1 | A bill to be entitled |
2 | An act relating to title insurance; amending s. |
3 | 626.2815, F.S.; specifying continuing education |
4 | requirements for title insurance agents; authorizing |
5 | the Department of Financial Services to contract with |
6 | a private entity for services related to continuing |
7 | education for title insurance agents; amending s. |
8 | 626.841, F.S.; providing a definition for the term |
9 | "agent in charge of a title insurance agency"; |
10 | amending s. 626.8417, F.S.; requiring that certain |
11 | attorney-owned entities that engage in business as a |
12 | title insurance agency, other than the active practice |
13 | of law, must be licensed as a title insurance agency |
14 | with a designated agent in charge; amending s. |
15 | 626.8418, F.S.; deleting specified financial security |
16 | and bond requirements relating to an applicant for |
17 | licensure as a title insurance agency; amending s. |
18 | 626.8419, F.S.; increasing the amount of a fidelity |
19 | bond that a title insurance agency must file with the |
20 | department and limiting the amount of the deductible |
21 | applicable to such bond; creating s. 626.8422, F.S.; |
22 | specifying requirements that apply to title insurance |
23 | agencies relating to the designation of an agent in |
24 | charge at specified locations; providing a penalty for |
25 | failing to designate an agent in charge under certain |
26 | circumstances; amending s. 626.8437, F.S.; specifying |
27 | additional grounds to deny, suspend, revoke, or refuse |
28 | to renew or continue the license or appointment of a |
29 | title insurance agent or agency; amending s. 626.8473, |
30 | F.S.; requiring an attorney serving as a title or real |
31 | estate settlement agent to deposit and maintain |
32 | certain funds in a separate trust account and permit |
33 | the account to be audited by the applicable title |
34 | insurer, unless prohibited by the rules of The Florida |
35 | Bar; amending s. 627.777, F.S.; providing procedures |
36 | and requirements relating to the approval or |
37 | disapproval of title insurance forms by the |
38 | department; creating s. 627.7815, F.S.; specifying |
39 | requirements for submission of a document or |
40 | information to the department in order for a person to |
41 | claim that the document is a trade secret; requiring |
42 | each page or portion to be labeled as a trade secret |
43 | and be separated from non-trade secret material; |
44 | requiring the submitting party to include an affidavit |
45 | certifying certain information about the documents |
46 | claimed to be trade secrets; providing that certain |
47 | data submitted by a title insurance agent or title |
48 | insurer is presumed to be a trade secret whether or |
49 | not so designated; amending s. 627.782, F.S.; |
50 | requiring title insurance agencies and certain |
51 | insurers to submit specified information to the |
52 | department to assist in the analysis of title |
53 | insurance premium rates, title search costs, and the |
54 | condition of the title insurance industry; creating s. |
55 | 627.7985, F.S.; authorizing the department to adopt |
56 | specified rules relating to title insurance; providing |
57 | penalties for willful violation of any such rule; |
58 | creating s. 689.263, F.S.; specifying requirements |
59 | that a title insurance agent or agency must meet in |
60 | order to distribute funds relating to certain real |
61 | estate sales or purchases; providing an effective |
62 | date. |
63 |
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64 | Be It Enacted by the Legislature of the State of Florida: |
65 |
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66 | Section 1. Paragraph (d) of subsection (3) of section |
67 | 626.2815, Florida Statutes, is amended, paragraph (l) is added |
68 | to that subsection, and subsection (8) is added to that section, |
69 | to read: |
70 | 626.2815 Continuing education required; application; |
71 | exceptions; requirements; penalties.- |
72 | (3) |
73 | (d) Any person who holds a license as a customer |
74 | representative, limited customer representative, title agent, |
75 | motor vehicle physical damage and mechanical breakdown insurance |
76 | agent, crop or hail and multiple-peril crop insurance agent, or |
77 | as an industrial fire insurance or burglary insurance agent and |
78 | who is not a licensed life or health insurance agent, must shall |
79 | be required to complete 10 hours of continuing education courses |
80 | every 2 years. |
81 | (l) Any person who holds a license as a title insurance |
82 | agent must complete a minimum of 10 hours of continuing |
83 | education courses every 2 years in title insurance and escrow |
84 | management specific to this state and approved by the |
85 | department, which shall include at least 3 hours of continuing |
86 | education on the subject matter of ethics, rules, or compliance |
87 | with state and federal regulations relating to title insurance |
88 | and closing services. |
89 | (8) The department may contract with a private entity for |
90 | services related to the administration, review, or approval of a |
91 | continuing education program for title insurance agents. The |
92 | contract shall be procured as one for a contractual service |
93 | pursuant to s. 287.057. |
94 | Section 2. Section 626.841, Florida Statutes, is amended |
95 | to read: |
96 | 626.841 Definitions.-The term: |
97 | (1) "Agent in charge of a title insurance agency" means an |
98 | attorney or a licensed and appointed title insurance agent who |
99 | is designated as agent in charge pursuant to s. 626.8422. |
100 | (2) "Title insurance agency" means an insurance agency |
101 | under which title insurance agents and other employees determine |
102 | insurability in accordance with underwriting rules and standards |
103 | prescribed by the title insurer represented by the agency, and |
104 | issue and countersign commitments, endorsements, or policies of |
105 | title insurance, on behalf of the appointing title insurer. The |
106 | term does not include a title insurer. |
107 | (3)(1) "Title insurance agent" means a person appointed in |
108 | writing by a title insurer to issue and countersign commitments |
109 | or policies of title insurance on in its behalf. |
110 | Section 3. Paragraph (c) of subsection (4) of section |
111 | 626.8417, Florida Statutes, is amended to read: |
112 | 626.8417 Title insurance agent licensure; exemptions.- |
113 | (4) |
114 | (c) If one or more an attorney or attorneys own a |
115 | corporation or other legal entity that which is doing business |
116 | as a title insurance agency other than an entity engaged in the |
117 | active practice of law, the agency must be licensed and |
118 | appointed as a title insurance agency with an agent in charge |
119 | designated for the agency. |
120 | Section 4. Section 626.8418, Florida Statutes, is amended |
121 | to read: |
122 | 626.8418 Application for title insurance agency license.- |
123 | Before Prior to doing business in this state as a title |
124 | insurance agency, a title insurance agency must meet all of the |
125 | following requirements: |
126 | (1) The applicant must file with the department an |
127 | application for a license as a title insurance agency, on |
128 | printed forms furnished by the department, that includes all of |
129 | the following: |
130 | (1)(a) The name of each majority owner, partner, officer, |
131 | and director of the agency. |
132 | (2)(b) The residence address of each person required to be |
133 | listed under subsection (1) paragraph (a). |
134 | (3)(c) The name of the agency and its principal business |
135 | address. |
136 | (4)(d) The location of each agency office and the name |
137 | under which each agency office conducts or will conduct |
138 | business. |
139 | (5)(e) The name of each agent to be in full-time charge of |
140 | an agency office and specification of which office. |
141 | (6)(f) Such additional information as the department |
142 | requires by rule to ascertain the trustworthiness and competence |
143 | of persons required to be listed on the application and to |
144 | ascertain that such persons meet the requirements of this code. |
145 | (2) The applicant must have deposited with the department |
146 | securities of the type eligible for deposit under s. 625.52 and |
147 | having at all times a market value of not less than $35,000. In |
148 | place of such deposit, the title insurance agency may post a |
149 | surety bond of like amount payable to the department for the |
150 | benefit of any appointing insurer damaged by a violation by the |
151 | title insurance agency of its contract with the appointing |
152 | insurer. If a properly documented claim is timely filed with the |
153 | department by a damaged title insurer, the department may remit |
154 | an appropriate amount of the deposit or the proceeds that are |
155 | received from the surety in payment of the claim. The required |
156 | deposit or bond must be made by the title insurance agency, and |
157 | a title insurer may not provide the deposit or bond directly or |
158 | indirectly on behalf of the title insurance agency. The deposit |
159 | or bond must secure the performance by the title insurance |
160 | agency of its duties and responsibilities under the issuing |
161 | agency contracts with each title insurer for which it is |
162 | appointed. The agency may exchange or substitute other |
163 | securities of like quality and value for securities on deposit, |
164 | may receive the interest and other income accruing on such |
165 | securities, and may inspect the deposit at all reasonable times. |
166 | Such deposit or bond must remain unimpaired as long as the title |
167 | insurance agency continues in business in this state and until 1 |
168 | year after termination of all title insurance agency |
169 | appointments held by the title insurance agency. The title |
170 | insurance agency is entitled to the return of the deposit or |
171 | bond together with accrued interest after such year has passed, |
172 | if no claim has been made against the deposit or bond. If a |
173 | surety bond is unavailable generally, the department may adopt |
174 | rules for alternative methods to comply with this subsection. |
175 | With respect to such alternative methods for compliance, the |
176 | department must be guided by the past business performance and |
177 | good reputation and character of the proposed title insurance |
178 | agency. A surety bond is deemed to be unavailable generally if |
179 | the prevailing annual premium exceeds 25 percent of the |
180 | principal amount of the bond. |
181 | Section 5. Paragraph (a) of subsection (1) of section |
182 | 626.8419, Florida Statutes, is amended to read: |
183 | 626.8419 Appointment of title insurance agency.- |
184 | (1) The title insurer engaging or employing the title |
185 | insurance agency must file with the department, on printed forms |
186 | furnished by the department, an application certifying that the |
187 | proposed title insurance agency meets all of the following |
188 | requirements: |
189 | (a) The agency must have obtained a fidelity bond in an |
190 | amount, not less than $250,000, with a deductible not exceeding |
191 | 1 percent of the bond amount $50,000, acceptable to the insurer |
192 | appointing the agency. If a fidelity bond is unavailable |
193 | generally, the department must adopt rules for alternative |
194 | methods to comply with this paragraph. |
195 | Section 6. Section 626.8422, Florida Statutes, is created |
196 | to read: |
197 | 626.8422 Agent in charge.- |
198 | (1) Each location within this state of a title insurance |
199 | agency or branch office of a title insurance agency that is |
200 | regularly open to the public for closing services, as defined in |
201 | s. 627.7711, and at which disbursement of escrow funds or policy |
202 | issuance services are regularly performed must have a separate |
203 | agent in charge designated by the title insurance agency. The |
204 | failure of a title insurance agency to designate an agent in |
205 | charge, on a form prescribed by the department, within 10 |
206 | working days after an agency begins business at a location or |
207 | makes a change of the agent in charge, is a violation of this |
208 | chapter, punishable as provided in s. 626.844. |
209 | (2) The agent in charge shall perform the activities |
210 | described in subsection (1) at the location where he or she is |
211 | the designated agent in charge. |
212 | (3) An agency shall designate an attorney duly admitted to |
213 | practice law in this state and in good standing with The Florida |
214 | Bar or a title insurance agent licensed in this state as agent |
215 | in charge for each location of the agency or insurer as |
216 | described in subsection (1). In the case of multiple locations |
217 | where the activities as described in subsection (1) are |
218 | performed, the agency shall designate a separate agent in charge |
219 | for each location. |
220 | Section 7. Subsections (11) and (12) are added to section |
221 | 626.8437, Florida Statutes, to read: |
222 | 626.8437 Grounds for denial, suspension, revocation, or |
223 | refusal to renew license or appointment.-The department shall |
224 | deny, suspend, revoke, or refuse to renew or continue the |
225 | license or appointment of any title insurance agent or agency, |
226 | and it shall suspend or revoke the eligibility to hold a license |
227 | or appointment of such person, if it finds that as to the |
228 | applicant, licensee, appointee, or any principal thereof, any |
229 | one or more of the following grounds exist: |
230 | (11) Failure to timely submit data as required by the |
231 | department. |
232 | (12) If a licensee, being charged with an insurance or |
233 | financial-related felony, a crime involving moral turpitude, or |
234 | a crime punishable by imprisonment of 1 year or more under the |
235 | law of any state, territory, or country. |
236 | Section 8. Subsection (8) is added to section 626.8473, |
237 | Florida Statutes, to read: |
238 | 626.8473 Escrow; trust fund.- |
239 | (8) An attorney shall deposit and maintain all funds |
240 | received in connection with transactions in which the attorney |
241 | is serving as a title or real estate settlement agent into a |
242 | separate trust account that is maintained exclusively for funds |
243 | received in connection with such transactions and permit the |
244 | account to be audited by its title insurers, unless maintaining |
245 | funds in the separate account for a particular client would |
246 | violate applicable rules of The Florida Bar. |
247 | Section 9. Section 627.777, Florida Statutes, is amended |
248 | to read: |
249 | 627.777 Approval of forms.- |
250 | (1) A title insurer may not issue or agree to issue any |
251 | form of title insurance commitment, title insurance policy, |
252 | other contract of title insurance, or related form until it is |
253 | filed with and approved by the office. The office may not |
254 | disapprove a title guarantee or policy form on the ground that |
255 | it has on it a blank form for an attorney's opinion on the |
256 | title. |
257 | (2) If the form filed for approval is a form certified and |
258 | adopted by the American Land Title Association at the time of |
259 | filing, the department shall approve or disapprove the form |
260 | within 180 days after receipt. If the form is not a form |
261 | certified by the American Land Title Association at the time of |
262 | filing, the department shall approve or disapprove the form |
263 | within 1 year after receipt. |
264 | (3) When the department approves any form, it shall |
265 | determine if the current rate in effect applies or if the |
266 | coverages require the adoption of a rule pursuant to s. 627.782. |
267 | (4) The department may revoke approval of any form after |
268 | providing 180 days' notice to the title insurer if the basis for |
269 | revocation is that the American Land Title Association has |
270 | decertified a previously approved form. |
271 | (5) An insurer may not achieve a competitive advantage |
272 | over any other insurer, agency, or agent as to rates or forms. |
273 | If a form or rate is approved for an insurer, the department |
274 | shall expeditiously approve the forms of other insurers who |
275 | apply for approval if those forms contain identical coverages, |
276 | rates, or deviations which have been approved under s. 627.783. |
277 | Section 10. Section 627.7815, Florida Statutes, is created |
278 | to read: |
279 | 627.7815 Trade secret documents.-If any person who is |
280 | required to submit a document or other information to the |
281 | department pursuant to this part or by rule or order of the |
282 | department claims that such submission contains a trade secret, |
283 | such person may file with the department a notice of trade |
284 | secret. Failure to do so constitutes a waiver of any claim by |
285 | the person that the requested document or information is a trade |
286 | secret. |
287 | (1) Each page of such document or specific portion of a |
288 | document claimed to be a trade secret must be clearly marked |
289 | "trade secret." |
290 | (2) All material marked "trade secret" must be separated |
291 | from all non-trade-secret material, such as being submitted in a |
292 | separate envelope clearly marked "trade secret." |
293 | (3) When submitting a notice of trade secret to the |
294 | department, the submitting party must include an affidavit |
295 | certifying under oath to the truth of the following statements |
296 | concerning all information and documents that are claimed to be |
297 | trade secrets: |
298 | (a) [I consider/My company considers] this information a |
299 | trade secret that has value and provides an advantage or an |
300 | opportunity to obtain an advantage over those who do not know or |
301 | use it. |
302 | (b) [I have/My company has] taken measures to prevent the |
303 | disclosure of the information to anyone other than those who |
304 | have been selected to have access for limited purposes, and [I |
305 | intend/my company intends] to continue to take such measures. |
306 | (c) The information is not, and has not been, reasonably |
307 | obtainable without [my/our] consent by other persons by use of |
308 | legitimate means. |
309 | (d) The information is not publicly available elsewhere. |
310 | (4) Any data submitted by a title insurance agent or title |
311 | insurer pursuant to s. 627.782 are presumed to be a trade secret |
312 | under this section whether or not so designated. |
313 | Section 11. Subsection (8) of section 627.782, Florida |
314 | Statutes, is amended to read: |
315 | 627.782 Adoption of rates.- |
316 | (8) Each title insurance agency licensed to do business in |
317 | this state and each insurer engaging in direct, retail, or |
318 | affiliated business in this state shall maintain and submit |
319 | information, including revenue, loss, and expense data, as the |
320 | department determines necessary to assist in the analysis of |
321 | title insurance premium rates, title search costs, and the |
322 | condition of the title insurance industry in this state. This |
323 | information must be transmitted to the department annually by |
324 | March 31 of the year after the reporting year. The department |
325 | shall adopt rules to assist in the collection and analysis of |
326 | the data from the title insurance industry. The commission may, |
327 | by rule, require licensees under this part to annually submit |
328 | statistical information, including loss and expense data, as the |
329 | department determines to be necessary to analyze premium rates, |
330 | retention rates, and the condition of the title insurance |
331 | industry. |
332 | Section 12. Section 627.7985, Florida Statutes, is created |
333 | to read: |
334 | 627.7985 Rules as to title insurance.- |
335 | (1) In addition to the authority to adopt rules relating |
336 | to title insurance authorized elsewhere in the Florida Insurance |
337 | Code, the department may adopt rules that: |
338 | (a) Define the license and appointment requirements for |
339 | title insurance agents and agencies. |
340 | (b) Establish penalty guidelines for enforcing the |
341 | requirements of the Florida Insurance Code. |
342 | (c) Describe the fiduciary responsibilities and duties of |
343 | title insurers, title insurance agents, and title insurance |
344 | agencies, including, but not limited to, responsibilities and |
345 | duties related to escrow accounts. |
346 | (d) Identify the responsibilities, duties, and |
347 | designations of the agent in charge of the title insurance |
348 | agency. |
349 | (e) Enable the collection and analysis of information |
350 | relating to the title insurance business submitted by title |
351 | insurers, title insurance agents, and title insurance agencies. |
352 | (f) Set reasonable requirements for the timely recording |
353 | of documents and the delivery of final title insurance policies. |
354 | (g) Set reasonable requirements for the timely |
355 | disbursement of escrow funds unless a written escrow agreement |
356 | specifies a longer holding period. |
357 | (h) Establish rules for the protection, calculation, and |
358 | timely remittance of premiums that are owed to title insurers. |
359 | (i) Prohibit the markup of the cost of any third-party |
360 | goods and services that do not add value. |
361 | (2) In addition to any other penalty provided for under |
362 | the Florida Insurance Code for a violation of a rule, a title |
363 | insurer or title insurance agent or agency is subject to |
364 | suspension or revocation of a certificate of authority or |
365 | license, as may be applicable, for the willful violation of any |
366 | rule. |
367 | Section 13. Section 689.263, Florida Statutes, is created |
368 | to read: |
369 | 689.263 Sale of residential property; settlement statement |
370 | requirements.-A title insurance agent or title insurance agency |
371 | may not disburse funds pursuant to a completed purchase and sale |
372 | transaction or refinance transaction subject to the Real Estate |
373 | Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. ss. 2601 et |
374 | seq., as amended, without requiring a statement of settlement |
375 | costs meeting the following requirements: |
376 | (1) The settlement statement must be executed by the |
377 | buyer, borrower, seller, if any, and settlement agent as defined |
378 | by RESPA. |
379 | (2) If a title insurance premium is to be disbursed, the |
380 | title insurer and the title insurance agent or title insurance |
381 | agency, if any, must be disclosed. |
382 | Section 14. This act shall take effect July 1, 2012. |