| 1 | A bill to be entitled |
| 2 | An act relating to title insurance; amending s. 626.84201, |
| 3 | F.S.; providing additional requirements for nonresident |
| 4 | title insurance agent licensure; amending s. 626.9541, |
| 5 | F.S.; revising unlawful rebate specifications; amending s. |
| 6 | 627.7711, F.S.; revising definitions; amending s. 627.780, |
| 7 | F.S.; providing an exception to a prohibition against |
| 8 | dealing in certain premium; amending ss. 627.782 and |
| 9 | 627.783, F.S.; revising rate and rate deviation |
| 10 | requirements; amending s. 627.7845, F.S.; revising |
| 11 | determination of insurability and records retention |
| 12 | requirements; providing an effective date. |
| 13 |
|
| 14 | Be It Enacted by the Legislature of the State of Florida: |
| 15 |
|
| 16 | Section 1. Section 626.84201, Florida Statutes, is amended |
| 17 | to read: |
| 18 | 626.84201 Nonresident title insurance |
| 19 | agents.--Notwithstanding s. 626.8414(2), the department, upon |
| 20 | application and payment of the fees specified in s. 624.501, may |
| 21 | issue a license as a nonresident title insurance agent to an |
| 22 | individual not a resident of this state in the same manner |
| 23 | applicable to the licensure of nonresident general lines agents |
| 24 | under the provisions of s. 626.741, provided the individual |
| 25 | passes the examination for licensure required under s. 626.221. |
| 26 | Nonresident title insurance agents licensed pursuant to this |
| 27 | section must complete the continuing education requirements of |
| 28 | s. 626.2815 in the same manner as resident title insurance |
| 29 | agents. Sections 626.742 and 626.743 apply to nonresident title |
| 30 | insurance agents. |
| 31 | Section 2. Paragraph (h) of subsection (1) of section |
| 32 | 626.9541, Florida Statutes, is amended to read: |
| 33 | 626.9541 Unfair methods of competition and unfair or |
| 34 | deceptive acts or practices defined.-- |
| 35 | (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE |
| 36 | ACTS.--The following are defined as unfair methods of |
| 37 | competition and unfair or deceptive acts or practices: |
| 38 | (h) Unlawful rebates.-- |
| 39 | 1. Except as otherwise expressly provided by law, or in an |
| 40 | applicable filing with the office, knowingly: |
| 41 | a. Permitting, or offering to make, or making, any |
| 42 | contract or agreement as to such contract other than as plainly |
| 43 | expressed in the insurance contract issued thereon; |
| 44 | b. Paying, allowing, or giving, or offering to pay, allow, |
| 45 | or give, directly or indirectly, as inducement to such insurance |
| 46 | contract, any unlawful rebate of premiums payable on the |
| 47 | contract, any special favor or advantage in the dividends or |
| 48 | other benefits thereon, or any valuable consideration or |
| 49 | inducement whatever not specified in the contract; |
| 50 | c. Giving, selling, or purchasing, or offering to give, |
| 51 | sell, or purchase, as inducement to such insurance contract or |
| 52 | in connection therewith, any stocks, bonds, or other securities |
| 53 | of any insurance company or other corporation, association, or |
| 54 | partnership, or any dividends or profits accrued thereon, or |
| 55 | anything of value whatsoever not specified in the insurance |
| 56 | contract. |
| 57 | 2. Nothing in paragraph (g) or subparagraph 1. of this |
| 58 | paragraph shall be construed as including within the definition |
| 59 | of discrimination or unlawful rebates: |
| 60 | a. In the case of any contract of life insurance or life |
| 61 | annuity, paying bonuses to all policyholders or otherwise |
| 62 | abating their premiums in whole or in part out of surplus |
| 63 | accumulated from nonparticipating insurance; provided that any |
| 64 | such bonuses or abatement of premiums is fair and equitable to |
| 65 | all policyholders and for the best interests of the company and |
| 66 | its policyholders. |
| 67 | b. In the case of life insurance policies issued on the |
| 68 | industrial debit plan, making allowance to policyholders who |
| 69 | have continuously for a specified period made premium payments |
| 70 | directly to an office of the insurer in an amount which fairly |
| 71 | represents the saving in collection expenses. |
| 72 | c. Readjustment of the rate of premium for a group |
| 73 | insurance policy based on the loss or expense thereunder, at the |
| 74 | end of the first or any subsequent policy year of insurance |
| 75 | thereunder, which may be made retroactive only for such policy |
| 76 | year. |
| 77 | d. Issuance of life insurance policies or annuity |
| 78 | contracts at rates less than the usual rates of premiums for |
| 79 | such policies or contracts, as group insurance or employee |
| 80 | insurance as defined in this code. |
| 81 | e. Issuing life or disability insurance policies on a |
| 82 | salary savings, bank draft, preauthorized check, payroll |
| 83 | deduction, or other similar plan at a reduced rate reasonably |
| 84 | related to the savings made by the use of such plan. |
| 85 | 3.a. No title insurer, or any member, employee, attorney, |
| 86 | agent, or agency thereof, shall pay, allow, or give, or offer to |
| 87 | pay, allow, or give, directly or indirectly, as inducement to |
| 88 | title insurance, or after such insurance has been effected, any |
| 89 | rebate or abatement of the agent's, agency's, or title insurer's |
| 90 | share of the premium or any other charge or fee for related |
| 91 | title services below the cost for providing such services, or |
| 92 | provide any special favor or advantage, or any monetary |
| 93 | consideration or inducement whatever. Nothing herein contained |
| 94 | shall preclude an abatement in an attorney's fee charged for |
| 95 | legal services. |
| 96 | b. Nothing in this subparagraph shall be construed as |
| 97 | prohibiting the payment of fees to attorneys at law duly |
| 98 | licensed to practice law in the courts of this state, for |
| 99 | professional services, or as prohibiting the payment of earned |
| 100 | portions of the premium to duly appointed agents or agencies who |
| 101 | actually perform services for the title insurer. Nothing in this |
| 102 | subparagraph shall be construed as prohibiting a rebate or |
| 103 | abatement of an attorney's fee charged for professional services |
| 104 | or the agent's share of the premium or any other agent charge or |
| 105 | fee to the person responsible for paying the premium, charge, or |
| 106 | fee. |
| 107 | c. No insured named in a policy, or any other person |
| 108 | directly or indirectly connected with the transaction involving |
| 109 | the issuance of such policy, including, but not limited to, any |
| 110 | mortgage broker, real estate broker, builder, or attorney, any |
| 111 | employee, agent, agency, or representative thereof, or any other |
| 112 | person whatsoever, shall knowingly receive or accept, directly |
| 113 | or indirectly, any rebate or abatement of any portion of the |
| 114 | title insurance premium or of any other charge or fee said |
| 115 | charge, or any monetary consideration or inducement whatsoever, |
| 116 | except other than as set forth in sub-subparagraph b. |
| 117 | Section 3. Subsection (1) of section 627.7711, Florida |
| 118 | Statutes, is amended, and subsection (4) is added to that |
| 119 | section, to read: |
| 120 | 627.7711 Definitions.--As used in this part, the term: |
| 121 | (1)(a) "Closing Related title services" means services |
| 122 | performed by a licensed title insurer, or title insurance agent |
| 123 | or agency, or attorney agent in the agent's or agency's capacity |
| 124 | as such, including, but not limited to, preparing or obtaining a |
| 125 | title search, examining title, examining searches of the records |
| 126 | of a Uniform Commercial Code filing office and such other |
| 127 | information as may be necessary, preparing documents necessary |
| 128 | to close the transaction, conducting the closing, or handling |
| 129 | the disbursing of funds related to the closing in a real estate |
| 130 | closing transaction in which a title insurance commitment or |
| 131 | policy is to be issued. The premium, together with the charge |
| 132 | for related title services, constitutes the regular title |
| 133 | insurance premium. |
| 134 | (b) "Primary title services" means determining |
| 135 | insurability in accordance with sound underwriting practices |
| 136 | based upon evaluation of a reasonable title search and |
| 137 | examination of the title or a search of the records of a Uniform |
| 138 | Commercial Code filing office and such other information as may |
| 139 | be necessary, determination and clearance of underwriting |
| 140 | objections and requirements to eliminate risk, preparation and |
| 141 | issuance of a title insurance commitment setting forth the |
| 142 | requirements to insure, and preparation and issuance of the |
| 143 | policy. Such services do not include closing services or title |
| 144 | searches, for which a separate charge is or separate charges are |
| 145 | made. |
| 146 | (4) "Title search" means the compiling of title |
| 147 | information from official or public records. |
| 148 | Section 4. Subsection (1) of section 627.780, Florida |
| 149 | Statutes, is amended to read: |
| 150 | 627.780 Illegal dealings in risk premium.-- |
| 151 | (1) A person may not knowingly quote, charge, accept, |
| 152 | collect, or receive a premium for title insurance other than the |
| 153 | premium adopted by the commission, except as provided in s. |
| 154 | 626.9541(1)(h)3.b. |
| 155 | Section 5. Subsection (1) of section 627.782, Florida |
| 156 | Statutes, is amended to read: |
| 157 | 627.782 Adoption of rates.-- |
| 158 | (1) Subject to the rating provisions of this code, the |
| 159 | commission must adopt a rule specifying the premium to be |
| 160 | charged in this state by title insurers for the respective types |
| 161 | of title insurance contracts and, for policies issued through |
| 162 | agents or agencies, the percentage of such premium required to |
| 163 | be retained by the title insurer which shall not be less than 30 |
| 164 | percent. However, in a transaction subject to the Real Estate |
| 165 | Settlement Procedures Act of 1974, 12 U.S.C. ss. 2601 et seq., |
| 166 | as amended, no portion of the premium attributable to providing |
| 167 | a primary title service shall be paid to or retained by any |
| 168 | person who does not actually perform or is not liable for the |
| 169 | performance of such service. The commission may, by rule, |
| 170 | establish limitations on related title services charges made in |
| 171 | addition to the premium based upon the expenses associated with |
| 172 | the services rendered and other relevant factors. |
| 173 | Section 6. Subsection (1) of section 627.783, Florida |
| 174 | Statutes, is amended to read: |
| 175 | 627.783 Rate deviation.-- |
| 176 | (1) A title insurer may petition the office for an order |
| 177 | authorizing a specific deviation from the adopted premium, and a |
| 178 | title insurer or title insurance agent may petition the office |
| 179 | for an order authorizing and permitting a specific deviation |
| 180 | above the reasonable charge for related title services rendered |
| 181 | specified in s. 627.782(1). The petition shall be in writing and |
| 182 | sworn to and shall set forth allegations of fact upon which the |
| 183 | petitioner will rely, including the petitioner's reasons for |
| 184 | requesting the deviation. Any authorized title insurer, agent, |
| 185 | or agency may join in the petition for like authority to deviate |
| 186 | or may file a separate petition praying for like authority or |
| 187 | opposing the deviation. The office shall rule on all such |
| 188 | petitions simultaneously. |
| 189 | Section 7. Subsections (1), (2), and (3) of section |
| 190 | 627.7845, Florida Statutes, are amended to read: |
| 191 | 627.7845 Determination of insurability required; |
| 192 | preservation of evidence of title search and examination.-- |
| 193 | (1) A title insurer may not issue a title insurance |
| 194 | commitment, endorsement, or title insurance policy until the |
| 195 | title insurer has caused to be made conducted a determination of |
| 196 | insurability based upon the evaluation of a reasonable title |
| 197 | search and examination of the title or a search of the records |
| 198 | of a Uniform Commercial Code filing office, as applicable, has |
| 199 | examined such other information as may be necessary, and has |
| 200 | caused to be made a determination of insurability of title or |
| 201 | the existence, attachments, perfection, and priority of a |
| 202 | Uniform Commercial Code security interest, including endorsement |
| 203 | coverages, in accordance with sound underwriting practices. |
| 204 | (2) The title insurer shall cause the evidence of the |
| 205 | determination of insurability and the reasonable title search |
| 206 | and examination of the title or search of the records of a |
| 207 | Uniform Commercial Code filing office to be preserved and |
| 208 | retained in its files or in the files of its title insurance |
| 209 | agent or agency for a period of not less than 7 years after the |
| 210 | title insurance commitment, title insurance policy, or guarantee |
| 211 | of title was issued. The title insurer or agent or agency must |
| 212 | produce the evidence required to be maintained by this |
| 213 | subsection at its offices upon the demand of the office. Instead |
| 214 | of retaining the original evidence, the title insurer or the |
| 215 | title insurance agent or agency may, in the regular course of |
| 216 | business, establish a system under which all or part of the |
| 217 | evidence is recorded, copied, or reproduced by any photographic, |
| 218 | photostatic, microfilm, microcard, miniature photographic, or |
| 219 | other process which accurately reproduces or forms a durable |
| 220 | medium for reproducing the original. |
| 221 | (3) The title insurer or its agent or agency must maintain |
| 222 | a record of the actual risk premium charged and related title |
| 223 | service charges made for issuance of the policy and any |
| 224 | endorsements in its files for a period of not less than 7 years. |
| 225 | The title insurer, agent, or agency must produce the record at |
| 226 | its office upon demand of the office. |
| 227 | Section 8. This act shall take effect October 1, 2007. |