Florida Senate - 2014 SB 570
By Senator Galvano
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 shal l 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
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
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
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
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.