(a) As used in this Code section, the term:
(1) "Closing protection letter" means insurance that indemnifies a buyer, lender, or seller in transactions where title to real estate is being conveyed solely against losses not to exceed the amount of the settlement funds only because of the following acts of the person responsible for the disbursement of settlement funds:
(A) Acts of fraud, theft, dishonesty, or negligence in handling settlement funds or documents in connection with a closing, but only to the extent that the acts affect status or priority of title in the real estate insured by the title insurance; and
(B) Failure to comply with written closing instructions by a proposed insured when agreed to by the title agency or title agent relating to title insurance coverage, but only to the extent that the acts affect status or priority of title in real estate insured by the title insurance.
(2) "Settlement funds" means the total funds paid by the buyer, lender, or seller as consideration for the conveyance of real estate.
(b) A title insurer may issue closing protection letters only for real estate transactions where its title insurance policies are issued and where its issuing agent or agency is also responsible for the disbursement of settlement funds.
(c) The premium charged by the title insurer for closing protection letters shall be filed with and approved by the Commissioner in accordance with Chapter 9 of this title and shall not be subject to any agreement requiring a division of the premium collected on behalf of the title insurer.
(d) Companies issuing closing protection letters shall maintain adequate reserves for those closing protection letters pursuant to Chapter 10 of this title.
(e) The Commissioner shall be authorized to promulgate rules and regulations necessary to implement this Code section, which shall include, but shall not be limited to, prescribing standard closing protection letter policy forms.
Section: Previous 33-7-3 33-7-3.1 33-7-4 33-7-5 33-7-6 33-7-7 33-7-8 33-7-8.1 33-7-9 33-7-10 33-7-11 33-7-11.1 33-7-12 33-7-13 33-7-14 NextLast modified: October 14, 2016