Florida Senate - 2014                              CS for SB 570
       By the Committee on Banking and Insurance; and Senator Galvano
       597-01640-14                                           2014570c1
    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. 627.782, F.S.;
   19         revising the date that certain information relating to
   20         title insurance rates must be submitted to the Office
   21         of Insurance Regulation by title insurance agencies
   22         and insurers; amending s. 627.7845, F.S.; revising
   23         terms relating to determination of insurability and
   24         preservation of evidence of title search and
   25         examination; providing effective dates.
   27  Be It Enacted by the Legislature of the State of Florida:
   29         Section 1. Paragraph (a) of subsection (1) of section
   30  626.8412, Florida Statutes, is amended to read:
   31         626.8412 License and appointments required.—
   32         (1) Except as otherwise provided in this part:
   33         (a) Title insurance may be sold only by a licensed and
   34  appointed title insurance agent employed by a licensed and
   35  appointed title insurance agency or employed by a title insurer.
   36         Section 2. Effective October 1, 2014, section 626.8413,
   37  Florida Statutes, is amended to read:
   38         626.8413 Title insurance agents; certain names prohibited.
   39  After October 1, 2014 1985, a title insurance agent or title
   40  insurance agency may as defined in s. 626.841 shall not adopt a
   41  name that which contains the words “title insurance,” “title
   42  company,” “title guaranty,” or “title guarantee,” unless such
   43  words are followed by the word “agent” or “agency” in the same
   44  size and type as the words preceding it them. This section does
   45  not apply to a title insurer acting as an agent for another
   46  title insurer if both insurers hold active certificates of
   47  authority to transact title insurance business in this state and
   48  if both insurers are acting under the names designated on such
   49  certificates.
   50         Section 3. Section 626.8417, Florida Statutes, is amended
   51  to read:
   52         626.8417 Title insurance agent licensure; exemptions.—
   53         (1) A person may not act as a title insurance agent as
   54  defined in s. 626.841 until a valid title insurance agent’s
   55  license has been issued to that person by the department.
   56         (2) An application for license as a title insurance agent
   57  shall be filed with the department on printed forms furnished by
   58  the department.
   59         (3) The department may shall not grant or issue a license
   60  as a title insurance agent to an any individual who is found by
   61  the department it to be untrustworthy or incompetent, who does
   62  not meet the qualifications for examination specified in s.
   63  626.8414, or who does not meet the following qualifications:
   64         (a) Within the 4 years immediately preceding the date of
   65  the application for license, the applicant must have completed a
   66  40-hour classroom course in title insurance, 3 hours of which
   67  are shall be on the subject matter of ethics, as approved by the
   68  department, or must have had at least 12 months of experience in
   69  responsible title insurance duties under the supervision of a
   70  licensed title insurance agent, title insurer, or attorney while
   71  working in the title insurance business as a substantially full
   72  time, bona fide employee of a title insurance agency, title
   73  insurance agent, title insurer, or attorney who conducts real
   74  estate closing transactions and issues title insurance policies
   75  but who is exempt from licensure under subsection (4) pursuant
   76  to paragraph (4)(a). If an applicant’s qualifications are based
   77  upon the periods of employment at responsible title insurance
   78  duties, the applicant must submit, with the license application
   79  for license on a form prescribed by the department, an the
   80  affidavit of the applicant and of the employer affirming setting
   81  forth the period of such employment, that the employment was
   82  substantially full time, and giving a brief abstract of the
   83  nature of the duties performed by the applicant.
   84         (b) The applicant must have passed any examination for
   85  licensure required under s. 626.221.
   86         (4)(a) Title insurers or attorneys duly admitted to
   87  practice law in this state and in good standing with The Florida
   88  Bar are exempt from the provisions of this chapter relating with
   89  regard to title insurance licensing and appointment
   90  requirements.
   91         (5)(b) An insurer may designate a corporate officer of the
   92  insurer to occasionally issue and countersign binders,
   93  commitments, and policies of title insurance policies, or
   94  guarantees of title. The A designated officer is exempt from the
   95  provisions of this chapter relating with regard to title
   96  insurance licensing and appointment requirements while the
   97  officer is acting within the scope of the designation.
   98         (6)(c) If an attorney owns or attorneys own a corporation
   99  or other legal entity that which is doing business as a title
  100  insurance agency, other than an entity engaged in the active
  101  practice of law, the agency must be licensed and appointed as a
  102  title insurance agent.
  103         Section 4. Section 626.8418, Florida Statutes, is amended
  104  to read:
  105         626.8418 Application for title insurance agency license.
  106  Before Prior to doing business in this state as a title
  107  insurance agency, a title insurance agency must meet all of the
  108  following requirements:
  109         (1) the applicant must file with the department an
  110  application for a license as a title insurance agency, on
  111  printed forms furnished by the department, which that includes
  112  all of the following:
  113         (1)(a) The name of each majority owner, partner, officer,
  114  and director of the title insurance agency.
  115         (2)(b) The residence address of each person required to be
  116  listed under subsection (1) paragraph (a).
  117         (3)(c) The name of the title insurance agency and its
  118  principal business address.
  119         (4)(d) The location of each title insurance agency office
  120  and the name under which each agency office conducts or will
  121  conduct business.
  122         (5)(e) The name of each title insurance agent to be in
  123  full-time charge of a title insurance an agency office and
  124  specification of which office.
  125         (6)(f) Such additional information as the department
  126  requires by rule to ascertain the trustworthiness and competence
  127  of persons required to be listed on the application and to
  128  ascertain that such persons meet the requirements of this code.
  129         (2) The applicant must have deposited with the department
  130  securities of the type eligible for deposit under s. 625.52 and
  131  having at all times a market value of not less than $35,000. In
  132  place of such deposit, the title insurance agency may post a
  133  surety bond of like amount payable to the department for the
  134  benefit of any appointing insurer damaged by a violation by the
  135  title insurance agency of its contract with the appointing
  136  insurer. If a properly documented claim is timely filed with the
  137  department by a damaged title insurer, the department may remit
  138  an appropriate amount of the deposit or the proceeds that are
  139  received from the surety in payment of the claim. The required
  140  deposit or bond must be made by the title insurance agency, and
  141  a title insurer may not provide the deposit or bond directly or
  142  indirectly on behalf of the title insurance agency. The deposit
  143  or bond must secure the performance by the title insurance
  144  agency of its duties and responsibilities under the issuing
  145  agency contracts with each title insurer for which it is
  146  appointed. The agency may exchange or substitute other
  147  securities of like quality and value for securities on deposit,
  148  may receive the interest and other income accruing on such
  149  securities, and may inspect the deposit at all reasonable times.
  150  Such deposit or bond must remain unimpaired as long as the title
  151  insurance agency continues in business in this state and until 1
  152  year after termination of all title insurance agency
  153  appointments held by the title insurance agency. The title
  154  insurance agency is entitled to the return of the deposit or
  155  bond together with accrued interest after such year has passed,
  156  if no claim has been made against the deposit or bond. If a
  157  surety bond is unavailable generally, the department may adopt
  158  rules for alternative methods to comply with this subsection.
  159  With respect to such alternative methods for compliance, the
  160  department must be guided by the past business performance and
  161  good reputation and character of the proposed title insurance
  162  agency. A surety bond is deemed to be unavailable generally if
  163  the prevailing annual premium exceeds 25 percent of the
  164  principal amount of the bond.
  165         Section 5. Paragraphs (a) through (c) of subsection (1) of
  166  section 626.8419, Florida Statutes, are amended to read:
  167         626.8419 Appointment of title insurance agency.—
  168         (1) The title insurer engaging or employing the title
  169  insurance agency must file with the department, on forms
  170  furnished by the department, an application certifying that the
  171  proposed title insurance agency meets all of the following
  172  requirements:
  173         (a) The title insurance agency has must have obtained a
  174  fidelity bond in an amount of at least, not less than $50,000,
  175  acceptable to the insurer appointing the agency. If a fidelity
  176  bond is unavailable generally, the department shall must adopt
  177  rules for alternative methods to comply with this paragraph.
  178         (b) The title insurance agency must have obtained errors
  179  and omissions insurance in an amount acceptable to the insurer
  180  appointing the agency. The amount of the coverage must be at
  181  least may not be less than $250,000 per claim and an aggregate
  182  limit with a deductible no greater than $10,000. If errors and
  183  omissions insurance is unavailable generally, the department
  184  shall must adopt rules for alternative methods that to comply
  185  with this paragraph.
  186         (c) Notwithstanding s. 626.8418(2), The title insurance
  187  agency must have obtained a surety bond in an amount of at least
  188  not less than $35,000 made payable to the title insurer or title
  189  insurers appointing the agency. The surety bond must be for the
  190  benefit of any appointing title insurer damaged by a violation
  191  by the title insurance agency of its contract with the
  192  appointing title insurer. If the surety bond is payable to
  193  multiple title insurers, the surety bond must provide that each
  194  title insurer is to be notified if in the event a claim is made
  195  upon the surety bond or the bond is terminated.
  196         Section 6. Subsections (3) and (4) of section 626.8437,
  197  Florida Statutes, are amended to read:
  198         626.8437 Grounds for denial, suspension, revocation, or
  199  refusal to renew license or appointment.—The department shall
  200  deny, suspend, revoke, or refuse to renew or continue the
  201  license or appointment of any title insurance agent or agency,
  202  and it shall suspend or revoke the eligibility to hold a license
  203  or appointment of such person, if it finds that as to the
  204  applicant, licensee, appointee, or any principal thereof, any
  205  one or more of the following grounds exist:
  206         (3) Willful misrepresentation of any title insurance
  207  policy, guarantee of title, binder, or commitment, or willful
  208  deception with regard to any such policy, guarantee, binder, or
  209  commitment, done either in person or by any form of
  210  dissemination of information or advertising.
  211         (4) Demonstrated lack of fitness or trustworthiness to
  212  represent a title insurer in the issuance of its commitments or,
  213  binders, policies of title insurance, or guarantees of title.
  214         Section 7. Subsection (3) is added to section 627.778,
  215  Florida Statutes, to read:
  216         627.778 Limit of risk.—
  217         (3) Only contract remedies are available for the breach of
  218  a duty which arises solely from the terms of a contract of title
  219  insurance or an instrument issued pursuant to s. 627.786(3).
  220         Section 8. Subsection (8) of section 627.782, Florida
  221  Statutes, is amended to read:
  222         627.782 Adoption of rates.—
  223         (8) Each title insurance agency and insurer licensed to do
  224  business in this state and each insurer’s direct or retail
  225  business in this state shall maintain and submit information,
  226  including revenue, loss, and expense data, as the office
  227  determines necessary to assist in the analysis of title
  228  insurance premium rates, title search costs, and the condition
  229  of the title insurance industry in this state. Such This
  230  information shall must be transmitted to the office annually by
  231  May March 31 of the year after the reporting year. The
  232  commission shall adopt rules relating to regarding the
  233  collection and analysis of the data from the title insurance
  234  industry.
  235         Section 9. Subsection (2) of section 627.7845, Florida
  236  Statutes, is amended to read:
  237         627.7845 Determination of insurability required;
  238  preservation of evidence of title search and examination.—
  239         (2) The title insurer shall cause the evidence of the
  240  determination of insurability and the reasonable title search or
  241  search of the records of a Uniform Commercial Code filing office
  242  to be preserved and retained in its files or in the files of its
  243  title insurance agent or agency for at least a period of not
  244  less than 7 years after the title insurance commitment or, title
  245  insurance policy, or guarantee of title was issued. The title
  246  insurer or its agent or agency must produce the evidence
  247  required to be maintained under by this subsection at its
  248  offices upon the demand of the office. Instead of retaining the
  249  original evidence, the title insurer or its the title insurance
  250  agent or agency may, in the regular course of business,
  251  establish a system under which all or part of the evidence is
  252  recorded, copied, or reproduced by any photographic,
  253  photostatic, microfilm, microcard, miniature photographic, or
  254  other process that which accurately reproduces or forms a
  255  durable medium for reproducing the original.
  256         Section 10. Except as otherwise expressly provided in this
  257  act, this act shall take effect July 1, 2014.