Bill Text: GA SB331 | 2011-2012 | Regular Session | Introduced

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Bill Title: Insurance; closing protection letters; provide for premiums; authorize Commissioner of Insurance to promulgate rules and regulations

Spectrum: Moderate Partisan Bill (Republican 4-1)

Status: (Passed) 2012-05-02 - Effective Date [SB331 Detail]

Download: Georgia-2011-SB331-Introduced.html

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12 LC 28 5946

Senate Bill 331

By: Senators Shafer of the 48th, Harbison of the 15th, McKoon of the 29th, Goggans of the 7th and Golden of the 8th

AS PASSED

A BILL TO BE ENTITLED
AN ACT

To amend Title 33 of the Official Code of Georgia Annotated, relating to insurance, so as to provide for the issuance of closing protection letters; to provide for definitions; to provide for premiums regarding such letters; to provide for certain reserves; to authorize the Commissioner of Insurance to promulgate rules and regulations with regard to such matters; to provide for related matters; to provide for an effective date; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Title 33 of the Official Code of Georgia Annotated, relating to insurance, is amended by revising Code Section 33-3-4, relating to kinds of insurance in which insurers may transact, as follows:

"33-3-4.

An insurer which otherwise qualifies to transact insurance in Georgia may be authorized to transact any one kind or combination of kinds of insurance as defined in Chapter 7 of this title except:

(1) A reciprocal insurer shall not transact life insurance;

(2) A Lloyd's insurer shall not transact life insurance; and

(3) A title insurer shall be a stock insurer and shall not be authorized to transact any other class of insurance only title insurance and closing protection letters, pursuant to Code Section 33-7-8.1, except that, if immediately prior to January 1, 1961, any title insurer lawfully held a subsisting certificate of authority granting it the right to transact in Georgia additional classes of insurance other than title insurance, so long as the insurer is otherwise in compliance with this title, the Commissioner shall continue to authorize such insurer to transact the same classes of insurance as those specified in such prior certificate of authority."

SECTION 2.

Said title is further amended by revising Chapter 7, relating to kinds of insurance, limits of risks, and reinsurance, by adding a new Code section to read as follows:

"33-7-8.1.

(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 3.

This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval.

SECTION 4.

All laws and parts of laws in conflict with this Act are repealed.