations in Illinois to be paid in full,
29 cancelled, discharged, reinsured, or otherwise assumed by
30 another title insurance company authorized to do business
31 under this Act, the Director shall, upon application of the
32 company, verified by the oath of its president or secretary,
33 and upon being satisfied by an examination of its books and
34 its officers under oath that all of its policies are paid in
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1 full, cancelled, discharged, reinsured, or otherwise assumed,
2 authorize the release of any deposit or surety bond posted
3 under this Section.
4 (d) The Director may revoke the certificate of a company
5 that fails to maintain the surety bond or deposit required by
6 this Section. The Director shall give notice of that
7 revocation to the company as provided by this Act, and during
8 the time of the revocation, the company may not conduct a
9 title insurance business. A revocation shall not be set
10 aside until a good and sufficient bond or deposit, or both,
11 has been filed with the Department and the company has
12 fulfilled all requirements of this Act.
13 (a) Every title insurance company licensed or qualified
14 to do business in this State shall, within 30 days after the
15 effective date of this Act or within 30 days after
16 incorporated or licensed to do business, whichever is later,
17 deposit with the Department, for the benefit of the creditors
18 of the company by reason of any policy issued by it, bonds of
19 the United States, this State or any body politic of this
20 State in amounts as specified in subsection (b). The bonds
21 and securities so deposited may be exchanged for other such
22 securities. No such bond or security shall be sold or
23 transferred by the Director except on order of the circuit
24 court or as provided in subsection (d). As long as the
25 company depositing such securities remains solvent, the
26 company shall be permitted to receive from the Director the
27 interest on such deposit.
28 (b) Every title insurance company shall deposit bonds or
29 securities in the sum of $50,000 plus $5,000 for each county,
30 more than one, in which the real estate, upon which such
31 policies are issued, is located, to maximum deposit of
32 $500,000. Every title insurance company guaranteeing or
33 insuring titles to real estate in counties having 500,000 or
34 more inhabitants shall deposit securities with the Department
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1 in the sum of $500,000. Any title insurance company having
2 deposited $500,000 in securities with the Department shall be
3 entitled to guarantee or insure titles in any or all counties
4 of the State.
5 (c) The Director may provide for custody of such
6 securities by any trust company or bank located in this State
7 and qualified to do business under the Corporate Fiduciary
8 Act, as now or hereafter amended. The compensation, if any,
9 of such custodian shall be paid by the depositing company.
10 When the required deposit has been made by a title insurance
11 company, the Director shall certify that it has complied with
12 the provisions of this Section and is authorized to transact
13 the business of insuring and guaranteeing titles to real
14 estate.
15 (d) If a title insurance company shall at any time cause
16 all of its unexpired policies to be paid, cancelled or
17 reinsured and all of its liabilities under such policies
18 thereby to be extinguished, or to be assumed by some surety
19 or other responsible company authorized to do business in
20 this State, the Director shall, on application of such
21 company, verified by the oath of its president or secretary
22 and on being satisfied by an examination of its books and its
23 officers under oath that all of its policies are so paid,
24 cancelled, extinguished or reinsured, deliver up to it such
25 securities.
26 (Source: P.A. 86-239.)
27 (215 ILCS 155/5) (from Ch. 73, par. 1405)
28 Sec. 5. Certificate of authority required. It is
29 unlawful shall not be lawful for any company to engage or to
30 continue in the business of guaranteeing or insuring titles
31 to real estate, without first procuring from the Director a
32 certificate of authority stating that the such a company has
33 complied with the requirements of Section 4 of this Act. If
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1 any company shall fail to maintain a deposit as required by
2 this Act, the Director may revoke the certificate of
3 authority granted on behalf of such company. The Director
4 shall mail a copy of that revocation to the company and
5 during the time of such revocation the company shall not
6 conduct such business. A revocation shall not be set aside
7 until a good and sufficient deposit shall have been made with
8 the Department, fulfilling all the requirements of this Act.
9 (Source: P.A. 86-239.)
10 (215 ILCS 155/6) (from Ch. 73, par. 1406)
11 Sec. 6. Reinsurance; primary liability.
12 (a) A title insurance company may obtain reinsurance for
13 all or any part of its liability under one or more of its
14 title insurance policies or reinsurance agreements and may
15 also reinsure title insurance policies issued by other title
16 insurance companies on risks located in this State or
17 elsewhere.
18 (b) A title insurance company licensed to do business in
19 this State shall retain at least $25,000 of primary liability
20 for policies it issues for the first 5 years after the date
21 of the policy, unless otherwise authorized by the Director.
22 (Source: P.A. 86-239.)
23 (215 ILCS 155/9) (from Ch. 73, par. 1409)
24 Sec. 9. Impairment of capital; discontinuance of
25 issuance of new policies; penalty.
26 (a) Whenever the capital of a any title insurance
27 company authorized to do business under this Act is shall be
28 determined by the circuit court, upon the application of the
29 Director, to be have become impaired to the extent of 25% of
30 the capital same, or to have otherwise become unsafe, it
31 shall be the duty of the Director may to cancel the authority
32 of the such company to do business.
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1 (b) The Director shall give notice as provided by this
2 Act to the such company to discontinue doing business issuing
3 new policies until its such capital has been made good.
4 (c) Any officer or management employee who continues to
5 do business issues a new policy of title insurance on behalf
6 of a such company after a such notice to discontinue doing
7 business, and before its until such capital has been made
8 good, may shall, for each offense, be subjected to a civil
9 penalty as provided by this Act forfeit a sum not exceeding
10 $1,000.
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
15 and maintain a statutory premium reserve computed in
16 accordance with this Section. The reserve shall be reported
17 as a liability of the title insurance company in its
18 financial statements. The statutory premium reserve shall be
19 maintained by the title insurance company for the protection
20 of holders of title insurance policies. Except as provided
21 in this Section, assets equal in value to the statutory
22 premium reserve are not subject to distribution among
23 creditors or stockholders of the title insurance company
24 until all claims of policyholders or claims under
25 reinsurance contracts have been paid in full, and all
26 liability on the policies or reinsurance contracts has been
27 paid in full and discharged, or lawfully reinsured, or
28 otherwise assumed by another title insurance company
29 authorized to do business under this Act.
30 (b) A foreign or alien title insurance company
31 authorized to do business under this Act shall maintain at
32 least the same reserves on title insurance policies issued on
33 properties located in this State as are required of domestic
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1 title insurance companies.
2 (c) The statutory premium reserve shall consist of:
3 (1) the amount of the statutory premium reserve on
4 January 1, 1990; and
5 (2) a sum equal to 12 1/2 cents for each $1,000 of
6 net retained liability under each title insurance policy
7 on a single risk written on properties located in this
8 State after January 1, 1990.
9 (d) Amounts placed in the statutory premium reserve in
10 any year in accordance with this Section shall be deducted in
11 determining the net profit of the title insurance company for
12 that year.
13 (e) A title insurance company shall release from the
14 statutory premium reserve a sum equal to 10% of the amount
15 added to the reserve during a calendar year on July 1 of each
16 of the 5 years following the year in which the sum was added,
17 and shall release from the statutory premium reserve a sum
18 equal to 3 1/3% of the amount added to the reserve during
19 that year on each succeeding July 1 until the entire amount
20 for that year has been released. The amount of the statutory
21 premium reserve or similar premium reserve maintained before
22 January 1, 1990, shall be released in accordance with the law
23 in effect before January 1, 1990.
24 (Source: P.A. 86-239; 87-1151.)
25 (215 ILCS 155/12) (from Ch. 73, par. 1412)
26 Sec. 12. Examination; audit.
27 (a) The Director or the Director's his authorized
28 representative shall have the power, and authority, and it
29 shall be his duty, to cause to be visited and examined
30 annually any title insurance company doing business under
31 this Act, and to verify and compel a compliance with the
32 provisions of law governing the title insurance company it as
33 he may by law exercise in relation to trust companies.
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1 (b) The Director or the Director's his authorized
2 representative agent shall have power and authority to compel
3 compliance with the provisions of this Act and shall, only
4 upon the showing of good cause, require any title insurance
5 company to make reasonable efforts to obtain the appropriate
6 records of its registered agents and make them available for
7 audit at a time and place designated by the Director.
8 Expenses incurred in the course of such audits will be the
9 responsibility of the title insurance company. If a present
10 or former registered agent or its successor refuses or is
11 unable to cooperate in furnishing the records requested by
12 the Director or the Director's authorized representative,
13 then the Director or the Director's authorized representative
14 shall have the power and authority to obtain those records
15 directly from such agent.
16 (Source: P.A. 86-239.)
17 (215 ILCS 155/13) (from Ch. 73, par. 1413)
18 Sec. 13. Annual statement.
19 (a) A Each title insurance company shall file with the
20 Department during the month of March of each year, a
21 statement under oath, of the condition of such company on the
22 thirty-first day of December next preceding disclosing the
23 assets, liabilities, earnings and expenses of the company.
24 The report shall be in such form and shall contain such
25 additional statements and information as to the affairs,
26 business, and conditions of the company as the Director may
27 from time to time prescribe or require.
28 (b) By June 1 of each year, a title insurance company
29 must file with the Department a copy of its audited financial
30 statements.
31 (Source: P.A. 86-239.)
32 (215 ILCS 155/14) (from Ch. 73, par. 1414)
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1 Sec. 14. Fees.
2 (a) A Every title insurance company and an every
3 independent escrowee subject to this Act shall pay the
4 following fees:
5 (1) for filing the original application for a
6 certificate of authority and receiving the deposit
7 required under this Act, $500;
8 (2) for the certificate of authority, $10;
9 (3) for every copy of a paper filed in the
10 Department under this Act, $1 per folio;
11 (4) for affixing the seal of the Department and
12 certifying a copy, $2;
13 (5) for filing the annual statement, $50; and.
14 (6) for each examination $500 per examiner per day
15 or part of a day and actual travel costs incurred.
16 (b) By April 1 of each year, a Each title insurance
17 company shall pay, for all of its title insurance agents
18 subject to this Act an annual registration fee of for filing
19 an annual registration of its agents, an amount equal to
20 $1.00 for each policy issued by it and all of its agents in
21 this State in the immediately preceding calendar year,
22 provided such sum shall not exceed $20,000 per annum.
23 (c) By April 1 of each year, a title insurance company
24 shall remit an amount equal to $1.25 for each policy issued
25 by it and its agents in the immediately preceding calendar
26 year, which shall be collected and disclosed as a per policy
27 remittance fee upon the issuance of any policy.
28 (d) The Director shall review the annual license fee on
29 an annual basis and adjust the fee no more than 5% annually
30 to meet the estimated administrative and operational expenses
31 for the upcoming fiscal year incidental to administering this
32 Act. By November 1 of each year, the Director shall provide
33 written notice to each title insurance company of any
34 adjustment made in the annual license fee.
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1 (Source: P.A. 86-239.)
2 (215 ILCS 155/16) (from Ch. 73, par. 1416)
3 Sec. 16. Title insurance agents.
4 (a) No person, firm, partnership, association,
5 corporation or other legal entity shall act as or hold itself
6 out to be a title insurance agent unless duly registered by a
7 title insurance company with the Director. The Director may
8 impose a civil penalty as provided by this Act for each
9 violation of this registration requirement.
10 (b) Each application for registration shall be made on a
11 form specified by the Director and prepared in duplicate by
12 each title insurance company which the agent represents. The
13 title insurance company shall retain the copy of the
14 application and forward the original to the Director with the
15 appropriate fee.
16 (c) Every applicant for registration, except a firm,
17 partnership, association or corporation, must be 18 years or
18 more of age.
19 (d) Registration shall be made annually by a filing with
20 the Director; supplemental registrations for new title
21 insurance agents to be added between annual filings shall be
22 made from time to time in the manner provided by the
23 Director; registrations shall remain in effect unless revoked
24 or suspended by the Director or are voluntarily withdrawn by
25 the registrant or the title insurance company.
26 (Source: P.A. 86-239.)
27 (215 ILCS 155/17) (from Ch. 73, par. 1417)
28 Sec. 17. Independent escrowees.
29 (a) Every independent escrowee shall be subject to the
30 same certification and deposit requirements to which title
31 insurance companies are subject under Section 4 of this Act.
32 (b) No person, firm, corporation or other legal entity
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1 shall hold itself out to be an independent escrowee unless it
2 has been issued a certificate of authority by the Director.
3 (c) Every applicant for a certificate of authority,
4 except a firm, partnership, association or corporation, must
5 be 18 years or more of age.
6 (d) Every certificate of authority shall remain in
7 effect one year unless revoked or suspended by the Director
8 or voluntarily surrendered by the holder.
9 (e) An independent escrowee may engage in the escrow,
10 settlement, or closing business, or any combination of such
11 business, and operate as an escrow, settlement, or closing
12 agent, provided that:
13 (1) Funds deposited in connection with any escrow,
14 settlement, or closing shall be deposited in a separate
15 fiduciary trust account or accounts in a bank or other
16 financial institution insured by an agency of the federal
17 government unless the instructions provide otherwise.
18 Such funds shall be the property of the person or persons
19 entitled thereto under the provisions of the escrow,
20 settlement, or closing and shall be segregated by escrow,
21 settlement or closing in the records of the independent
22 escrowee. Such funds shall not be subject to any debts
23 of the escrowee and shall be used only in accordance with
24 the terms of the individual escrow, settlement or closing
25 under which the funds were accepted.
26 (2) Interest received on funds deposited with the
27 independent escrowee in connection with any escrow,
28 settlement or closing shall be paid to the depositing
29 party unless the instructions provide otherwise.
30 (3) The independent escrowee shall maintain
31 separate records of all receipt and disbursement of
32 escrow, settlement or closing funds.
33 (4) The independent escrowee shall comply with any
34 rules or regulations promulgated by the Director
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1 pertaining to escrow, settlement or closing transactions.
2 (f) The Director or the Director's his authorized
3 representative shall have the power and authority to visit
4 and examine at any time any independent escrowee certified
5 under this Act and to compel compliance with the provisions
6 of this Act.
7 (g) A title insurance company or title insurance agent,
8 not qualified as an independent escrowee, may act in the
9 capacity of an escrow agent when it is supplying an abstract
10 of title, grantor-grantee search, tract search, lien search,
11 tax assessment search, or other limited purpose search to the
12 parties to the transaction even if it is not issuing a title
13 insurance commitment or title insurance policy. A title
14 insurance agent may act as an escrow agent only when
15 specifically authorized in writing on forms prescribed by the
16 Director by a title insurance company that has duly
17 registered the agent with the Director and only when notice
18 of the authorization is provided to and receipt thereof is
19 acknowledged by the Director. The authority granted to a
20 title insurance agent may be limited or revoked at any time
21 by the title insurance company. When a title insurance agent
22 has been authorized by more than one title insurance company
23 to act under this subsection and when that title insurance
24 agent is unable to pay a claim or loss arising from such
25 business, then the balance of liability and expense shall
26 become the shared liability of each title insurance company
27 in the proportion of title insurance premiums written by the
28 title insurance agent for each of them in the twelve months
29 prior to the act or omission causing the liability.
30 (h) The Director may impose a civil penalty as provided
31 by this Act for each violation of the requirements of this
32 Section.
33 (Source: P.A. 91-159, eff. 1-1-00.)
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1 (215 ILCS 155/21) (from Ch. 73, par. 1421)
2 Sec. 21. Regulatory action.
3 (a) The Director may refuse to grant, and may suspend or
4 revoke, any certificate of authority, registration or license
5 issued pursuant to this Act and may impose a civil penalty
6 upon any registrant or licensee as provided by this Act if he
7 determines that the holder of or applicant for such
8 certificate, registration or license:
9 (1) has intentionally made a material misstatement
10 or fraudulent misrepresentation in relation to a matter
11 covered by this Act;
12 (2) has misappropriated or tortiously converted to
13 its own use, or illegally withheld, monies held in a
14 fiduciary capacity;
15 (3) has demonstrated gross untrustworthiness or
16 incompetency in transacting the business of guaranteeing
17 titles to real estate in such a manner as to endanger the
18 public; or
19 (4) has materially misrepresented the terms or
20 conditions of contracts or agreements to which it is a
21 party;
22 (4) (5) has paid any commissions, discounts or any
23 part of its premiums, fees or other charges to any person
24 in violation of any State or federal law or regulations
25 or opinion letters issued under the federal Real Estate
26 Settlement Procedures Act of 1974.; or
27 (6) has failed to comply with the deposit and
28 reserve requirements of this Act or any other
29 requirements of this Act.
30 (b) In every case where a registration or certificate is
31 suspended or revoked, or an application for a registration or
32 certificate or renewal thereof is refused, or when a civil
33 penalty is imposed, the Director shall serve notice of the
34 his action, including a statement of the reasons for the his
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1 action, as provided by this Act. either personally or by
2 registered or certified mail. Service by mail shall be
3 deemed completed if such notice is deposited in the post
4 office, postage paid, addressed to the last known address
5 specified in the application for the certificate or
6 registration of such holder or registrant.
7 (c) In the case of a refusal to issue or renew a
8 certificate or accept a registration, the applicant or
9 registrant may request in writing, within 30 days after the
10 date of service, a hearing. In the case of a refusal to
11 renew, the expiring registration or certificate shall be
12 deemed to continue in force until 30 days after the service
13 of the notice of refusal to renew, or if a hearing is
14 requested during that period, until a final order is entered
15 pursuant to such hearing.
16 (d) The suspension or revocation of a registration or
17 certificate shall take effect upon service of notice thereof.
18 The holder of any such suspended registration or certificate
19 may request in writing, within 30 days of such service, a
20 hearing.
21 (e) In cases of suspension or revocation of registration
22 pursuant to subsection (a), the Director may, in the public
23 interest, issue an order of suspension or revocation which
24 shall take effect upon service of notification thereof. Such
25 order shall become final 60 days from the date of service
26 unless the registrant requests in writing, within such 60
27 days, a formal hearing thereon. In the event a hearing is
28 requested, the order shall remain temporary until a final
29 order is entered pursuant to such hearing.
30 (f) Hearing shall be held at such time and place as may
31 be designated by the Director either in the City of
32 Springfield, the City of Chicago, or in the county in which
33 the principal business office of the affected registrant or
34 certificate holder is located.
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1 (g) The suspension or revocation of a registration or
2 certificate or the refusal to issue or renew a registration
3 or certificate shall not in any way limit or terminate the
4 responsibilities of any registrant or certificate holder
5 arising under any policy or contract of title insurance to
6 which it is a party. No new contract or policy of title
7 insurance may be issued, nor may any existing policy or
8 contract to title insurance be renewed by any registrant or
9 certificate holder during any period of suspension or
10 revocation of a registration or certificate.
11 (h) The Director may issue a cease and desist order to a
12 title insurance company, agent, or other entity doing
13 business without the required license or registration, when
14 in the opinion of the Director, the company, agent, or other
15 entity is violating or is about to violate any provision of
16 this Act or any law or of any rule or condition imposed in
17 writing by the Department.
18 The Director may issue the cease and desist order without
19 notice and before a hearing.
20 The Director shall have the authority to prescribe rules
21 for the administration of this Section.
22 If it is determined that the Director had the authority
23 to issue the cease and desist order, he may issue such orders
24 as may be reasonably necessary to correct, eliminate or
25 remedy such conduct.
26 Any person or company subject to an order pursuant to
27 this Section is entitled to judicial review of the order in
28 accordance with the provisions of the Administrative Review
29 Law.
30 The powers vested in the Director by this Section are
31 additional to any and all other powers and remedies vested in
32 the Director by law, and nothing in this Section shall be
33 construed as requiring that the Director shall employ the
34 powers conferred in this Section instead of or as a condition
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1 precedent to the exercise of any other power or remedy vested
2 in the Director.
3 (Source: P.A. 89-601, eff. 8-2-96.)
4 (215 ILCS 155/21.1 new)
5 Sec. 21.1. Receiver and involuntary liquidation.
6 (a) The proceedings under this Section shall be the
7 exclusive remedy and the only proceedings commenced in any
8 court for the dissolution of, the winding up of the affairs
9 of, or the appointment of a receiver for a title insurance
10 company.
11 (b) If the Director, with respect to a title insurance
12 company, finds that (1) its capital is impaired or it is
13 otherwise in an unsound condition, (2) its business is being
14 conducted in an unlawful, fraudulent, or unsafe manner, (3)
15 it is unable to continue operations, or (4) its examination
16 has been obstructed or impeded, the Director may give notice
17 to the board of directors of the title insurance company of
18 the finding or findings. If the Director's finding is not
19 corrected within 60 days after the company receives the
20 notice, the Director shall take possession and control of the
21 title insurance company, its assets, and assets held by it
22 for any person for the purpose of examination,
23 reorganization, or liquidation through receivership.
24 If, in addition to making a finding as provided in item
25 (1), (2), (3), or (4), the Director is of the opinion and
26 finds that an emergency that may result in serious losses to
27 any person exists, the Director may, without having given the
28 notice provided for in this subsection, and whether or not
29 proceedings under subsection (a) of this Section have been
30 instituted or are then pending, take possession and control
31 of the title insurance company and its assets for the purpose
32 of examination, reorganization, or liquidation through
33 receivership.
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1 (c) The Director may take possession and control of a
2 title insurance company, its assets, and assets held by it
3 for any person by posting upon the premises of each office at
4 which it transacts its business as a title insurance company
5 a notice reciting that the Director is assuming possession
6 pursuant to this Act and the time when the possession shall
7 be deemed to commence.
8 (d) Promptly after taking possession and control of a
9 title insurance company the Director, represented by the
10 Attorney General, shall file a copy of the notice posted upon
11 the premises in the Circuit Court of either Cook County or
12 Sangamon County, Illinois, which cause shall be entered as a
13 court action upon the dockets of the court under the name and
14 style of "In the matter of the possession and control by the
15 Director of the Department of Financial Institutions of
16 (insert the name of the title insurance company)". If the
17 Director determines that no practical possibility exists to
18 reorganize the title insurance company after reasonable
19 efforts have been made, the Director, represented by the
20 Attorney General, shall also file a complaint, if it has not
21 already been done, for the appointment of a receiver or such
22 other proceeding as is appropriate under the circumstances.
23 The court where the cause is docketed shall be vested with
24 the exclusive jurisdiction to hear and determine all issues
25 and matters pertaining to or connected with the Director's
26 possession and control of the title insurance company as
27 provided in this Act, and any further issues and matters
28 pertaining to or connected with the Director's possession and
29 control that may be submitted to the court for its
30 adjudication.
31 The Director, upon taking possession and control of a
32 title insurance company, may, and if not previously done,
33 shall immediately upon filing a complaint for dissolution,
34 make an examination of the affairs of the title insurance
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1 company or appoint a suitable person to make the examination
2 as the Director's agent. The examination shall be conducted
3 in accordance with and pursuant to the authority granted
4 under Section 12 of this Act. The person conducting the
5 examination shall have and may exercise on behalf of the
6 Director all of the powers and authority granted to the
7 Director under Section 12. A copy of the report shall be
8 filed in any dissolution proceeding filed by the Director.
9 The reasonable fees and necessary expenses of the examining
10 person, as approved by the Director or as recommended by the
11 Director and approved by the court if a dissolution
12 proceeding has been filed, shall be borne by the subject
13 title insurance company and shall have the same priority for
14 payment as the reasonable and necessary expenses of the
15 Director in conducting an examination. The person appointed
16 to make the examination shall make a proper accounting, in
17 the manner and scope as determined by the Director to be
18 practical and advisable under the circumstances, on behalf of
19 the title insurance company and no guardian ad litem need be
20 appointed to review the accounting.
21 (e) The Director, upon taking possession and control of
22 a title insurance company and its assets, shall be vested
23 with the full powers of management and control including, but
24 not limited to, the following:
25 (1) the power to continue or to discontinue the
26 business;
27 (2) the power to stop or to limit the payment of
28 its obligations;
29 (3) the power to collect and to use its assets and
30 to give valid receipts and acquittances therefor;
31 (4) the power to transfer title and liquidate any
32 bond or deposit made under Section 4 of this Act;
33 (5) the power to employ and to pay any necessary
34 assistants;
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1 (6) the power to execute any instrument in the name
2 of the title insurance company;
3 (7) the power to commence, defend, and conduct in
4 its name any action or proceeding in which it may be a
5 party;
6 (8) the power, upon the order of the court, to sell
7 and convey its assets, in whole or in part, and to sell
8 or compound bad or doubtful debts upon such terms and
9 conditions as may be fixed in that order;
10 (9) the power, upon the order of the court, to make
11 and to carry out agreements with other title insurance
12 companies, financial institutions, or with the United
13 States or any agency of the United States for the payment
14 or assumption of the title insurance company's
15 liabilities, in whole or in part, and to transfer assets
16 and to make guaranties, in whole or in part, in
17 connection therewith;
18 (10) the power, upon the order of the court, to
19 borrow money in the name of the title insurance company
20 and to pledge its assets as security for the loan;
21 (11) the power to terminate his or her possession
22 and control by restoring the title insurance company to
23 its board of directors;
24 (12) the power to appoint a receiver which may be
25 the Office of the Director of the Department of Financial
26 Institutions, another title insurance company, or another
27 suitable person and to order liquidation of the title
28 insurance company as provided in this Act; and
29 (13) the power, upon the order of the court and
30 without the appointment of a receiver, to determine that
31 the title insurance company has been closed for the
32 purpose of liquidation without adequate provision being
33 made for payment of its obligations, and thereupon the
34 title insurance company shall be deemed to have been
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1 closed on account of inability to meet its obligations to
2 its insureds or escrow depositors.
3 (f) Upon taking possession, the Director shall make an
4 examination of the condition of the title insurance company,
5 an inventory of the assets and, unless the time shall be
6 extended by order of the court or unless the Director shall
7 have otherwise settled the affairs of the title insurance
8 company pursuant to the provisions of this Act, within 90
9 days after the time of taking possession and control of the
10 title insurance company, the Director shall either terminate
11 his possession and control by restoring the title insurance
12 company to its board of directors or appoint a receiver which
13 may be the Office of the Director of the Department of
14 Financial Institutions, another title insurance company, or
15 another suitable person and order the liquidation of the
16 title insurance company as provided in this Act. All
17 necessary and reasonable expenses of the Director's
18 possession and control shall be a priority claim and shall be
19 borne by the title insurance company and may be paid by the
20 Director from the title insurance company's own assets as
21 distinguished from assets held for any other person.
22 (g) If the Director takes possession and control of a
23 title insurance company and its assets, any period of
24 limitation fixed by a statute or agreement that would
25 otherwise expire on a claim or right of action of the title
26 insurance company, on its own behalf or on behalf of its
27 insureds or escrow depositors, or upon which an appeal must
28 be taken or a pleading or other document must be filed by the
29 title insurance company in any pending action or proceeding
30 shall be tolled until 6 months after the commencement of the
31 possession, and no judgment, lien, levy, attachment, or other
32 similar legal process must be enforced upon or satisfied, in
33 whole or in part, from any asset of the title insurance
34 company or from any asset of an insured or escrow depositor
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1 while it is in the possession of the Director.
2 (h) If the Director appoints a receiver to take
3 possession and control of the assets of insureds or escrow
4 depositors for the purpose of holding those assets as
5 fiduciary for the benefit of the insureds or escrow
6 depositors pending the winding up of the affairs of the title
7 insurance company being liquidated and the appointment of a
8 successor escrowee for those assets, any period of limitation
9 fixed by statute, rule of court, or agreement that would
10 otherwise expire on a claim or right of action in favor of or
11 against the insureds or escrow depositors of those assets or
12 upon which an appeal must be taken or a pleading or other
13 document must be filed by a title insurance company on
14 behalf of an insured or escrow depositor in any pending
15 action or proceeding shall be tolled for a period of 6 months
16 after the appointment of a receiver, and no judgment, lien,
17 levy, attachment, or other similar legal process shall be
18 enforced upon or satisfied, in whole or in part, from any
19 asset of the insured or escrow depositor while it is in the
20 possession of the receiver.
21 (i) If the Director determines at any time that no
22 reasonable possibility exists for the title insurance company
23 to be operated by its board of directors in accordance with
24 the provisions of this Act after reasonable efforts have been
25 made and that it should be liquidated through receivership,
26 the Director shall appoint a receiver. The Director may
27 require of the receiver such bond and security as the
28 Director deems proper. The Director, represented by the
29 Attorney General, shall file a complaint for the dissolution
30 or winding up of the affairs of the title insurance company
31 in a court of the county in which the principal office of the
32 title insurance company is located and shall cause notice to
33 be given in a newspaper of general circulation once each week
34 for 4 consecutive weeks so that persons who may have claims
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1 against the title insurance company may present them to the
2 receiver and make legal proof thereof and notifying those
3 persons and all to whom it may concern of the filing of a
4 complaint for the dissolution or winding up of the affairs of
5 the title insurance company and stating the name and location
6 of the court. All persons who may have claims against the
7 assets of the title insurance company, as distinguished from
8 the assets of insureds and escrow depositors held by the
9 title insurance company, and the receiver to whom those
10 persons have presented their claims may present them to the
11 clerk of the court, and the allowance or disallowance of the
12 claims by the court in connection with the proceedings shall
13 be deemed an adjudication in a court of competent
14 jurisdiction. The receiver shall file with the court a
15 correct list of all creditors of the title insurance company
16 as shown by its books, who have not presented their claims
17 and the amount of their respective claims after allowing
18 adjusted credit, deductions, and set-offs as shown by the
19 books of the title insurance company. The claims so filed
20 shall be deemed proven unless objections are filed thereto by
21 a party or parties interested therein within the time fixed
22 by the court.
23 (j) The receiver for a title insurance company has the
24 power and authority and is charged with the duties and
25 responsibilities as follows:
26 (1) To take possession of and, for the purpose of
27 the receivership, title to the books, records, and assets
28 of every description of the title insurance company.
29 (2) To proceed to collect all debts, dues, and
30 claims belonging to the title insurance company.
31 (3) To sell and compound all bad and doubtful debts
32 on such terms as the court shall direct.
33 (4) To sell the real and personal property of the
34 title insurance company, as distinguished from the real
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1 and personal property of the insureds or escrow
2 depositors, on such terms as the court shall direct.
3 (5) To file with the Director a copy of each report
4 which he or she makes to the court, together with such
5 other reports and records as the Director may require.
6 (6) To sue and defend in his or her own name and
7 with respect to the affairs, assets, claims, debts, and
8 choses in action of the title insurance company.
9 (7) To surrender to the insureds and escrow
10 depositors of the title insurance company, when requested
11 in writing directed to the receiver by them, the escrowed
12 funds (on a pro rata basis), and escrowed documents in
13 the receiver's possession upon satisfactory proof of
14 ownership and determination by the receiver of available
15 escrow funds.
16 (8) To redeem or take down collateral hypothecated
17 by the title insurance company to secure its notes and
18 other evidence of indebtedness whenever the court deems
19 it to be in the best interest of the creditors of the
20 title insurance company and directs the receiver so to
21 do.
22 (k) Whenever the receiver finds it necessary in his or
23 her opinion to use and employ money of the title insurance
24 company in order to protect fully and benefit the title
25 insurance company by the purchase or redemption of any
26 property, real or personal, in which the title insurance
27 company may have any rights by reason of any bond, mortgage,
28 assignment, or other claim thereto, the receiver may certify
29 the facts together with the receiver's opinions as to the
30 value of the property involved, and the value of the equity
31 the title insurance company may have in the property to the
32 court, together with a request for the right and authority to
33 use and employ so much of the money of the title insurance
34 company as may be necessary to purchase the property, or to
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1 redeem the property from a sale if there was a sale, and if
2 the request is granted, the receiver may use so much of the
3 money of the title insurance company as the court may have
4 authorized to purchase the property at the sale.
5 The receiver shall deposit daily all moneys collected in
6 any State or national bank approved by the court. The
7 deposits shall be made in the name of the Director, in trust
8 for the receiver, and be subject to withdrawal upon the
9 receiver's order or upon the order of those persons the
10 Director may designate. The moneys may be deposited without
11 interest, unless otherwise agreed. The receiver shall do the
12 things and take the steps from time to time under the
13 direction and approval of the court that may reasonably
14 appear to be necessary to conserve the title insurance
15 company's assets and secure the best interests of the
16 creditors, insureds, and escrow depositors of the title
17 insurance company. The receiver shall record any judgment of
18 dissolution entered in a dissolution proceeding and thereupon
19 turn over to the Director a certified copy of the judgment.
20 The receiver may cause all assets of the insureds and escrow
21 depositors of the title insurance company to be registered in
22 the name of the receiver or in the name of the receiver's
23 nominee.
24 For its services in administering the escrows held by the
25 title insurance company during the period of winding up the
26 affairs of the title insurance company, the receiver is
27 entitled to be reimbursed for all costs and expenses incurred
28 by the receiver and shall also be entitled to receive out of
29 the assets of the individual escrows being administered by
30 the receiver during the period of winding up the affairs of
31 the title insurance company and prior to the appointment of a
32 successor escrowee the usual and customary fees charged by an
33 escrowee for escrows or reasonable fees approved by the
34 court.
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1 The receiver, during its administration of the escrows of
2 the title insurance company during the winding up of the
3 affairs of the title insurance company, shall have all of the
4 powers that are vested in trustees under the terms and
5 provisions of the Trusts and Trustees Act.
6 Upon the appointment of a successor escrowee, the
7 receiver shall deliver to the successor escrowee all of the
8 assets belonging to each individual escrow to which the
9 successor escrowee succeeds, and the receiver shall thereupon
10 be relieved of any further duties or obligations with respect
11 thereto.
12 (l) The receiver shall, upon approval by the court, pay
13 all claims against the assets of the title insurance company
14 allowed by the court pursuant to subsection (i) of this
15 Section, as well as claims against the assets of insureds and
16 escrow depositors of the title insurance company in
17 accordance with the following priority:
18 (1) All necessary and reasonable expenses of the
19 Director's possession and control and of its receivership
20 shall be paid from the assets of the title insurance
21 company.
22 (2) All usual and customary fees charged for
23 services in administering escrows shall be paid from the
24 assets of the individual escrows being administered. If
25 the assets of the individual escrows being administered
26 are insufficient, the fees shall be paid from the assets
27 of the title insurance company.
28 (3) Secured claims, including claims for taxes and
29 debts due the federal or any state or local government,
30 that are secured by liens perfected prior to the date of
31 filing of the complaint for dissolution, shall be paid
32 from the assets of the title insurance company.
33 (4) Claims by policyholders, beneficiaries,
34 insureds and escrow depositors of the title insurance
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1 company shall be paid from the assets of the insureds and
2 escrow depositors. If there are insufficient assets of
3 the insureds and escrow depositors, claims shall be paid
4 from the assets of the title insurance company.
5 (5) Any other claims due the federal government
6 shall be paid from the assets of the title insurance
7 company.
8 (6) Claims for wages or salaries, excluding
9 vacation, severance and sick leave pay earned by
10 employees for services rendered within 90 days prior to
11 the date of filing of the complaint for dissolution,
12 shall be paid from the assets of the title insurance
13 company.
14 (7) All other claims of general creditors not
15 falling within any priority under this subsection
16 including claims for taxes and debts due any state or
17 local government which are not secured claims and claims
18 for attorney's fees incurred by the title insurance
19 company in contesting the dissolution shall be paid from
20 the assets of the title insurance company.
21 (8) Proprietary claims asserted by an owner, member
22 or stockholder of the title insurance company in
23 receivership shall be paid from the assets of the title
24 insurance company.
25 The receiver shall pay all claims of equal priority
26 according to the schedule set out in this subsection, and
27 shall not pay claims of lower priority until all higher
28 priority claims are satisfied. If insufficient assets are
29 available to meet all claims of equal priority, those assets
30 shall be distributed pro rata among those claims. All
31 unclaimed assets of the title insurance company shall be
32 deposited with the receiver to be paid out by him when such
33 claims are submitted and allowed by the court.
34 (m) At the termination of the receiver's administration,
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1 the receiver shall petition the court for the entry of a
2 judgment of dissolution. After a hearing upon the notice as
3 the court may prescribe, the court may enter a judgment of
4 dissolution whereupon the title insurance company's corporate
5 existence shall be terminated and the receivership concluded.
6 (n) The receiver shall serve at the pleasure of the
7 Director and upon the death, inability to act, resignation,
8 or removal by the Director of a receiver, the Director may
9 appoint a successor, and upon the appointment, all rights and
10 duties of the predecessor shall at once devolve upon the
11 appointee.
12 (215 ILCS 155/21.2 new)
13 Sec. 21.2. Notice.
14 (a) Notice of any action to be given to title insurance
15 companies by the Director under this Act or rules or orders
16 promulgated under it shall be made either personally or by
17 U.S. mail and by sending a copy of the notice by telephone
18 facsimile or electronic mail, if known and operating. Service
19 by mail shall be deemed completed if the notice is deposited
20 in the U.S. Mail, postage paid, addressed to the last known
21 address specified in the application for the certificate of
22 authority to do business or certificate of registration of
23 the holder or registrant.
24 (b) The Director shall notify all registered agents of a
25 title insurance company by regular mail when that title
26 insurance company's certificate of authority is suspended or
27 revoked.
28 (215 ILCS 155/21.3 new)
29 Sec. 21.3. Record retention. Evidence of the examination
30 of title, if any, and determination of insurability for
31 business written by a title insurance company or its title
32 insurance agent and records relating to escrow, closings, and
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1 security deposits shall be preserved and retained by the
2 title insurance company or its title insurance agent for as
3 long as appropriate to the circumstances, but in no event
4 less than 5 years after the title insurance policy has been
5 issued or the escrow, closing, or security deposit account
6 has been closed.
7 (215 ILCS 155/23) (from Ch. 73, par. 1423)
8 Sec. 23. Violation; penalty.
9 (a) If the Director determines that a title insurance
10 company or any other person has violated this Act, or any
11 rule or order promulgated under this Act, the Director may
12 order:
13 (1) a civil penalty not exceeding $10,000 for each
14 violation of Section 9 or each determination under
15 Section 21 and not exceeding $1,000 for any other
16 violation; or
17 (2) revocation or suspension of the title insurance
18 company's or independent escrowee's certificate of
19 authority or title agent's registration.
20 (b) Any intentional violation of any of the provisions
21 of this Act shall constitute a petty offense.
22 (c) Nothing contained in this Section shall affect the
23 authority of the Director to revoke or suspend a title
24 insurance company's or independent escrowee's certificate of
25 authority or a title insurance agent's registration under any
26 other Section of this Act. Any violation of any of the
27 provisions of this Act shall constitute a business offense
28 and shall subject the party violating the same to a penalty
29 of $1000 for each offense.
30 (Source: P.A. 86-239.)
31 (215 ILCS 155/25) (from Ch. 73, par. 1425)
32 Sec. 25. Damages. (a) Any person or persons who violate
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1 the prohibitions or limitations of subsection (a) of Section
2 21 of this Act shall be liable to the person or persons
3 charged for the settlement service involved in the violation
4 for actual damages and costs.
5 (b) Any title insurance company or a title insurance
6 agent who violates the prohibitions or limitations of
7 subsection (a) of Section 21 of this Act shall be subject to
8 injunctive relief. If a permanent injunction is granted, the
9 court may award actual damages. Reasonable attorney's fees
10 and costs may be awarded to the prevailing party.
11 (Source: P.A. 86-239.)
12 Section 99. Effective date. This Act takes effect
13 January 1, 2002.".