CS/HB 111

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; amending s. 701.04, F.S.; revising
13	requirements for an estoppel letter; amending s. 701.041,
14	F.S.; revising definitions; providing for application to
15	certain mortgages; providing liability for title insurance
16	agents recording a certificate of release; repealing the
17	authority of the Financial Services Commission to adopt
18	rules regarding the charge for the certificate of release;
19	providing an effective date.
20
21	Be It Enacted by the Legislature of the State of Florida:
22
23	Section 1.  Section 626.84201, Florida Statutes, is amended
24	to read:
25	626.84201  Nonresident title insurance
26	agents.--Notwithstanding s. 626.8414(2), the department, upon
27	application and payment of the fees specified in s. 624.501, may
28	issue a license as a nonresident title insurance agent to an
29	individual not a resident of this state in the same manner
30	applicable to the licensure of nonresident general lines agents
31	under the provisions of s. 626.741, provided the individual
32	passes the examination for licensure required under s. 626.221.
33	Nonresident title insurance agents licensed pursuant to this
34	section must complete the continuing education requirements of
35	s. 626.2815 in the same manner as resident title insurance
36	agents. Sections 626.742 and 626.743 apply to nonresident title
37	insurance agents.
38	Section 2.  Paragraph (h) of subsection (1) of section
39	626.9541, Florida Statutes, is amended to read:
40	626.9541  Unfair methods of competition and unfair or
41	deceptive acts or practices defined.--
42	(1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
43	ACTS.--The following are defined as unfair methods of
44	competition and unfair or deceptive acts or practices:
45	(h)  Unlawful rebates.--
46	1.  Except as otherwise expressly provided by law, or in an
47	applicable filing with the office, knowingly:
48	a.  Permitting, or offering to make, or making, any
49	contract or agreement as to such contract other than as plainly
50	expressed in the insurance contract issued thereon;
51	b.  Paying, allowing, or giving, or offering to pay, allow,
52	or give, directly or indirectly, as inducement to such insurance
53	contract, any unlawful rebate of premiums payable on the
54	contract, any special favor or advantage in the dividends or
55	other benefits thereon, or any valuable consideration or
56	inducement whatever not specified in the contract;
57	c.  Giving, selling, or purchasing, or offering to give,
58	sell, or purchase, as inducement to such insurance contract or
59	in connection therewith, any stocks, bonds, or other securities
60	of any insurance company or other corporation, association, or
61	partnership, or any dividends or profits accrued thereon, or
62	anything of value whatsoever not specified in the insurance
63	contract.
64	2.  Nothing in paragraph (g) or subparagraph 1. of this
65	paragraph shall be construed as including within the definition
66	of discrimination or unlawful rebates:
67	a.  In the case of any contract of life insurance or life
68	annuity, paying bonuses to all policyholders or otherwise
69	abating their premiums in whole or in part out of surplus
70	accumulated from nonparticipating insurance; provided that any
71	such bonuses or abatement of premiums is fair and equitable to
72	all policyholders and for the best interests of the company and
73	its policyholders.
74	b.  In the case of life insurance policies issued on the
75	industrial debit plan, making allowance to policyholders who
76	have continuously for a specified period made premium payments
77	directly to an office of the insurer in an amount which fairly
78	represents the saving in collection expenses.
79	c.  Readjustment of the rate of premium for a group
80	insurance policy based on the loss or expense thereunder, at the
81	end of the first or any subsequent policy year of insurance
82	thereunder, which may be made retroactive only for such policy
83	year.
84	d.  Issuance of life insurance policies or annuity
85	contracts at rates less than the usual rates of premiums for
86	such policies or contracts, as group insurance or employee
87	insurance as defined in this code.
88	e.  Issuing life or disability insurance policies on a
89	salary savings, bank draft, preauthorized check, payroll
90	deduction, or other similar plan at a reduced rate reasonably
91	related to the savings made by the use of such plan.
92	3.a.  No title insurer, or any member, employee, attorney,
93	agent, or agency thereof, shall pay, allow, or give, or offer to
94	pay, allow, or give, directly or indirectly, as inducement to
95	title insurance, or after such insurance has been effected, any
96	rebate or abatement of the agent's, agency's, or title insurer's
97	share of the premium or any other charge or fee for related
98	title services below the cost for providing such services, or
99	provide any special favor or advantage, or any monetary
100	consideration or inducement whatever. Nothing herein contained
101	shall preclude an abatement in an attorney's fee charged for
102	legal services.
103	b.  Nothing in this subparagraph shall be construed as
104	prohibiting the payment of fees to attorneys at law duly
105	licensed to practice law in the courts of this state, for
106	professional services, or as prohibiting the payment of earned
107	portions of the premium to duly appointed agents or agencies who
108	actually perform services for the title insurer. Nothing in this
109	subparagraph shall be construed as prohibiting a rebate or
110	abatement of an attorney's fee charged for professional
111	services, or that portion of the premium that is not required to
112	be retained by the insurer pursuant to s. 627.782(1), or any
113	other agent charge or fee to the person responsible for paying
114	the premium, charge, or fee.
115	c.  No insured named in a policy, or any other person
116	directly or indirectly connected with the transaction involving
117	the issuance of such policy, including, but not limited to, any
118	mortgage broker, real estate broker, builder, or attorney, any
119	employee, agent, agency, or representative thereof, or any other
120	person whatsoever, shall knowingly receive or accept, directly
121	or indirectly, any rebate or abatement of any portion of the
122	title insurance premium or of any other charge or fee said
123	charge, or any monetary consideration or inducement whatsoever,
124	except other than as set forth in sub-subparagraph b.; provided,
125	in no event shall any portion of the attorney's fee, any portion
126	of the premium that is not required to be retained by the
127	insurer pursuant to s. 627.782(1), any agent charge or fee, or
128	any other monetary consideration or inducement be paid directly
129	or indirectly for the referral of title insurance business.
130	Section 3.  Subsection (1) of section 627.7711, Florida
131	Statutes, is amended, and subsection (4) is added to that
132	section, to read:
133	627.7711  Definitions.--As used in this part, the term:
134	(1)(a)  "Closing Related title services" means services
135	performed by a licensed title insurer, or title insurance agent
136	or agency, or attorney agent in the agent's or agency's capacity
137	as such, including, but not limited to, preparing or obtaining a
138	title search, examining title, examining searches of the records
139	of a Uniform Commercial Code filing office and such other
140	information as may be necessary, preparing documents necessary
141	to close the transaction, conducting the closing, or handling
142	the disbursing of funds related to the closing in a real estate
143	closing transaction in which a title insurance commitment or
144	policy is to be issued. The premium, together with the charge
145	for related title services, constitutes the regular title
146	insurance premium.
147	(b)  "Primary title services" means conducting or obtaining
148	a title search or a search of the records of a Uniform
149	Commercial Code filing office and obtaining such other
150	information as may be necessary to determine insurability,
151	determining insurability in accordance with sound underwriting
152	practices based upon evaluation of a reasonable title search and
153	examination of the title or a search of the records of a Uniform
154	Commercial Code filing office and such other information as may
155	be necessary, determination and clearance of underwriting
156	objections and requirements to eliminate risk, preparation and
157	issuance of a title insurance commitment setting forth the
158	requirements to insure, and preparation and issuance of the
159	policy. Such services do not include closing services for which
160	a separate charge is or separate charges are made.
161	(4)  "Title search" means the compiling of title
162	information from official or public records.
163	Section 4.  Subsection (1) of section 627.780, Florida
164	Statutes, is amended to read:
165	627.780  Illegal dealings in risk premium.--
166	(1)  A person may not knowingly quote, charge, accept,
167	collect, or receive a premium for title insurance other than the
168	premium adopted by the commission, except as provided in s.
169	626.9541(1)(h)3.b.
170	Section 5.  Subsection (1) of section 627.782, Florida
171	Statutes, is amended to read:
172	627.782  Adoption of rates.--
173	(1)  Subject to the rating provisions of this code, the
174	commission must adopt a rule specifying the premium to be
175	charged in this state by title insurers for the respective types
176	of title insurance contracts and, for policies issued through
177	agents or agencies, the percentage of such premium required to
178	be retained by the title insurer which shall not be less than 30
179	percent. However, in a transaction subject to the Real Estate
180	Settlement Procedures Act of 1974, 12 U.S.C. ss. 2601 et seq.,
181	as amended, no portion of the premium attributable to providing
182	a primary title service shall be paid to or retained by any
183	person who does not actually perform or is not liable for the
184	performance of such service. The commission may, by rule,
185	establish limitations on related title services charges made in
186	addition to the premium based upon the expenses associated with
187	the services rendered and other relevant factors.
188	Section 6.  Subsection (1) of section 627.783, Florida
189	Statutes, is amended to read:
190	627.783  Rate deviation.--
191	(1)  A title insurer may petition the office for an order
192	authorizing a specific deviation from the adopted premium, and a
193	title insurer or title insurance agent may petition the office
194	for an order authorizing and permitting a specific deviation
195	above the reasonable charge for related title services rendered
196	specified in s. 627.782(1). The petition shall be in writing and
197	sworn to and shall set forth allegations of fact upon which the
198	petitioner will rely, including the petitioner's reasons for
199	requesting the deviation. Any authorized title insurer, agent,
200	or agency may join in the petition for like authority to deviate
201	or may file a separate petition praying for like authority or
202	opposing the deviation. The office shall rule on all such
203	petitions simultaneously.
204	Section 7.  Subsections (1), (2), and (3) of section
205	627.7845, Florida Statutes, are amended to read:
206	627.7845  Determination of insurability required;
207	preservation of evidence of title search and examination.--
208	(1)  A title insurer may not issue a title insurance
209	commitment, endorsement, or title insurance policy until the
210	title insurer has caused to be made conducted a determination of
211	insurability based upon the evaluation of a reasonable title
212	search and examination of the title or a search of the records
213	of a Uniform Commercial Code filing office, as applicable, has
214	examined such other information as may be necessary, and has
215	caused to be made a determination of insurability of title or
216	the existence, attachments, perfection, and priority of a
217	Uniform Commercial Code security interest, including endorsement
218	coverages, in accordance with sound underwriting practices.
219	(2)  The title insurer shall cause the evidence of the
220	determination of insurability and the reasonable title search
221	and examination of the title or search of the records of a
222	Uniform Commercial Code filing office to be preserved and
223	retained in its files or in the files of its title insurance
224	agent or agency for a period of not less than 7 years after the
225	title insurance commitment, title insurance policy, or guarantee
226	of title was issued. The title insurer or agent or agency must
227	produce the evidence required to be maintained by this
228	subsection at its offices upon the demand of the office. Instead
229	of retaining the original evidence, the title insurer or the
230	title insurance agent or agency may, in the regular course of
231	business, establish a system under which all or part of the
232	evidence is recorded, copied, or reproduced by any photographic,
233	photostatic, microfilm, microcard, miniature photographic, or
234	other process which accurately reproduces or forms a durable
235	medium for reproducing the original.
236	(3)  The title insurer or its agent or agency must maintain
237	a record of the actual risk premium charged and related title
238	service charges made for issuance of the policy and any
239	endorsements in its files for a period of not less than 7 years.
240	The title insurer, agent, or agency must produce the record at
241	its office upon demand of the office.
242	Section 8.  Subsection (1) of section 701.04, Florida
243	Statutes, is amended to read:
244	701.04  Cancellation of mortgages, liens, and judgments.--
245	(1)  Within 14 days after receipt of the written request of
246	a mortgagor, the holder of a mortgage shall deliver to the
247	mortgagor at a place designated in the written request an
248	estoppel letter setting forth the unpaid principal balance of
249	the loan secured by the mortgage, including principal, interest,
250	and any other charges properly due under or secured by the
251	mortgage and interest on a per-day basis for the unpaid balance
252	due, and the per diem rate. Whenever the amount of money due on
253	any mortgage, lien, or judgment shall be fully paid to the
254	person or party entitled to the payment thereof, the mortgagee,
255	creditor, or assignee, or the attorney of record in the case of
256	a judgment, to whom such payment shall have been made, shall
257	execute in writing an instrument acknowledging satisfaction of
258	said mortgage, lien, or judgment and have the same acknowledged,
259	or proven, and duly entered of record in the book provided by
260	law for such purposes in the proper county. Within 60 days of
261	the date of receipt of the full payment of the mortgage, lien,
262	or judgment, the person required to acknowledge satisfaction of
263	the mortgage, lien, or judgment shall send or cause to be sent
264	the recorded satisfaction to the person who has made the full
265	payment. In the case of a civil action arising out of the
266	provisions of this section, the prevailing party shall be
267	entitled to attorney's fees and costs.
268	Section 9.  Subsection (1), paragraphs (b), (e), and (f) of
269	subsection (3), paragraphs (a) and (c) of subsection (6), and
270	subsections (8) and (9) of section 701.041, Florida Statutes,
271	are amended to read:
272	701.041  Title insurer; mortgage release certificate.--
273	(1)  DEFINITIONS.--For purposes of this section:
274	(a)  "Estoppel letter" means a statement of the amount of:
275	1.  The unpaid balance of a loan secured by a mortgage,
276	including principal, interest, and any other charges properly
277	due under or secured by the mortgage.
278	2.  Interest on a per-day basis for the unpaid balance.
279	"Mortgage" means a mortgage or mortgage lien on an interest in
280	real property in this state, including any modifications
281	thereof, given to secure a loan in the principal amount of
282	$500,000 or less, other than a mortgage securing an open-end or
283	revolving credit agreement.
284	(b)  "Mortgagee" means:
285	1.  The grantee of a mortgage; or
286	2.  If a mortgage has been assigned of record, the last
287	person to whom the mortgage has been assigned of record.
288	(c)  "Mortgage servicer" means the last person to whom a
289	mortgagor or the mortgagor's successor in interest has been
290	instructed by a mortgagee to send payments on a loan secured by
291	a mortgage. A person transmitting an estoppel letter a payoff
292	statement is the mortgage servicer for the mortgage described in
293	the estoppel letter payment statement.
294	(d)  "Mortgagor" means the grantor of a mortgage.
295	(e)  "Payoff statement" means a statement of the amount of:
296	1.  The unpaid balance of a loan secured by a mortgage,
297	including principal, interest, and any other charges properly
298	due under or secured by the mortgage.
299	2.  Interest on a per-day basis for the unpaid balance.
300	(e)(f)  "Record" means to record with the clerk of the
301	circuit court or the comptroller in the county or counties in
302	which the real property securing the mortgage is located.
303	(f)(g)  "Title insurer" means a corporation or other
304	business entity authorized and licensed to transact the business
305	of insuring titles to interests in real property in this state
306	under chapter 624.
307	(3)  CONTENTS.--A certificate of release executed under
308	this section must contain:
309	(b)  A statement that the mortgage being released is
310	eligible for release under this section, including any
311	modifications thereof, was in the principal amount of $500,000
312	or less.
313	(e)  A statement that the mortgagee or mortgage servicer
314	provided an estoppel letter a payoff statement which was used to
315	make payment in full of the unpaid balance of the loan secured
316	by the mortgage.
317	(f)  A statement that payment in full of the unpaid balance
318	of the loan secured by the mortgage was made in accordance with
319	the estoppel letter payoff statement and that a copy of the
320	certificate of release was sent to the mortgagee or mortgage
321	servicer that provided the estoppel letter payoff statement.
322	(6)  LIABILITY OF TITLE INSURER AND TITLE INSURANCE
323	AGENT.--
324	(a)  In addition to any other remedy provided by law, a
325	title insurer and title insurance agent recording a certificate
326	of release under this section shall be liable to the holder of
327	the obligation secured by the mortgage for actual damage
328	sustained due to the recording of the certificate of release.
329	Reasonable costs and attorneys' fees shall be awarded to the
330	prevailing party.
331	(c)  The title insurer and title insurance agent shall have
332	no liability under this subsection if the title insurer or title
333	insurance agent shows that payment in full of the unpaid balance
334	of the loan secured by the mortgage was made in accordance with
335	the estoppel letter payoff statement furnished by the mortgagee
336	or the mortgage servicer.
337	(8)  APPLICATION.--This section applies only to a mortgage
338	that secures a loan, including any modifications of such
339	mortgage, in the principal amount of $500,000 or less as
340	determined from the recorded mortgage and contains no disclosure
341	of record that the mortgage secures an open-end or revolving
342	line of credit agreement.
343	(9)  PREMIUM.--The Financial Services Commission shall
344	adopt rules establishing an actuarially sound premium charge to
345	be made for each certificate of release recorded pursuant to
346	this section.
347	Section 10.  This act shall take effect October 1, 2007.

CODING: Words stricken are deletions; words underlined are additions.