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 determining
148	insurability in accordance with sound underwriting practices
149	based upon evaluation of a reasonable title search and
150	examination of the title or a search of the records of a Uniform
151	Commercial Code filing office and such other information as may
152	be necessary, determination and clearance of underwriting
153	objections and requirements to eliminate risk, preparation and
154	issuance of a title insurance commitment setting forth the
155	requirements to insure, and preparation and issuance of the
156	policy. Such services do not include closing services or title
157	searches, for which a separate charge or separate charges may be
158	made.
159	(4)  "Title search" means the compiling of title
160	information from official or public records.
161	Section 4.  Subsection (1) of section 627.780, Florida
162	Statutes, is amended to read:
163	627.780  Illegal dealings in risk premium.--
164	(1)  A person may not knowingly quote, charge, accept,
165	collect, or receive a premium for title insurance other than the
166	premium adopted by the commission, except as provided in s.
167	626.9541(1)(h)3.b.
168	Section 5.  Subsection (1) of section 627.782, Florida
169	Statutes, is amended to read:
170	627.782  Adoption of rates.--
171	(1)  Subject to the rating provisions of this code, the
172	commission must adopt a rule specifying the premium to be
173	charged in this state by title insurers for the respective types
174	of title insurance contracts and, for policies issued through
175	agents or agencies, the percentage of such premium required to
176	be retained by the title insurer which shall not be less than 30
177	percent. However, in a transaction subject to the Real Estate
178	Settlement Procedures Act of 1974, 12 U.S.C. ss. 2601 et seq.,
179	as amended, no portion of the premium attributable to providing
180	a primary title service shall be paid to or retained by any
181	person who does not actually perform or is not liable for the
182	performance of such service. The commission may, by rule,
183	establish limitations on related title services charges made in
184	addition to the premium based upon the expenses associated with
185	the services rendered and other relevant factors.
186	Section 6.  Subsection (1) of section 627.783, Florida
187	Statutes, is amended to read:
188	627.783  Rate deviation.--
189	(1)  A title insurer may petition the office for an order
190	authorizing a specific deviation from the adopted premium, and a
191	title insurer or title insurance agent may petition the office
192	for an order authorizing and permitting a specific deviation
193	above the reasonable charge for related title services rendered
194	specified in s. 627.782(1). The petition shall be in writing and
195	sworn to and shall set forth allegations of fact upon which the
196	petitioner will rely, including the petitioner's reasons for
197	requesting the deviation. Any authorized title insurer, agent,
198	or agency may join in the petition for like authority to deviate
199	or may file a separate petition praying for like authority or
200	opposing the deviation. The office shall rule on all such
201	petitions simultaneously.
202	Section 7.  Subsections (1), (2), and (3) of section
203	627.7845, Florida Statutes, are amended to read:
204	627.7845  Determination of insurability required;
205	preservation of evidence of title search and examination.--
206	(1)  A title insurer may not issue a title insurance
207	commitment, endorsement, or title insurance policy until the
208	title insurer has caused to be made conducted a determination of
209	insurability based upon the evaluation of a reasonable title
210	search and examination of the title or a search of the records
211	of a Uniform Commercial Code filing office, as applicable, has
212	examined such other information as may be necessary, and has
213	caused to be made a determination of insurability of title or
214	the existence, attachments, perfection, and priority of a
215	Uniform Commercial Code security interest, including endorsement
216	coverages, in accordance with sound underwriting practices.
217	(2)  The title insurer shall cause the evidence of the
218	determination of insurability and the reasonable title search
219	and examination of the title or search of the records of a
220	Uniform Commercial Code filing office to be preserved and
221	retained in its files or in the files of its title insurance
222	agent or agency for a period of not less than 7 years after the
223	title insurance commitment, title insurance policy, or guarantee
224	of title was issued. The title insurer or agent or agency must
225	produce the evidence required to be maintained by this
226	subsection at its offices upon the demand of the office. Instead
227	of retaining the original evidence, the title insurer or the
228	title insurance agent or agency may, in the regular course of
229	business, establish a system under which all or part of the
230	evidence is recorded, copied, or reproduced by any photographic,
231	photostatic, microfilm, microcard, miniature photographic, or
232	other process which accurately reproduces or forms a durable
233	medium for reproducing the original.
234	(3)  The title insurer or its agent or agency must maintain
235	a record of the actual risk premium charged and related title
236	service charges made for issuance of the policy and any
237	endorsements in its files for a period of not less than 7 years.
238	The title insurer, agent, or agency must produce the record at
239	its office upon demand of the office.
240	Section 8.  Subsection (1) of section 701.04, Florida
241	Statutes, is amended to read:
242	701.04  Cancellation of mortgages, liens, and judgments.--
243	(1)  Within 14 days after receipt of the written request of
244	a mortgagor, the holder of a mortgage shall deliver to the
245	mortgagor at a place designated in the written request an
246	estoppel letter setting forth the unpaid principal balance of
247	the loan secured by the mortgage, including principal, interest,
248	and any other charges properly due under or secured by the
249	mortgage and interest on a per-day basis for the unpaid balance
250	due, and the per diem rate. Whenever the amount of money due on
251	any mortgage, lien, or judgment shall be fully paid to the
252	person or party entitled to the payment thereof, the mortgagee,
253	creditor, or assignee, or the attorney of record in the case of
254	a judgment, to whom such payment shall have been made, shall
255	execute in writing an instrument acknowledging satisfaction of
256	said mortgage, lien, or judgment and have the same acknowledged,
257	or proven, and duly entered of record in the book provided by
258	law for such purposes in the proper county. Within 60 days of
259	the date of receipt of the full payment of the mortgage, lien,
260	or judgment, the person required to acknowledge satisfaction of
261	the mortgage, lien, or judgment shall send or cause to be sent
262	the recorded satisfaction to the person who has made the full
263	payment. In the case of a civil action arising out of the
264	provisions of this section, the prevailing party shall be
265	entitled to attorney's fees and costs.
266	Section 9.  Subsection (1), paragraphs (b), (e), and (f) of
267	subsection (3), paragraphs (a) and (c) of subsection (6), and
268	subsections (8) and (9) of section 701.041, Florida Statutes,
269	are amended to read:
270	701.041  Title insurer; mortgage release certificate.--
271	(1)  DEFINITIONS.--For purposes of this section:
272	(a)  "Estoppel letter" means a statement of the amount of:
273	1.  The unpaid balance of a loan secured by a mortgage,
274	including principal, interest, and any other charges properly
275	due under or secured by the mortgage.
276	2.  Interest on a per-day basis for the unpaid balance.
277	"Mortgage" means a mortgage or mortgage lien on an interest in
278	real property in this state, including any modifications
279	thereof, given to secure a loan in the principal amount of
280	$500,000 or less, other than a mortgage securing an open-end or
281	revolving credit agreement.
282	(b)  "Mortgagee" means:
283	1.  The grantee of a mortgage; or
284	2.  If a mortgage has been assigned of record, the last
285	person to whom the mortgage has been assigned of record.
286	(c)  "Mortgage servicer" means the last person to whom a
287	mortgagor or the mortgagor's successor in interest has been
288	instructed by a mortgagee to send payments on a loan secured by
289	a mortgage. A person transmitting an estoppel letter a payoff
290	statement is the mortgage servicer for the mortgage described in
291	the estoppel letter payment statement.
292	(d)  "Mortgagor" means the grantor of a mortgage.
293	(e)  "Payoff statement" means a statement of the amount of:
294	1.  The unpaid balance of a loan secured by a mortgage,
295	including principal, interest, and any other charges properly
296	due under or secured by the mortgage.
297	2.  Interest on a per-day basis for the unpaid balance.
298	(e)(f)  "Record" means to record with the clerk of the
299	circuit court or the comptroller in the county or counties in
300	which the real property securing the mortgage is located.
301	(f)(g)  "Title insurer" means a corporation or other
302	business entity authorized and licensed to transact the business
303	of insuring titles to interests in real property in this state
304	under chapter 624.
305	(3)  CONTENTS.--A certificate of release executed under
306	this section must contain:
307	(b)  A statement that the mortgage being released is
308	eligible for release under this section, including any
309	modifications thereof, was in the principal amount of $500,000
310	or less.
311	(e)  A statement that the mortgagee or mortgage servicer
312	provided an estoppel letter a payoff statement which was used to
313	make payment in full of the unpaid balance of the loan secured
314	by the mortgage.
315	(f)  A statement that payment in full of the unpaid balance
316	of the loan secured by the mortgage was made in accordance with
317	the estoppel letter payoff statement and that a copy of the
318	certificate of release was sent to the mortgagee or mortgage
319	servicer that provided the estoppel letter payoff statement.
320	(6)  LIABILITY OF TITLE INSURER AND TITLE INSURANCE
321	AGENT.--
322	(a)  In addition to any other remedy provided by law, a
323	title insurer and title insurance agent recording a certificate
324	of release under this section shall be liable to the holder of
325	the obligation secured by the mortgage for actual damage
326	sustained due to the recording of the certificate of release.
327	Reasonable costs and attorneys' fees shall be awarded to the
328	prevailing party.
329	(c)  The title insurer and title insurance agent shall have
330	no liability under this subsection if the title insurer or title
331	insurance agent shows that payment in full of the unpaid balance
332	of the loan secured by the mortgage was made in accordance with
333	the estoppel letter payoff statement furnished by the mortgagee
334	or the mortgage servicer.
335	(8)  APPLICATION.--This section applies only to a mortgage
336	that secures a loan, including any modifications of such
337	mortgage, in the principal amount of $500,000 or less as
338	determined from the recorded mortgage and contains no disclosure
339	of record that the mortgage secures an open-end or revolving
340	line of credit agreement.
341	(9)  PREMIUM.--The Financial Services Commission shall
342	adopt rules establishing an actuarially sound premium charge to
343	be made for each certificate of release recorded pursuant to
344	this section.
345	Section 10.  This act shall take effect October 1, 2007.

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