Senate Bill sb0638c1

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    Florida Senate - 2005                            CS for SB 638

    By the Committee on Banking and Insurance; and Senators Wise,
    Geller, King and Campbell




    597-1838-05

  1                      A bill to be entitled

  2         An act relating to title insurance; amending s.

  3         624.608, F.S.; redefining the term "title

  4         insurance" to include insurance for security

  5         interests in personal property; amending s.

  6         627.7711, F.S.; redefining the term "related

  7         title services" to include the examination of

  8         searches of certain records; redefining the

  9         term "primary title services" to include search

10         and examination of certain records; amending s.

11         627.7845, F.S.; prohibiting a title insurer

12         from issuing a title insurance commitment,

13         endorsement, or policy until there has been an

14         examination of certain records; requiring the

15         title insurer to preserve and retain evidence

16         of certain records; providing that certain

17         policy forms may continue to be sold by

18         property and casualty insurers until the Office

19         of Insurance Regulation approves a title

20         insurance form; providing an effective date.

21  

22  Be It Enacted by the Legislature of the State of Florida:

23  

24         Section 1.  Section 624.608, Florida Statutes, is

25  amended to read:

26         624.608  "Title insurance" defined.--"Title insurance"

27  is:

28         (1)  Insurance of owners of real property or others

29  having an interest in real property or contractual interest

30  derived therefrom, or liens or encumbrances on real property,

31  

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    Florida Senate - 2005                            CS for SB 638
    597-1838-05




 1  against loss by encumbrance, or defective titles, or

 2  invalidity, or adverse claim to title; or

 3         (2)  Insurance of owners and secured parties of the

 4  existence, attachment, perfection and priority of security

 5  interests in personal property under Article 9 of the Uniform

 6  Commercial Code.

 7         Section 2.  Paragraphs (a) and (b) of subsection (1) of

 8  section 627.7711, Florida Statutes, are amended to read:

 9         627.7711  Definitions.--As used in this part, the term:

10         (1)(a)  "Related title services" means services

11  performed by a title insurer or title insurance agent or

12  agency, in the agent's or agency's capacity as such,

13  including, but not limited to, preparing or obtaining a title

14  search, examining title, examining searches of the records of

15  a Uniform Commercial Code filing office and such other

16  information as may be necessary, preparing documents necessary

17  to close the transaction, conducting the closing, or handling

18  the disbursing of funds related to the closing in a real

19  estate closing transaction in which a title insurance

20  commitment or policy is to be issued. The premium, together

21  with the charge for related title services, constitutes the

22  regular title insurance premium.

23         (b)  "Primary title services" means determining

24  insurability in accordance with sound underwriting practices

25  based upon evaluation of a reasonable search and examination

26  of the title or the records of a Uniform Commercial Code

27  filing office and such other information as may be necessary,

28  determination and clearance of underwriting objections and

29  requirements to eliminate risk, preparation and issuance of a

30  title insurance commitment setting forth the requirements to

31  insure, and preparation and issuance of the policy.

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    Florida Senate - 2005                            CS for SB 638
    597-1838-05




 1         Section 3.  Subsections (1) and (2) of section

 2  627.7845, Florida Statutes, are amended to read:

 3         627.7845  Determination of insurability required;

 4  preservation of evidence of title search and examination.--

 5         (1)  A title insurer may not issue a title insurance

 6  commitment, endorsement, or title insurance policy until the

 7  title insurer has caused to be conducted a reasonable search

 8  and examination of the title or the records of a Uniform

 9  Commercial Code filing office, as applicable, and has examined

10  of such other information as may be necessary, and has caused

11  to be made a determination of insurability of title or the

12  existence, attachments, perfection, and priority of the

13  Uniform Commercial Code security interest, including

14  endorsement coverages, in accordance with sound underwriting

15  practices.

16         (2)  The title insurer shall cause the evidence of the

17  reasonable search and examination of the title or the records

18  of a Uniform Commercial Code filing office to be preserved and

19  retained in its files or in the files of its title insurance

20  agent or agency for a period of not less than 7 years after

21  the title insurance commitment, title insurance policy, or

22  guarantee of title was issued.  The title insurer or agent or

23  agency must produce the evidence required to be maintained by

24  this subsection at its offices upon the demand of the office.

25  Instead of retaining the original evidence, the title insurer

26  or the title insurance agent or agency may, in the regular

27  course of business, establish a system under which all or part

28  of the evidence is recorded, copied, or reproduced by any

29  photographic, photostatic, microfilm, microcard, miniature

30  photographic, or other process which accurately reproduces or

31  forms a durable medium for reproducing the original.

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    Florida Senate - 2005                            CS for SB 638
    597-1838-05




 1         Section 4.  On July 1, 2005, any policy form for

 2  insurance that qualifies as title insurance under section

 3  624.608(2), Florida Statutes, and for which a substantially

 4  similar policy form has been previously approved by the Office

 5  of Insurance Regulation as property and casualty insurance,

 6  may continue to be sold by that property and casualty insurer

 7  until the Office of Insurance Regulation approves the title

 8  insurance form provided for in section 624.608(2), Florida

 9  Statutes, and the commission approves a corresponding rule for

10  rates for the form, after which point the property and

11  casualty insurance form may no longer be sold.

12         Section 5.  This act shall take effect July 1, 2005.

13  

14          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
15                         Senate Bill 638

16                                 

17  The committee substitute defines "title insurance" in s.
    627.608, F.S., to include insurance of owners and secured
18  parties of the existence, attachment, perfection and priority
    of security interests in personal property under Article 9 of
19  the Uniform Commercial Code. The definition specifies that
    personal property title insurance can only be issued for
20  specified purposes under Article 9 of the UCC. The committee
    substitute authorizes the issuance of personal property title
21  insurance policies for UCC transactions under Article 9 of the
    Revised UCC.
22  
    The committee substitute requires that once the bill is
23  effective (July 1, 2005), any policy form for insurance that
    qualifies as title insurance under s. 624.608(2), F.S.--which
24  includes Article 9 UCC personal property title insurance
    within the definition of "title insurance"--that has been
25  previously approved by the Office of Insurance Regulation
    (OIR) as property and casualty insurance may continue to be
26  sold by that insurer until the OIR approves the title
    insurance form provided for in s. 624.608(2), F.S., and the
27  Financial Services Commission approves a corresponding rule
    for rates for the form. Once both requirements occur, the
28  property and casualty insurance form may no longer be sold.

29  

30  

31  

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