Florida Senate - 2014                                     SB 570
       By Senator Galvano
       26-00588B-14                                           2014570__
    1                        A bill to be entitled                      
    2         An act relating to title insurance; amending s.
    3         626.8412, F.S.; specifying that only a licensed and
    4         appointed agent or agency is authorized to sell title
    5         insurance; amending s. 626.8413, F.S.; providing
    6         additional limitations on the name that a title
    7         insurance agent or agency may adopt; providing
    8         applicability; amending s. 626.8417, F.S.; conforming
    9         provisions to changes made by the act; amending s.
   10         626.8418, F.S.; revising the application requirements
   11         for a title insurance agency license; deleting certain
   12         bonding requirements and procedures; amending s.
   13         626.8419, F.S.; conforming provisions to changes made
   14         by the act; amending s. 626.8437, F.S.; revising terms
   15         relating to grounds for actions against a licensee or
   16         appointee; amending s. 627.778, F.S.; limiting the
   17         remedies available for the breach of duty arising from
   18         a title insurance contract; amending s. 627.7845,
   19         F.S.; revising terms relating to determination of
   20         insurability and preservation of evidence of title
   21         search and examination; providing effective dates.
   23  Be It Enacted by the Legislature of the State of Florida:
   25         Section 1. Paragraph (a) of subsection (1) of section
   26  626.8412, Florida Statutes, is amended to read:
   27         626.8412 License and appointments required.—
   28         (1) Except as otherwise provided in this part:
   29         (a) Title insurance may be sold only by a licensed and
   30  appointed title insurance agent employed by a licensed and
   31  appointed title insurance agency or employed by a title insurer.
   32         Section 2. Effective October 1, 2014, section 626.8413,
   33  Florida Statutes, is amended to read:
   34         626.8413 Title insurance agents; certain names prohibited.
   35  After October 1, 2014 1985, a title insurance agent or title
   36  insurance agency may as defined in s. 626.841 shall not adopt a
   37  name that which contains the words “title insurance,” “title
   38  company,” “title guaranty,” or “title guarantee,” unless such
   39  words are followed by the word “agent” or “agency” in the same
   40  size and type as the words preceding it them. This section does
   41  not apply to a title insurer acting as an agent for another
   42  title insurer if both insurers hold active certificates of
   43  authority to transact title insurance business in this state and
   44  if both insurers are acting under the names designated on such
   45  certificates.
   46         Section 3. Section 626.8417, Florida Statutes, is amended
   47  to read:
   48         626.8417 Title insurance agent licensure; exemptions.—
   49         (1) A person may not act as a title insurance agent as
   50  defined in s. 626.841 until a valid title insurance agent’s
   51  license has been issued to that person by the department.
   52         (2) An application for license as a title insurance agent
   53  shall be filed with the department on printed forms furnished by
   54  the department.
   55         (3) The department may shall not grant or issue a license
   56  as a title insurance agent to an any individual who is found by
   57  the department it to be untrustworthy or incompetent, who does
   58  not meet the qualifications for examination specified in s.
   59  626.8414, or who does not meet the following qualifications:
   60         (a) Within the 4 years immediately preceding the date of
   61  the application for license, the applicant must have completed a
   62  40-hour classroom course in title insurance, 3 hours of which
   63  are shall be on the subject matter of ethics, as approved by the
   64  department, or must have had at least 12 months of experience in
   65  responsible title insurance duties under the supervision of a
   66  licensed title insurance agent, title insurer, or attorney while
   67  working in the title insurance business as a substantially full
   68  time, bona fide employee of a title insurance agency, title
   69  insurance agent, title insurer, or attorney who conducts real
   70  estate closing transactions and issues title insurance policies
   71  but who is exempt from licensure under subsection (4) pursuant
   72  to paragraph (4)(a). If an applicant’s qualifications are based
   73  upon the periods of employment at responsible title insurance
   74  duties, the applicant must submit, with the license application
   75  for license on a form prescribed by the department, an the
   76  affidavit of the applicant and of the employer affirming setting
   77  forth the period of such employment, that the employment was
   78  substantially full time, and giving a brief abstract of the
   79  nature of the duties performed by the applicant.
   80         (b) The applicant must have passed any examination for
   81  licensure required under s. 626.221.
   82         (4)(a) Title insurers or attorneys duly admitted to
   83  practice law in this state and in good standing with The Florida
   84  Bar are exempt from the provisions of this chapter relating with
   85  regard to title insurance licensing and appointment
   86  requirements.
   87         (5)(b) An insurer may designate a corporate officer of the
   88  insurer to occasionally issue and countersign binders,
   89  commitments, and policies of title insurance policies, or
   90  guarantees of title. The A designated officer is exempt from the
   91  provisions of this chapter relating with regard to title
   92  insurance licensing and appointment requirements while the
   93  officer is acting within the scope of the designation.
   94         (6)(c) If an attorney owns or attorneys own a corporation
   95  or other legal entity that which is doing business as a title
   96  insurance agency, other than an entity engaged in the active
   97  practice of law, the agency must be licensed and appointed as a
   98  title insurance agent.
   99         Section 4. Section 626.8418, Florida Statutes, is amended
  100  to read:
  101         626.8418 Application for title insurance agency license.
  102  Before Prior to doing business in this state as a title
  103  insurance agency, a title insurance agency must meet all of the
  104  following requirements:
  105         (1) the applicant must file with the department an
  106  application for a license as a title insurance agency, on
  107  printed forms furnished by the department, which that includes
  108  all of the following:
  109         (1)(a) The name of each majority owner, partner, officer,
  110  and director of the title insurance agency.
  111         (2)(b) The residence address of each person required to be
  112  listed under subsection (1) paragraph (a).
  113         (3)(c) The name of the title insurance agency and its
  114  principal business address.
  115         (4)(d) The location of each title insurance agency office
  116  and the name under which each agency office conducts or will
  117  conduct business.
  118         (5)(e) The name of each title insurance agent to be in
  119  full-time charge of a title insurance an agency office and
  120  specification of which office.
  121         (6)(f) Such additional information as the department
  122  requires by rule to ascertain the trustworthiness and competence
  123  of persons required to be listed on the application and to
  124  ascertain that such persons meet the requirements of this code.
  125         (2) The applicant must have deposited with the department
  126  securities of the type eligible for deposit under s. 625.52 and
  127  having at all times a market value of not less than $35,000. In
  128  place of such deposit, the title insurance agency may post a
  129  surety bond of like amount payable to the department for the
  130  benefit of any appointing insurer damaged by a violation by the
  131  title insurance agency of its contract with the appointing
  132  insurer. If a properly documented claim is timely filed with the
  133  department by a damaged title insurer, the department may remit
  134  an appropriate amount of the deposit or the proceeds that are
  135  received from the surety in payment of the claim. The required
  136  deposit or bond must be made by the title insurance agency, and
  137  a title insurer may not provide the deposit or bond directly or
  138  indirectly on behalf of the title insurance agency. The deposit
  139  or bond must secure the performance by the title insurance
  140  agency of its duties and responsibilities under the issuing
  141  agency contracts with each title insurer for which it is
  142  appointed. The agency may exchange or substitute other
  143  securities of like quality and value for securities on deposit,
  144  may receive the interest and other income accruing on such
  145  securities, and may inspect the deposit at all reasonable times.
  146  Such deposit or bond must remain unimpaired as long as the title
  147  insurance agency continues in business in this state and until 1
  148  year after termination of all title insurance agency
  149  appointments held by the title insurance agency. The title
  150  insurance agency is entitled to the return of the deposit or
  151  bond together with accrued interest after such year has passed,
  152  if no claim has been made against the deposit or bond. If a
  153  surety bond is unavailable generally, the department may adopt
  154  rules for alternative methods to comply with this subsection.
  155  With respect to such alternative methods for compliance, the
  156  department must be guided by the past business performance and
  157  good reputation and character of the proposed title insurance
  158  agency. A surety bond is deemed to be unavailable generally if
  159  the prevailing annual premium exceeds 25 percent of the
  160  principal amount of the bond.
  161         Section 5. Paragraphs (a) through (c) of subsection (1) of
  162  section 626.8419, Florida Statutes, are amended to read:
  163         626.8419 Appointment of title insurance agency.—
  164         (1) The title insurer engaging or employing the title
  165  insurance agency must file with the department, on forms
  166  furnished by the department, an application certifying that the
  167  proposed title insurance agency meets all of the following
  168  requirements:
  169         (a) The title insurance agency has must have obtained a
  170  fidelity bond in an amount of at least, not less than $50,000,
  171  acceptable to the insurer appointing the agency. If a fidelity
  172  bond is unavailable generally, the department shall must adopt
  173  rules for alternative methods to comply with this paragraph.
  174         (b) The title insurance agency must have obtained errors
  175  and omissions insurance in an amount acceptable to the insurer
  176  appointing the agency. The amount of the coverage must be at
  177  least may not be less than $250,000 per claim and an aggregate
  178  limit with a deductible no greater than $10,000. If errors and
  179  omissions insurance is unavailable generally, the department
  180  shall must adopt rules for alternative methods that to comply
  181  with this paragraph.
  182         (c) Notwithstanding s. 626.8418(2), The title insurance
  183  agency must have obtained a surety bond in an amount of at least
  184  not less than $35,000 made payable to the title insurer or title
  185  insurers appointing the agency. The surety bond must be for the
  186  benefit of any appointing title insurer damaged by a violation
  187  by the title insurance agency of its contract with the
  188  appointing title insurer. If the surety bond is payable to
  189  multiple title insurers, the surety bond must provide that each
  190  title insurer is to be notified if in the event a claim is made
  191  upon the surety bond or the bond is terminated.
  192         Section 6. Subsections (3) and (4) of section 626.8437,
  193  Florida Statutes, are amended to read:
  194         626.8437 Grounds for denial, suspension, revocation, or
  195  refusal to renew license or appointment.—The department shall
  196  deny, suspend, revoke, or refuse to renew or continue the
  197  license or appointment of any title insurance agent or agency,
  198  and it shall suspend or revoke the eligibility to hold a license
  199  or appointment of such person, if it finds that as to the
  200  applicant, licensee, appointee, or any principal thereof, any
  201  one or more of the following grounds exist:
  202         (3) Willful misrepresentation of any title insurance
  203  policy, guarantee of title, binder, or commitment, or willful
  204  deception with regard to any such policy, guarantee, binder, or
  205  commitment, done either in person or by any form of
  206  dissemination of information or advertising.
  207         (4) Demonstrated lack of fitness or trustworthiness to
  208  represent a title insurer in the issuance of its commitments or,
  209  binders, policies of title insurance, or guarantees of title.
  210         Section 7. Subsection (3) is added to section 627.778,
  211  Florida Statutes, to read:
  212         627.778 Limit of risk.—
  213         (3) Only contract remedies are available for the breach of
  214  a duty which arises solely from the terms of a contract of title
  215  insurance.
  216         Section 8. Subsection (2) of section 627.7845, Florida
  217  Statutes, is amended to read:
  218         627.7845 Determination of insurability required;
  219  preservation of evidence of title search and examination.—
  220         (2) The title insurer shall cause the evidence of the
  221  determination of insurability and the reasonable title search or
  222  search of the records of a Uniform Commercial Code filing office
  223  to be preserved and retained in its files or in the files of its
  224  title insurance agent or agency for at least a period of not
  225  less than 7 years after the title insurance commitment or, title
  226  insurance policy, or guarantee of title was issued. The title
  227  insurer or its agent or agency must produce the evidence
  228  required to be maintained under by this subsection at its
  229  offices upon the demand of the office. Instead of retaining the
  230  original evidence, the title insurer or its the title insurance
  231  agent or agency may, in the regular course of business,
  232  establish a system under which all or part of the evidence is
  233  recorded, copied, or reproduced by any photographic,
  234  photostatic, microfilm, microcard, miniature photographic, or
  235  other process that which accurately reproduces or forms a
  236  durable medium for reproducing the original.
  237         Section 9. Except as otherwise expressly provided in this
  238  act, this act shall take effect July 1, 2014.