SECTION III -- RATE RULES

• Access Endorsement R-30
• Additional Chains of Title R-9
• Additional Insured Endorsement R-33
• Amendment of Exception as to Area, Boundaries, etc. R-16
• Amendment of or Endorsement Amending Exception in Mortgagee Policy or Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) R-19
• Applicable Only as Provided in Procedural Rule P-29 R-24
• Commitment Fee R-23
• Commitment for Title Insurance R-12
• Commitment for Title Insurance to the Federal Deposit Insurance Corporation, Office of Thrift Supervision, or Resolution Trust Corporation R-25
• Contiguity Endorsement R-32
• Creation of New Loan Contemplated by Construction Lender R-18
• Equity Loan Mortgage Endorsement and Supplemental Coverage Equity Loan Mortgage Endorsement R-28
• Foreclosed Properties R-14
• Limited Pre-Foreclosure Policy (Form T-40) and Limited Pre-Foreclosure Policy Down Date Endorsement (Form T-41)
• Mortgagee Policies Covering First and Subordinate Liens Issued Simultaneously R-7
• Mortgagee Policy R-4
• Mortgagee Policy Endorsement R-11
• Mortgagee Policy on a Loan to Take Up, Renew, Extend or Satisfy an Existing Lien(s) R-8
• Mortgagee Title Policy Binder on Interim Construction Loan R-13
• Multiple Owner Policies on Same Land R-21
• Non-Imputation Endorsement R-31
• Owner and Leasehold Policies R-22
• Owner Policies-City Subdivision, Acreage Subdivisions, Industrial Tracts R-10
• Owner Policy R-3
• Owner Policy After Construction Period R-20
• Owner Policy Endorsement R-15
• Policy Forms for Use by United States Government R-17
• Premium for Commitment for Title Insurance to the Federal Deposit Insurance Corporation, Office of Thrift Supervision, or Resolution Trust Corporation  R-25
• Premium for Equity Loan Mortgage Endorsement (T-42) and supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) R-28
• Premium for Limited Pre-Foreclosure Policy (Form T-40) Limited Pre-Foreclosure Policy Downdate Endorsement (Form T-41) R-26
• Restrictions, Encroachments, Minerals Endorsement (T-19)and Restrictions, Encroachments, Minerals Endorsement-Owner Policy (T-19.1) R-29
• Rebates and Discounts R-2
• Schedule of Basic Premium Rates R-1
• Simultaneous Issuance of Owner and Mortgagee Policies R-5
• Subsequent Issuance of Mortgagee Policy R-6
• Texas Residential Limited Coverage Junior Mortgagee Policy R-27

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RATES EFFECTIVE FEBRUARY 1, 2007

Premiums shall be calculated as follows for policies in excess of $100,000:

1. For policies of $100,001 - $1,000,000
   
   Basic Premium  

   1. Subtract $100,000 from policy amount.

   2. Multiply result in 1.(1)by $.00534 and round to nearest whole dollar.

   3. Add $843 to result in 1.(2).  
       

2. For policies of $1,000,001 - $5,000,000
   
   Basic Premium

   1. Subtract $1,000,000 from policy amount.

   2. Multiply result in 2.(1) by $.00439 and round to nearest whole dollar.

   3. Add $5,649 to result in 2.(2).
      

3. For policies of $5,000,001 - $15,000,000

   Basic Premium

   1. Subtract $5,000,000 from policy amount.

   2. Multiply result in 3.(1) by $.00362 and round to nearest whole dollar.

   3. Add $23,209 in 3.(2).
       

4. For policies of $15,000,001 - $25,000,000

Basic Premium

1. Subtract $15,000,000 from policy amount.

2. Multiply result in 4.(1) by $.00257 and round to nearest whole dollar.

3. Add $59,409 to result in 4.(2).

     5.   For policies in excess of $25,000,000
 

           Basic Premium

1. Subtract $25,000,000 from policy amount.

2. Multiply result in 5.(1) by $.00154 and round to nearest whole dollar.

3. Add $85,109 to result in 5.(2).

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IN NO EVENT MAY ANY POLICY OR ENDORSEMENT FORMS CONTAIN COVERAGE NOT EXPRESSLY AUTHORIZED BY THESE RULES.

R-1. Schedule of Basic Premium Rates - Schedule of Basic Premium Rates - The Schedule of Basic Premium Rates for Title Insurance shall apply to all policies, unless the same be specified in other applicable Rate Rules.

In no event shall two or more Rate Rules be combined in the calculation of the premium for the subject transaction, unless one Basic Rate on the policy in the largest amount is charged, except as provided for in Rules R-5 and R-14. The Basic Premium Rates for policies include the charge for title insurance, title examination and closing the transaction (see Definitions in Rule P-1).

No portion, split or percentage of the premium shall be paid either directly or indirectly for title insurance, title examination or closing the transaction to any person unless there shall have been timely compliance with Rule P-21 and  P-22.

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R-2. Rebates and Discounts - No Company shall charge for a policy in one transaction and withhold  issuance of a policy thereon, nor shall any Company charge a premium for a policy in one transaction  and apply the charged premium in a subsequent transaction, except when same covers identical land  to that contained in the initial conveyance, and when same shall have been consented to by the  parties to all conveyances involved, which consent may be provided for in the contract(s) on which the  transaction is based, or may be given in a separate written instrument, or may be evidenced by the  acceptance and signing of a closing statement clearly setting forth application of the premium charge  as agreed by the parties to the transaction(s). The phrase "one transaction" as used in this rule may  include more than one conveyance provided: (i) all grantors and grantees have acknowledged in writing the method of application for premium or premiums to be collected, and (ii) all instruments of  conveyance relating to the subject property which is to be insured are unconditionally delivered  simultaneously. Each company shall remit the portion of the premium due to the title Insurance Company no later than the 15th day of the second month following the month in which the premium was collected. The provisions of this rule shall also apply to any escrow officer who remits directly to a title insurance company. A company shall not issue or deliver a policy, binder or endorsement until a rate therefore has been adopted by the Commissioner.  The company must collect the full charge for such form, except as follows:  

         (a) When a Mortgagee Policy is issued in the manner provided in Rule P-8.b., the premium for the Mortgagee Policy may be paid in installments if the following conditions are met:  

                 (1) The face amount of the policy shall be $5,000,000 or more.  

                 (2) The premium for the Mortgagee Policy shall be determined on the date of issuance thereof. As the loan which is the subject of the policy is disbursed, a fraction of the premium for the policy equal to the fraction of the loan then funded shall be paid and upon payment thereof the amount of the coverage of the Mortgagee Policy shall increase by the amount of such funding.  

                 (3) The down date endorsement procedure described in rule P-9.b.(4) must be used in connection with such Mortgagee Policy.  

If any one of the above conditions is not met with respect to such Mortgagee Policy, the remaining premium due and owing therefore shall be immediately due and payable.  

         (b) When an Owner Policy meets the requirements of paragraph (a) above, and is issued in the manner provided in Rule P-8.a., and is issued simultaneously with a Mortgagee Policy as provided in  Rule R-5.B., the amount of coverage of said Owner Policy shall increase in an amount equal to, and  contemporaneously with, the increase in the coverage of said Mortgagee Policy.  

        (c) When an Owner Policy is issued in the manner provided in Rule P-8.a., but is not issued  simultaneously with a Mortgagee Policy as provided in Rule R-5.B., the premium for the Owner Policy  may be paid in installments if the following conditions are met:  

                 (1) The face amount of the policy shall be $5,000,000 or more.  

                 (2) The premium for the Owner Policy shall be determined on the date of issuance thereof. The  premium for the Owner Policy paid upon issuance thereof shall be the portion of the total premium  allocable to the liability under the Owner Policy as shown in the liability paragraph prescribed by Rule P-8.a.(1). As the contemplated improvements which are the subject of the Owner Policy are made, a fraction of the premium for the policy equal to the amount actually expended by the Insured in improvements since the last premium payment date shall be paid periodically and in no event later than completion thereof, and upon payment of said premium fraction the amount of the coverage of the Owner Policy shall increase by the said amount expended in improvements.  

                 (3) The down date endorsement procedure described in Rule P-9.a.(3) must be used in  connection with such Owner Policy.

 If any one of the above conditions is not met with respect to such Owner Policy, the remaining premium due and owing therefore shall be immediately due and payable.

         (d)  When a qualified intermediary under Internal Revenue Code §1031 takes title on behalf of the ultimate owner (the person making the exchange and receiving the tax benefit), Schedule A of the policy should be prepared as set out in Procedural Rule P-63. 

                An issued policy should not be altered or endorsed after the deed from the intermediary to the ultimate owner, to change the insured to reflect the name of the ultimate owner. This Rate Rule R-2 strictly prohibits passing through the title insurance premium on multiple conveyances unless proper disclosure is made and the deeds to all conveyances are delivered to the title or closing agent simultaneously and without condition.  However, if title coverage is issued as outlined in Procedural Rule P-63, the provisions of R-2 as to the pass through premium are not applicable because the policy is issued in the transaction in which the premium was collected.

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R-3. Owner's Policy - Improvements Subsequently Added—If improvements are subsequently added, a new Owner’s Policy may be issued in the aggregate amount of the original Owner’s Policy or Owner’s Policies, plus the cost of improvements, as provided in Rule P-66. 

1)   If a single original Owner’s Policy was issued, the premium for the new policy shall be the Basic Rate less the premium which was paid for the surrendered, original policy.

2)   If multiple original Owner’s Policies were issued, the premium for the new policy shall be at the Basic Rate less the currently promulgated Basic Rate for the aggregate of the surrendered original policies.

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R-4. Mortgagee Policy - When a previously issued mortgagee policy insuring a variable rate mortgage is reissued (or endorsed), effective as of the date of the original Mortgagee Policy, increasing the face amount of the Mortgagee Policy from the original principal amount of the loan to an amount not to exceed one hundred twenty-five percent (125%) of the original principal amount the additional premium is calculated as follows:

a.   The premium on the increased Policy Amount calculated at the Basic Rate (existing on the date of the original Mortgagee Policy) but less the greater of the amount of the premium previously charged for: (i) the original Mortgagee Policy, or (ii) the Owner Policy.

b.   If such original Mortgagee Policy was issued as a simultaneous issue; no credit shall be given for the simultaneous issue premium charge.

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R-5. Simultaneous Issuance of Owner and Mortgagee Policies

A. Except as otherwise provided in this rule, when an Owner Policy and Mortgagee Policy(ies) are issued simultaneously, bearing the same date, and covering the same land, or a portion thereof, covered by the Owner Policy and covering no other land, the Owner Policy showing the lien(s) as an exception therein, the Owner Policy shall be issued at the Basic Rate, and the premium for the Mortgagee Policy(ies) shall be $100.00 each. Should the amount of the Mortgagee Policy(ies) exceed the amount of the Owner Policy, the Basic Rate shall be charged for the Owner Policy, and the premium for the Mortgagee Policy(ies) shall be at the Basic Rate plus $100.00 for each Mortgagee Policy, less the Basic Rate for the Owner Policy. (In the application of this rule, if an Owner Policy has been previously issued covering the identical property to be covered by the Owner Policy to be issued and provided that the Owner Policy is to be issued in accordance with P-8.a and within four (4) years after the date of the previously issued Owner Policy and that there has been no change in ownership of such property, credit shall be given against the premium of the Owner Policy to be issued for the amount of the premium paid by any party for said previously issued Owner Policy. In no event shall the premium collected for such Owner Policy be less than the regular minimum promulgated rate for an Owner Policy.)

THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Mortgagee Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Mortgagee Policies must be issued at the Basic Rate.

B. When an Owner Policy meeting the requirements of Rule R-2(b) is issued in the manner provided in Rule P-8.a., and is issued simultaneously with a Mortgagee Policy described in Rule R-2(a), bearing the same date, and covering the same land covered by the Mortgagee Policy, or a portion thereof, and covering no other land, the premium for the Owner Policy shall be $100.00. Should the amount of the Owner Policy exceed the amount of the Mortgagee Policy, the premium for the Owner Policy shall be at the Basic Rate plus $100.00 less the Basic Rate (to be paid as provided in Rule R-2(a)) for the Mortgagee Policy. In the application of this rule, if an Owner Policy has been previously issued covering the identical property to be covered by the Owner Policy to be issued and provided there has been no change in ownership of such property, credit shall be given against the premium for the Mortgagee Policy to be issued for the amount of the premium paid for said previously issued Owner Policy.

C.  An insured under an existing Owner Policy not issued containing P-8 exceptions may, after completion of improvements on the property insured, turn in the existing Owner Policy and receive credit for the premium previously paid when purchasing a new Owner Policy in an amount greater than the existing Owner Policy.  A Mortgagee Policy may be simultaneously issued for the premium established in R-5.A.  In no event may the Owner Policy be issued for less than the minimum promulgated basic premium rate.  This subsection applies only if (1) the land is residential property, (2) the existing Owner Policy covered the identical land to be covered by the new Owner Policy to be issued, (3) the new Owner Policy is to be issued within four (4) years after the date of the existing Owner Policy, and (4) there has been no change in ownership of such land.

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R-6. Subsequent Issuance of Mortgagee Policy

a. Subsequent to Owner Policy - When a Mortgagee Policy(ies) is requested, subsequent to the issuance of an Owner Policy which excepted to the Vendor's Lien, the premium shall be one-half the Basic Rate. The lien to be insured must be as originally created, and excepted to in the Owner Policy, and not an extension or rearrangement thereof. Such Mortgagee Policy(ies) shall be issued in the amount of the current unpaid balance of said indebtedness. The Company shall be furnished such evidence as it may require verifying such unpaid balance, that the indebtedness is not in default and that there has been no acceleration of maturity.

THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Mortgagee Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Mortgagee Policies must be issued at the Basic Rates.

b. Subsequent to Mortgagee Policy - When a Mortgagee Policy(ies) is requested, for any reason whatsoever, on a lien already covered by an existing Mortgagee Policy(ies), but not on a renewal or extension thereof, the new policy being in the amount of the current unpaid balance of the indebtedness, the premium for the new policy shall be at the Basic Rate, but a credit for three-tenths (3/10) of said premium may be allowed.

c. Subsequent to Mortgagee Policy - When an insolvent insurer is placed in permanent receivership by a court of competent jurisdiction and a Mortgagee Policy(ies) is requested on a lien already covered by an existing Mortgagee Policy(ies) of said insolvent insurer, but not on a loan to take up, renew, extend or satisfy an existing lien, the new policy being in the amount of the current unpaid balance of the indebtedness, the premium for the new policy shall be at the basic rate, but a credit for one-half of said premium shall be allowed, unless such credit would reduce the premium to less than the minimum Basic Rate, in which case the rate shall be the minimum Basic Rate. The insured shall surrender the existing Mortgagee Policy(ies) to the Company when placing the order for a new Mortgagee Policy(ies). The date of Policy for the new policy(ies) shall be the same Date of Policy as the existing Mortgagee Policy(ies).

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R-7. Mortgagee Policies Covering First and Subordinate Liens Issued Simultaneously - When a Mortgagee Policy is issued on a First Lien, and other policy(ies) is issued on Subordinate Lien(s), created in the same transaction, covering the same land or a portion thereof, the premium for the First Lien policy shall be computed on the total of the combined liens; the premium for each Subordianate Lien policy shall be $5.00.

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R-8. Mortgagee Policy on a Loan to Take Up, Renew, Extend or Satisfy an Existing Lien(s) - On a Mortgagee Policy, issued on a loan to fully take up, renew, extend or satisfy an old mortgage(s) that is already insured by a Mortgagee Policy(ies), the new policy being in the amount of the note of the new mortgage, the premium for the new policy shall be at the Basic Rate, but a credit shall reduce the premium by the following amount:

(a) 40% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring within two (2) years from the date of the Mortgagee Policy insuring the old mortgage;

(b) 35% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than two (2) years but less than three (3) years from the date of the Mortgagee Policy insuring the old mortgage;

(c) 30% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than three (3) years but less than four (4) years from the date of the Mortgagee Policy insuring the old mortgage;

(d) 25% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than four (4) years but less than five (5) years from the date of the Mortgagee Policy insuring the old mortgage;

(e) 20% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than five (5) years but less than six (6) years from the date of the Mortgagee Policy insuring the old mortgage;

(f) 15% of the premium calculated at the current rate on the written payoff balance of the old mortgage, such renewal occurring more than six (6) years but less than seven (7) years from the date of the Mortgagee Policy insuring the old mortgage;

After the lapse of seven (7) years from the date of the Mortgagee Policy insuring the old mortgage, the Basic Rate shall apply.

Where more than one chain of title, as the term "chain of title" is from time to time defined by the Commissioner, was involved in the issuance of the original policy(ies), and the new policy includes one or more of such additional chains of title involved in the issuance of the original policy(ies), an additional premium charge as established by the Commissioner shall be added for each additional chain of title involved. (See Rule R-9 for definition of "additional chain.")

On Mortgagee Policies, issued on multiple loans to fully take up, renew, extend or satisfy an old mortgage insured by a single Mortgagee Policy, the new policies being in the amount of the new mortgages, the premium for the larger Mortgagee Title Policy shall be at the Basic Rate, but a credit shall be allowed upon the premium as set forth previously in this rule. The premium for the remaining new Mortgagee Title Policy(ies) shall be at the Basic Rate. A credit shall still be allowed upon the premium as set forth in this rule even if not all of the new loans are insured or if only one of the new loans is insured. The reduction in rate as herein prescribed shall not apply to any case where any additional property not covered by the original policy(ies) is included in the policy to be issued.

In the calculation of the credit, the amount from the written payoff balance shall not exceed 100% of the original amount of the old mortgage. In no event shall the premium collected be less than the regular minimum promulgated rate for a Mortgagee Policy.

THIS RULE MAY NOT BE APPLIED in connection with the issuance of a series of Mortgagee Policies issued by reason of notes being apportioned to individual units in connection with a master policy covering the aggregate indebtedness, including improvements. Individual Mortgagee Policies must be issued at the Basic Rate.

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R-9. Additional Chains of Title - In the event more than one chain of title is involved in the issuance (including determination of insurability of access) of any policy, the Company shall charge the minimum policy Basic Premium Rate for each additional chain. For purpose of applying this rule, contiguous parcels of land in one county shall be treated as one chain, provided record title to the land and record title to the access is vested in one owner at the time application is made. Each noncontiguous parcel having a separate chain shall be treated as a separate chain, except where two or more lots in the same platted subdivision, and having the same plat recording date, belong to the same owner, then such shall be treated as one chain. If the parcels of land lie in more than one county, there are separate chains of title in each county. No additional chain charge may be made for determination of insurability of access to land located within a subdivision, provided: (i) the subdivision is located in only one county, and (ii) the plat of the subdivision has been lawfully approved by an authorized governmental entity, is duly recorded, and the roads shown thereon have been dedicated for public use or for the use of the owners of lots located in the subdivision.