Bill Text: TX SB372 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to regulation of title insurance.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-02-01 - Referred to Business & Commerce [SB372 Detail]
Download: Texas-2017-SB372-Introduced.html
85R3369 SMT-F | ||
By: Hall | S.B. No. 372 |
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relating to regulation of title insurance. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
ARTICLE 1. TITLE INSURANCE PREMIUMS AND OTHER TITLE INSURANCE | ||
REGULATION | ||
SECTION 1.01. Section 2251.002, Insurance Code, is amended | ||
by adding Subdivision (9) to read as follows: | ||
(9) "Title insurance" has the meaning assigned by | ||
Section 2501.003. | ||
SECTION 1.02. Sections 2251.003(a) and (b), Insurance Code, | ||
are amended to read as follows: | ||
(a) This subchapter and Subchapters B, C, and D apply to: | ||
(1) an insurer to which Article 5.13 applies, other | ||
than the Texas Windstorm Insurance Association, the FAIR Plan | ||
Association, and the Texas Automobile Insurance Plan Association; | ||
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(2) except as provided by Subsection (c), a Lloyd's | ||
plan, reciprocal or interinsurance exchange, and county mutual | ||
insurance company with respect to the lines of insurance described | ||
by Subsection (b); and | ||
(3) a title insurance company. | ||
(b) This subchapter and Subchapters B, C, and D apply to all | ||
lines of the following kinds of insurance written under an | ||
insurance policy or contract issued by an insurer authorized to | ||
engage in the business of insurance in this state: | ||
(1) general liability insurance; | ||
(2) residential and commercial property insurance, | ||
including farm and ranch insurance and farm and ranch owners | ||
insurance; | ||
(3) personal and commercial casualty insurance, | ||
except as provided by Section 2251.004; | ||
(4) medical professional liability insurance; | ||
(5) fidelity, guaranty, and surety bonds other than | ||
criminal court appearance bonds; | ||
(6) personal umbrella insurance; | ||
(7) personal liability insurance; | ||
(8) guaranteed auto protection (GAP) insurance; | ||
(9) involuntary unemployment insurance; | ||
(10) financial guaranty insurance; | ||
(11) inland marine insurance; | ||
(12) rain insurance; | ||
(13) hail insurance on farm crops; | ||
(14) personal and commercial automobile insurance; | ||
(15) multi-peril insurance; [ |
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(16) identity theft insurance issued under Chapter | ||
706; and | ||
(17) title insurance. | ||
SECTION 1.03. Section 2251.052, Insurance Code, is amended | ||
by adding Subsection (f) to read as follows: | ||
(f) In setting rates for title insurance, an insurer shall | ||
also consider all relevant income and expenses of title insurance | ||
agents attributable to engaging in the business of title insurance | ||
in this state. | ||
SECTION 1.04. Section 2703.003, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2703.003. PAYMENT OF PREMIUMS; DIVISION OF PREMIUM. | ||
(a) The premium for a title insurance policy or for another form | ||
prescribed or approved by the commissioner shall be paid in the due | ||
and ordinary course of business. | ||
(b) Notwithstanding any other law, the commissioner may not | ||
regulate the division of premium between a title insurance company | ||
and a title insurance agent. | ||
SECTION 1.05. The heading to Subchapter D, Chapter 2703, | ||
Insurance Code, is amended to read as follows: | ||
SUBCHAPTER D. [ |
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REPORTING | ||
SECTION 1.06. Section 2703.151, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2703.151. [ |
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(a) Except as provided by Subsection (b), [ |
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insurance policies are governed by Subchapters A, B, C, and D, | ||
Chapter 2251 [ |
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(b) A title insurance company is not required to file [ |
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reinsurance between title insurance companies. Title insurance | ||
companies may establish the premium rates in amounts to which the | ||
companies agree. | ||
(c) Except for a premium charged for reinsurance, a premium | ||
may not be charged for a title insurance policy or for another | ||
prescribed or approved form at a rate different than the rate filed | ||
with [ |
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2251. | ||
SECTION 1.07. The heading to Section 2703.153, Insurance | ||
Code, is amended to read as follows: | ||
Sec. 2703.153. DATA COLLECTION [ |
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SECTION 1.08. Sections 2703.153(a), (c), and (d), Insurance | ||
Code, are amended to read as follows: | ||
(a) Each title insurance company and title insurance agent | ||
engaged in the business of title insurance in this state shall | ||
annually submit to the department, as required by the department | ||
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containing information relating to: | ||
(1) loss experience; | ||
(2) expense of operation; and | ||
(3) other material matters. | ||
(c) Not less frequently than once every five years, the | ||
commissioner shall evaluate the information required under this | ||
section to determine whether the department needs additional or | ||
different information or no longer needs certain information [ |
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(d) A title insurance company or a title insurance agent | ||
aggrieved by a department requirement concerning the submission of | ||
information may bring a suit in a district court in Travis County | ||
alleging that the request for information: | ||
(1) is unduly burdensome; or | ||
(2) is not a request for information material to a | ||
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be the subject of the periodic hearing and is not a request | ||
reasonably designed to lead to the discovery of that information. | ||
SECTION 1.09. The heading to Section 2751.051, Insurance | ||
Code, is amended to read as follows: | ||
Sec. 2751.051. [ |
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FORMS. | ||
SECTION 1.10. Section 2751.051, Insurance Code, is amended | ||
by amending Subsections (a) and (b) and adding Subsection (a-1) to | ||
read as follows: | ||
(a) The commissioner shall, in the manner prescribed by this | ||
subchapter, [ |
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personal property title insurance [ |
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(a-1) Premium rates for personal property title insurance | ||
are governed by Subchapters A, B, C, and D, Chapter 2251. | ||
(b) A premium may not be charged for a personal property | ||
title insurance policy or for another prescribed or approved form | ||
at a rate different than the rate filed with [ |
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ARTICLE 2. CONFORMING AMENDMENTS | ||
SECTION 2.01. Section 2501.003(8), Insurance Code, is | ||
amended to read as follows: | ||
(8) "Premium" means the premium rates charged for a | ||
title insurance policy or other form prescribed or approved | ||
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(A) title examination and closing the | ||
transaction, regardless of whether the examination or closing is | ||
performed by an attorney; and | ||
(B) issuing the policy or form. | ||
SECTION 2.02. Section 2551.204(d), Insurance Code, is | ||
amended to read as follows: | ||
(d) The amount, handling, and distribution of any reserves | ||
required under Subsection (c)(2) are subject to the control and | ||
discretion of the department and are reviewable in judicial | ||
proceedings governed by rules applicable to review of rates under | ||
Section 2703.202, as it existed before its repeal by the 85th | ||
Legislature, Regular Session, 2017 [ |
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SECTION 2.03. Section 2551.351(a), Insurance Code, is | ||
amended to read as follows: | ||
(a) A foreign or domestic corporation forfeits any right to | ||
engage in business in this state if the corporation: | ||
(1) issues any form of title insurance policy, or any | ||
other adopted or approved form, on real property in this state other | ||
than a form prescribed by the department; | ||
(2) charges any premium rate on an owner, mortgagee, | ||
or other title insurance policy, or on any other adopted or approved | ||
form, on real property in this state other than a premium rate filed | ||
under Chapter 2251 [ |
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(3) otherwise engages in the business of title | ||
insurance in relation to real property in this state on a form [ |
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commissioner or for a premium rate not filed under Chapter 2251. | ||
SECTION 2.04. Section 2552.007, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2552.007. OTHER PREMIUM OR FEE PROHIBITED. Attorney's | ||
title insurance may not be issued for any premium or fee other than | ||
the applicable [ |
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the commissioner under Chapter 2251 [ |
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SECTION 2.05. Section 2602.210(a), Insurance Code, is | ||
amended to read as follows: | ||
(a) A title insurance company is entitled to recover in its | ||
rates for the succeeding calendar year amounts paid in assessments | ||
not to exceed one percent of the company's net direct written | ||
premiums and may include those amounts, less any refund, as an | ||
expense of operation in a rate filing made under Chapter 2251. [ |
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SECTION 2.06. Section 2651.012(b), Insurance Code, is | ||
amended to read as follows: | ||
(b) The unencumbered assets required under this section are | ||
reserves for contingencies. The reserves must be deducted from | ||
premiums for purposes of proceedings conducted with respect to | ||
premium rates [ |
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only be spent or released: | ||
(1) as permitted by the commissioner if the agent is | ||
declared impaired; | ||
(2) if the agent merges or consolidates with another | ||
agent who maintains the amount of unencumbered assets that would be | ||
required for the survivor of the merger or consolidation; | ||
(3) if the agent surrenders the agent's license under | ||
Section 2651.201; | ||
(4) if the agent is liquidated; or | ||
(5) if the agent's license is revoked. | ||
SECTION 2.07. The heading to Subchapter E, Chapter 2703, | ||
Insurance Code, is amended to read as follows: | ||
SUBCHAPTER E. PROCEDURES REGARDING [ |
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FORMS[ |
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SECTION 2.08. Section 2703.203, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2703.203. PERIODIC HEARING. The commissioner shall | ||
hold a public hearing not earlier than July 1 after the fifth | ||
anniversary of the closing of a hearing held under this chapter to | ||
consider [ |
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regulating the business of title insurance that an association, | ||
title insurance company, or title insurance agent[ |
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be considered or that the commissioner determines necessary to | ||
consider. | ||
SECTION 2.09. Section 2703.206, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2703.206. COMMISSIONER AUTHORITY TO HOLD HEARINGS AS | ||
NECESSARY. At any time, the commissioner may order a public hearing | ||
to consider [ |
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to regulating the business of title insurance as the commissioner | ||
determines necessary or proper. | ||
SECTION 2.10. Section 2703.207, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2703.207. NOTICE OF CERTAIN HEARINGS. Not later than | ||
the 60th day before the date of a hearing under Section [ |
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2703.203[ |
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be considered at the hearing shall be: | ||
(1) sent directly to all parties to the previous | ||
hearing conducted under Section [ |
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2703.206, if the hearing was conducted as a contested case hearing; | ||
and | ||
(2) published in the Texas Register and on the | ||
department's Internet website. | ||
SECTION 2.11. Section 2703.208(a), Insurance Code, is | ||
amended to read as follows: | ||
(a) An addition or amendment to the Basic Manual of Rules, | ||
Rates[ |
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of Texas may be proposed and adopted by reference by publishing | ||
notice of the proposal or adoption by reference in the Texas | ||
Register. | ||
SECTION 2.12. Section 2751.053(a), Insurance Code, is | ||
amended to read as follows: | ||
(a) Before the commissioner may adopt [ |
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under this chapter, the department must provide reasonable notice | ||
and a hearing must be afforded to title insurance companies, title | ||
insurance agents, and the public. | ||
SECTION 2.13. Section 2751.054, Insurance Code, is amended | ||
to read as follows: | ||
Sec. 2751.054. COMMISSIONER ORDER. [ |
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the 90th day after the date of a hearing under Section 2751.053, the | ||
commissioner shall issue an order prescribing the [ |
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to be used in connection with personal property title insurance | ||
policies under this chapter. | ||
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SECTION 2.14. The heading to Section 2751.055, Insurance | ||
Code, is amended to read as follows: | ||
Sec. 2751.055. REVISIONS TO [ |
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SECTION 2.15. Section 2751.055(a), Insurance Code, is | ||
amended to read as follows: | ||
(a) A title insurance company may apply to the department in | ||
the manner prescribed by the commissioner for approval of a new or | ||
revised personal property title insurance form [ |
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disapprove an application after a hearing conducted in the manner | ||
prescribed by Section 2751.053. | ||
ARTICLE 3. REPEALER | ||
SECTION 3.01. Sections 2703.152, 2703.201, 2703.202, | ||
2703.204, and 2751.052, Insurance Code, are repealed. | ||
ARTICLE 4. TRANSITION; EFFECTIVE DATE | ||
SECTION 4.01. The changes in law made by this Act affecting | ||
premium rates for title insurance apply only to a premium rate in | ||
effect on and after January 1, 2018. A premium rate in effect | ||
before January 1, 2018, is governed by the law as it existed | ||
immediately before the effective date of this Act, and that law is | ||
continued in effect for that purpose. | ||
SECTION 4.02. This Act takes effect September 1, 2017. |