• P-1 Definitions  
• P-2 Amendment of Exception as to Area and Boundaries, Etc.
• P-3 Exception to "Rights of Parties in Possession" 
• P-4 Restrictive Covenants Exception 
• P-5 Special Exceptions 
• P-6 Co-Insurance 
• P-7 Name of Insured on Loan Policy of Title Insurance or Proposed Insured on Commitment or Loan Policy of Title Insurance
• P-8 Issuance of Policies Prior to Completion of Improvements
• P-9 Endorsement of Owner or Mortgagee Policies   
• P-10 Facultative Reinsurance 
• P-11 Insuring Around 
• P-12  Abstract Plants 
• P-13 Truth-in-Lending
• P-14 Owner Title Policy Commitment to the State Department of Highways and Public Transportation 
• P-15  Commitment for Title Insurance to or for the benefit of the Federal Deposit Insurance Corporation, Office of Thrift Supervision or Resolution Trust Corporation 
• P-16 Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) 
• P-17  Electronically Produced Endorsement Forms  
• P-18 Commitment for Title Insurance
• P-19
• P-20 Amendment of Standard Exception in Mortgagee Policy Relating to Taxes
• P-21 Additional Requirements for Contents of Commitment for Title Insurance 
• P-22  Payment of a Fee for Examination and/or Closing  
• P-23 Division of Premiums between Title Insurance Agents and Title Insurance Companies 
• P-24 Payment for Services Rendered by a Title Insurance Company, Title Insurance Agent, or Direct Operation to Another Title Insurance Company, Title Insurance Agent or Direct Operation
• P-25  Reasonable Time for Furnishing Title Evidence 
• P-26 Copies of Policies Provided to Agents
• P-27 Disbursement From Escrow or Trust Fund Accounts   
• P-28 Requirements for Continuing Education for Title Agents and Escrow Officers 
• P-29 Amendment of Standard Exception in Mortgagee Policy Relating to Taxes Not Yet Due
• P-30 Guaranty Assessment Recoupment Charge 
• P-31 Authorized Execution of Directly Issued Policy 
• P-32 Document Retention 
• P-33 Policy of Title Insurance (USA) 
• P-34 (repealed 8/1/95)
• P-35 Prohibition Against Guaranties, Affirmations, Indemnifications & Certifications 
• P-36 Arbitration Provisions
• P-37 Lack of a Right of Access
• P-38  Residential Owner Policy of Title Insurance -- One-To-Four Family Residences 
• P-39 Express Insurance 
• P-40 Standards for Reserve Setting and Reviewing 
• P-43 Limited Pre-Foreclosure Policy (T-40) and Limited Pre-Foreclosure Policy Downdate Endorsement (T-41) 
• P-44 Equity Loan Mortgage Endorsement (T-42) 
• P-45 Texas Reverse Mortgage Endorsement (T-43) 
• P-46 Texas Residential Limited Coverage Junior Mortgagee Policy, Down Date Endorsement, Variable Rate Endorsement, and Additional Coverage Endorsement 
• P-47 Supplemental Coverage Equity Loan Mortgage Endorsement 
• P-48 Dates on and After January 1, 2000 
• P-49 Annual Audit 
• P-50 Restrictions, Encroachments, Minerals Endorsement 
• P-51 Texas Short Form Residential Policy of Title Insurance (T2-R)
• P-52 Delivery of Pro Forma Policies and Promulgated Forms 
• P-53 Rebates and Discounts Prohibited
• P-54 Access Endorsement
• P-55 Non-Imputation Endorsement
• P-56 Contiguity Endorsement
• P-57 Additional Insured Endorsement
• P-58 Report on Directly Issued Policy
• P-59 Reconciliation of References to Provisions of the Insurance Code of 1951 to Provisions of the Texas Insurance Code as Recodified.
• P-60 Assignment of Rents/Leases Endorsement (T-27). 
• P-61 Timely Provision of Title Policies. 
• P-62 Licensing and Location of Title Agents and Direct Operations.
• P-63 Policy Issued to Qualified Intermediary under IRS Code 1031
• P-64 Subordinate Liens and Leases – Pursuant to Rule P-11.b.(8)
• P-65 Issuance of Owner Policy Required in Connection with Issuance of Mortgagee Policy
• P-66 Determination of Amount of Insurance (Policy Amount)
• P-67 Insured Closing and Settlement Letters (T-50)  Effective October 1, 2008
• P-68 Consumer Notice

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IN NO EVENT MAY ANY POLICY OR ENDORSEMENT FORMS CONTAIN COVERAGES NOT EXPRESSLY AUTHORIZED BY THESE RULES AND/OR THE STATE BOARD OF INSURANCE OF THE STATE OF TEXAS.

P-1. Definitions

        a.     Land- The land described, specifically or by reference, and improvements affixed thereto which by law constitute real property. 

        b.     Company- Any Title Insurance Company and/or any title insurance Agent or direct operation of each as herein defined. 

        c.     Board---The State Board of Insurance of the State of Texas. A reference to the State Board of Insurance means the Commissioner of      Insurance or the Texas Department of Insurance, as consistent with the respective power and duties of the Commissioner and the department.  

        d.     Policy---Any contract of title insurance, the form for which is prescribed by the Commissioner.

        e.    Title Examination---The search and examination of a title to determine the conditions of the title to be insured and to evaluate the risk to be undertaken in the issuance of a title insurance policy or other title insurance form.

  f.     Closing the Transaction---The investigation made on behalf of a title insurance company, title insurance agent or direct operation before the actual issuance of the title policy to determine proper execution, acknowledgment and delivery of all conveyances, mortgage papers, and other title instruments which may be necessary to the consummation of the transaction and includes the determination that all delinquent taxes are paid, all current taxes, based on the latest available information, have been properly prorated between the purchaser and seller in the case of an Owner Policy, the consideration has been passed, all proceeds have been properly disbursed, a final search of the title has been made, and all necessary papers have been filed for record.       

  g.    Insuring Around---Refer to Rule P-11 for definition.

        h.   Title Insurance Agent---A person, firm, association or corporation owning or leasing and controlling an abstract plant or participating in a bona fide joint abstract plant operation, and authorized in writing by a title insurance company to solicit insurance and collect premiums and to issue or countersign policies in its behalf.

        i.    Abstract Plant---A geographically arranged abstract plant, currently kept to date, that is adequate for use in insuring titles, so as to provide for the safety and protection of the policyholders. An abstract plant as further defined in Rule P-12 and as further provided for in the Insurance Code, Chapter 2501.003 and Chapter 2502, must include an abstract plant for each county in which a title insurance agent or direct operation maintains an office.

        j.      Endorsement---The form promulgated by the Commissioner for use in amending policies as prescribed by the rules.

        k.     Person---As used in these rules, "person" includes individuals, corporations, associations, partnerships, trusts and estates.

        l.    Title Insurance Company---Any domestic company organized under the provisions of Title 11, Insurance Code, for the purpose of conducting the business of title insurance, any title insurance company organized under the laws of another state, or foreign government meeting the requirements of Title 11, Insurance Code, and holding a certificate of authority to transact business in Texas and any domestic or foreign company having a certificate of authority to insure titles to real estate within this state and which meets the requirements of Title 11, Insurance Code.

        m.   Date of the Original Indebtedness---The date of the original indebtedness as used in Rule R-8 is the stated date of the Loan Policy of Title Insurance first issued to insure the lien securing the indebtedness described in such Loan Policy without consideration of any Endorsement subsequently placed upon such Loan Policy.

        n.   Fiscal Year---An accounting period of twelve (12) months (or less) designated in writing prior to usage and filed with the Title Insurance Section of the Texas Department of Insurance. For the purpose of audits of trust fund accounts, provided, however, no such designation shall extend any audit period beyond twelve (12) months.

        o.  Verifying The Services Rendered---As used in Procedural Rule P-22, this term shall require completion of promulgated Form T-00, Failure to substantially complete Form T-00 is a violation of Procedural Rule P-22. A copy of the completed T-00 form shall be made available to all parties to a transaction upon request.

        p. Title Insurance---Insuring, guaranteeing or indemnifying owners of real property or others interested therein against loss or damage suffered by reason of liens, encumbrances upon, or defects in the title to said property, or the invalidity or impairment of liens thereon, or doing any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of Title 11, Insurance Code.

        q.  The business of title insurance---(1) the making as insurer, guarantor or surety, or proposing to make as insurer, guarantor or surety, of any contract or policy of title insurance or any equivalent thereof; (2) the transacting or proposing to transact, any phase of title insurance, including solicitation, title examination, except when conducted by an attorney, closing the transaction, except when conducted by an attorney, execution of a contract of title insurance, insuring and transacting matters subsequent to the execution of the contract and arising out of it, including reinsurance; (3) the making of a guaranty or warranty of a title search, a title examination, or any component thereof by a person other than the one performing the search or examination; or (4) the doing or proposing to do, any business in substance equivalent to any of the foregoing whether or not designed to evade the provisions of Title 11, Insurance Code.     

         r.   Commissioner---The Commissioner of Insurance of the State of Texas.

        s.    Escrow Officer---An attorney, or bona fide employee of either an attorney licensed as an escrow officer, bona fide employee of a title insurance agent, or bona fide employee of a direct operation whose duties include any or all of the following: (1) countersigning title insurance forms; or (2) supervising the preparation and supervising the delivery of title insurance forms; (3) signing escrow checks; or (4) closing the transaction.

        t.   Foreign Title Insurance Company---A title insurance company organized under the laws of any jurisdiction other than the State of Texas.

        u.  Residential real property---

(1) Any real property which has improvements thereon designed principally for the occupancy of from one to four families (including individual units of condominiums and cooperatives) and either (a) situated in a platted subdivision of record, or (b) consisting of five acres or less, or

(2) Any real property which has improvements thereon designed principally for the occupancy of from one to four families and consisting of more than five acres but not more than 200 acres used for agricultural production by individual insureds (according to the information known by the Company at the time of issuance of the policy of title insurance).

        v.    p; Thing of value---Includes any payment, advance, funds, loan, service, or other consideration.  

        w.   Premium---The rate promulgated by the Commissioner pursuant to Chapter 2703, Insurance Code, including the charges of title examination and for closing the transaction, whether or not performed by an attorney, and for issuance of a policy.

        x.   Attorney---A person who is both licensed to practice law and a member of the State Bar of Texas, including a Texas professional corporation organized for the purpose of rendering professional legal services.

        y.   Direct Operation---The operations of a title insurance company under the authority of a license issued under Subchapter B of Chapter 2651, Insurance Code. Whenever the term "title insurance agent" is used it shall be construed to include "direct operation" unless the context indicates to the contrary.

        z.    Furnishing title evidence---Providing information regarding instruments affecting title to a tract of land, going back not less than 25 years or such greater period of time as is necessary to determine the ownership and appropriate liens, encumbrances upon or defects in the title. The information must include, at a minimum, the following:

1. Grantor of each instrument;

2. Grantee of each instrument;

3. Type of each instrument;

4. Recording information of each instrument;

5. Copy of each instrument as needed by the examiner.

It is not required that the information include:

1. Following the title to a right of way or easement, or showing instruments executed by the grantee in such right of way or easement, other than amendments to such right of way or easement;

2. Following the title to an oil, gas, or mineral lease or interest.

In considering the necessary length of time to determine ownership and search the title, the searcher may be authorized by the title insurance company to accept what it considers prior indicia of title. Prior indicia of title include, for example, a prior title policy, a final order of a court of competent jurisdiction determining the entire title, or, on subdivision tracts, the base title of the dedicated subdivision

        aa. Directly Issued Policy---A title insurance policy issued and countersigned by a duly authorized officer, or employee, of a title insurance company, whose principal activities performed on behalf of such title insurance company take place in one or more designated offices maintained by the title insurance company located in the State of Texas, and which address is designated in writing and placed on file with the Title Insurance Section of the Texas Department of Insurance.

        bb. Owner’s Policy---The Owner’s Policy of Title Insurance (Form T-1) or the Residential Owner Policy of Title Insurance - One-To-Four family Residences (Form T-1R). Any rule referring to the Owner’s Policy shall apply to both forms unless the Rule refers to the specific Form number. Unless a rule expressly requires the use of the Owner’s Policy of Title Insurance (Form T-1) a title insurance company may use the Residential Owner Policy of Title Insurance - One-To-Four Family Residences (Form T-1R) if the property has any improvements thereon designed for the occupancy of from one to four families. Each Rule, endorsement or other form, or provision in the Schedules or in an endorsement to the Owner’s Policy (T-1) that refers to a term defined in Section 1 of the Conditions of the Owner’s Policy (T-1) shall be deemed to refer to the term regardless of whether the term is capitalized in the Rule, endorsement or other form, or Schedule. Each Rule, endorsement or other form, or provision in the Schedules that refers to the Conditions and Stipulations of the Owner’s Policy (T-1) shall be deemed to refer to the Conditions of the Owner’s Policy (T-1). Wherever in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas ("Basic Manual"), including an amendment, revision or re-adoption of a provision of the Basic Manual, the term “Owner Policy” is found, it shall mean “Owner’s Policy”. Insuring forms and other promulgated forms may be produced with the revised term.

        cc. Commitment for Title Insurance---A commitment for title insurance is a title insurance form that offers to issue a title policy subject to stated exceptions, requirements, and terms. The term includes a mortgagee title policy binder on an interim construction loan. The commitment, mortgagee title policy binder on an interim construction loan, title policy, or other insurance form is not an abstract of title. The commitment or binder constitutes a statement of the terms and conditions on which the title insurance company is willing to issue its policy. The title insurance policy or other insurance form constitutes a statement of the terms and conditions of the indemnity under the title insurance policy or other form. An abstract of title prepared from an abstract plant for a chain of title of real property described in the abstract of title is not title insurance, a commitment for title insurance or any other title insurance form.

dd.    Department---The Texas Department of Insurance
 

        ee.   Loan Policy---The Loan Policy of Title Insurance (Form T-2) or the Texas Short Form Residential Mortgagee Policy of Title Insurance (Form T-2R). Any rule referring to the Loan Policy or Loan Title Policy or T-2 shall apply to both forms unless the Rule specifically refers to the Texas Short Form Residential Mortgagee Policy of Title Insurance (Form T-2R). Each Rule, endorsement or other form, or provision in the Schedules or in an endorsement to the Loan Policy that refers to a term defined in Section 1 of the Conditions of the Loan Policy (T-2) shall be deemed to refer to the term regardless of whether the term is capitalized in the Rule, endorsement or Schedule. Each Rule, endorsement or other form, or provision in the Schedules that refers to the Conditions and Stipulations shall be deemed to refer to the Conditions of the Loan Policy. Wherever in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas ("Basic Manual"), including an amendment, revision or re-adoption of a provision of the Basic Manual, the term "Mortgagee Policy" is found it shall mean "Loan Policy". Insuring forms and other promulgated forms may be produced with the revised term.

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P-2. Amendment of Exception to Area and Boundaries

(a.) General Instructions In either an Owner or Mortgagee Policy, when the Insured desires to have amended the exception as to area and boundaries, (i.e. Item 2 of Schedule B) to delete all save "shortages in area", a title insurance company may accept an existing real property survey and not require a new survey when providing area and boundary coverage if the title insurance company is willing to accept evidence of an existing real property survey, and an affidavit verifying the existing survey, notwithstanding the age of the survey or the identity of the person for whom the survey was prepared. If the transaction involves Residential Real Property, the affidavit verifying the existing survey shall be the Form T-47 Residential Real Property Affidavit. The policy to be issued shall cover the same land as described in the evidence of the existing real property survey. The Company may, if it considers the additional hazard insurable, amend such exception (the Company may waive the requirement of a survey in connection with the issuance of its Mortgagee Policy insuring the lien on a condominium unit), by indicating same in Schedule B of the policy or by endorsement as provided herein upon payment of the premium prescribed in R-16 in the case of an Owner Policy. The survey must be acceptable to the Company.

(b.) Residential Refinance, Affidavit in Lieu of Updated Survey This Sub-Section P-2.b. shall apply solely to transactions involving Residential Real Property in connection with a Mortgagee Policy issued on a loan to renew, extend or satisfy a lien already covered by a Mortgagee Policy. On transactions covered by this Sub-Section, the Company shall notify the borrower of the borrower's right to substitute a qualifying Affidavit in Lieu of an Updated Survey. Such notice shall be given: (i) when the application for title insurance is received; or (ii) when the commitment for title insurance is first issued. On qualifying transactions under this Sub-Section, the exception as to area and boundaries shall be amended to read: "Shortages in area" {subject to any additional exceptions, or express insurance coverage, deemed appropriate by the Company} provided that the following requirements are satisfied:

1) The borrower provides to the Company an original, or legible copy of the survey {hereinafter the "Prior Survey"} performed in connection with: (i) the transaction under which the borrower acquired title to the Residential Real Property; or, (ii) a prior loan transaction by the borrower involving the Residential Real Property. The Prior Survey shall not be dated earlier than 7 years prior to the date of the Mortgagee Policy to be issued or performed for another person, unless the Company is willing to accept evidence of an existing survey in accordance with Sub-section-P-2.a.

2) The borrower has actual knowledge of the physical condition of the Residential Real Property since the date of the Prior Survey.

3) The Mortgagee Policy to be issued in connection with the current refinance transaction will describe under item "5" of Schedule "A" the same land described in the Prior Survey.

4) The borrower executes an affidavit concerning the Residential Real Property stating that, since the effective date of the Prior Survey and up to and including the date of the affidavit, there have been no:

(i) construction projects such as new structures, additional rooms, garages, swimming pools or deckings; (ii) changes in the location of boundary fences or boundary walls;
(iii) construction projects on immediately adjoining property(ies) which construction occurred near the boundary of the Residential Real Property; (iv) conveyance or replattings or easement grants or easement dedications by the borrower.

(c.) A title insurance company may not discriminate in providing area and boundary coverage in connection with residential real property solely because: (1) the real property is platted or unplatted; or (2) a municipality did not accept a subdivision plat in relation to the real property before September 1, 1975.

(d.) A title insurance company may not require an indemnity from a seller, buyer, borrower, or lender to provide area and boundary coverage.

(e.) If an affidavit is provided to the Company pursuant to this Rule and the affidavit is incorrect, whether due to the negligence or intentional act of the affiant, the area and boundary coverage given pursuant to this Rule shall be unaffected and in full force and effect; provided, however, the exclusions contained in the policy shall not be affected in any way.

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P-3. Exception to "Rights of Parties in Possession" - In an Owner or Mortgagee Policy, the Company shall have the right to make a general exception as to the Rights of Parties in Possession, as that term is hereinafter defined, on the condition that Insured executes a written instrument stating that Insured waives inspection of the property and that Insured is satisfied to accept the policy subject to such general exception. In all such cases, the Company must retain and preserve said written instrument. If such inspection is made by the Company, it may charge its reasonable and actual cost therefore. As used herein and in Owner and Mortgagee Policies, the term "Rights of Parties in Possession" shall mean one or more persons who are themselves actually physically occupying the property or a portion thereof under a claim of right adverse to the record owner of the property as shown in Schedule A of the policy. In no event shall the term "Rights of Parties in Possession" include any right, claim or interest which is evidenced by a document recorded in the county where all or part of the property is located. return to top of page

P-4. Restrictive Covenants Exception - When the examination does not disclose that restrictive covenants affect the applicable land, lien or estate, the Company shall delete the restrictive covenant exception prescribed in policy forms. When such are disclosed, the Company shall indicate, following the prescribed exception, the restrictive covenants by giving specific reference to the volume and page where each appears of record. When examination of title discloses that restrictive covenants have expired by their terms, or if in the opinion of counsel, the restrictive covenants are void and unenforceable by statute, have been effectively released, or have been cancelled by final judgment of a court of competent jurisdiction binding upon all of the property owners and lienholders affected by said restrictions, the Company may delete the restrictive covenant exception prescribed in the policy forms. return to top of page

P-5. Special Exceptions - With the knowledge of the Insured, it shall be permissible for the Company to insert such special exception(s) as shall develop from the examination of the title under consideration. Such special exception(s) shall in all cases specifically describe the particular item(s) excepted to, and shall not be general in its terms. return to top of page

P-6. Co-Insurance

            (a)       Should a Company elect to issue a policy for a lesser amount than the whole risk, it may do so by causing other Companies qualified to do business in Texas to co-insure the excess.  Each Company issuing a policy under the above provisions shall insert in Schedule B thereof the following:  

                        This policy is issued contemporaneously with Policy No.___________ of (Name of Title Insurance Company (ies)) for $___________.  The liability of the Company hereunder is hereby limited to (proportion) of any loss, but said liability shall not exceed the face amount of this policy." 

            (b)       Where the total amount of any and all policies issued on a single risk is in excess of $15,000,000.00 (Fifteen Million Dollars), and when such risk is insured by more than one title insurance company, the premium charged shall be determined as if the risk was being insured in one policy and shall be apportioned between and among the different companies on a pro rata basis commensurate with the amount of risk insured by each title insurance company.  In the event of issuance of mortgagee title policy binders on interim construction loans, each binder shall bear the full charge provided in Rule R-13. 

            (c)        Where the total amount of a single risk is in excess of $15,000,000 (Fifteen Million Dollars), and when such risk is insured by more than one title insurance company, one title insurance company may issue a policy and the other co-insurers may join in execution of the Co-Insurance Endorsement (T-48), in lieu of separate issuance of a policy subject to the terms of paragraph (a).  The premium shall be determined for the total risk being insured under the policy and the premium shall be apportioned between or among the different companies on a pro rata basis commensurate with the amount of risk insured by each title insurance company as specified in the Co-Insurance Endorsement (T-48).  The Amount of Insurance stated in Schedule A shall be the total risk being insured under the policy, followed by the statement “Subject to the terms of the Co-Insurance Endorsement (T-48) attached hereto.”

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P-7. Name of Insured on Loan Policy of Title Insurance or Proposed Insured on Commitment or Loan Policy of Title Insurance

A.        When the Department of Housing and Urban Development, the Federal Housing Administration or the Veterans' Administration, or as their names may be changed from time to time, is guaranteeing the payment of loans, or portions thereof, the Secretary of Housing and Urban Development or the Administrator of Veterans' Affairs, or as their names may be changed from time to time, may be included as one of the Insureds.

B.        At the request of the proposed insured, the following may be included when describing the Proposed Insured (in the case of a Commitment) or Name of Insured (in the case of a Loan Policy):

                        “, and each successor in ownership of the indebtedness secured by the insured mortgage, except a successor who is an obligor under the provisions of Section 12(c) of the Conditions and Stipulations”

C.        No words may be added to, deleted from or substituted for the language allowed by Section B of this rule.  Section B language may not be added by or to any endorsement nor may it be inserted in an Owner's Title Policy or a Loan Title Policy Binder on Interim Construction Loan.

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P-8. Issuance of Policies Prior to Completion of Improvements

(a.) Owner Policy

(1) When an Owner Policy is issued in an amount to include the cost of immediately contemplated improvements,
the Policy must contain the following exception in Schedule B:

"Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of _______________ County, Texas, prior to the date hereof."

AND THE FOLLOWING “LIABILITY” PARAGRAPH:

"Liability hereunder at the date hereof is limited to $_________. Liability shall increase as contemplated
improvements are made, so that any loss payable hereunder shall be limited to said sum plus the amount
actually expended by the Insured in improvements at the time the loss occurs. Any expenditures made for
improvements, subsequent to the date of this policy, will be deemed made as of the date of this policy. In no
event shall the liability of the Company hereunder exceed the face amount of this policy. Nothing contained in
this paragraph shall be construed as limiting any exception or any printed provision of this policy."
In the event the premium for the Owner Policy is paid in installments pursuant to Rate Rule R-2(b) or (c),
the following shall be added to the "Liability" paragraph:
"Notwithstanding the foregoing, liability hereunder shall only increase as down-date endorsements are
issued pursuant to expenditures made for improvements and as the corresponding fractional premium for the
policy and the full premium for the down-date endorsement are paid."

(2) Upon the completion of the improvements on said property, the owner's acceptance thereof, and satisfactory
evidence to the Company that all bills for labor and materials have been paid in full, the "Liability" paragraph and
the exception in Schedule B set out in "a(1)" of this rule may be eliminated from the policy by the issuance of the
promulgated Endorsement form containing the applicable promulgated language covering said elimination.
In addition to the above elimination, if a satisfactory survey made after the completion of improvements is
furnished to the Company, survey coverage may be provided as set out in Rules R-16 and P-2, using the
promulgated Endorsement form and containing the applicable promulgated language.
In addition, if the Company’s underwriting requirements have been met, the T-19.1 Endorsement may be
issued or coverage affirmed as set out in Rules R-29 and P-50, using the promulgated Endorsement form and
containing the applicable promulgated language.

(b.) Mortgagee Policy

(1) When a Mortgagee Policy is issued prior to completion of improvements made under a mortgage given in
whole, or in part, for the cost of improvements, the policy must contain the following exception under Schedule
B:
“Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of ________________ County, Texas, prior to the date hereof."

AND THE FOLLOWING "PENDING DISBURSEMENT" PARAGRAPH:
Sec. IV-Page 7
"Pending disbursement of the full proceeds of the loan secured by the lien instrument set forth under
Schedule A hereof, this policy insures only to the extent of the amount actually disbursed, but increases as each
disbursement is made in good faith and without knowledge of any defects in, or objections to, the title up to the
face amount of the policy. Nothing contained in this paragraph shall be construed as limiting any exception
under Schedule B, or any printed provision of this policy."
In the event the premium for the Mortgagee Policy is paid in installments pursuant to Rate Rule R-2(a), the
following shall be added to the "Pending Disbursement" paragraph:
"Notwithstanding the foregoing, liability hereunder shall only increase as down-date endorsements are
issued pursuant to construction advances and as the corresponding fractional premium for the policy and the
full premium for the down-date endorsement are paid."

(2) Upon the completion of the improvements on said property, the owner's acceptance thereof, and satisfactory
evidence to the Company that all bills for labor and materials have been paid in full, the exception plus the
"Pending Disbursement" paragraph in "b(1)" above may be eliminated from the policy and mechanic's and
materialmen's lien coverage amended by issuance of the promulgated Endorsement form containing the
applicable promulgated language covering said elimination and amendment.
In addition to the above elimination, if a satisfactory survey made after the completion of improvements is
furnished to the Company, survey coverage may be provided as set out in Rules R-16 and P-2, using the
promulgated Endorsement form and containing the applicable promulgated language.
In addition, if the Company’s underwriting requirements have been met, the T-19 Endorsement may be
issued or coverage affirmed as set out in Rules R-29 and P-50, using the promulgated Endorsement form and
containing the applicable promulgated language.

(3) In the event a Mortgagee Policy is issued subsequent to the issuance of a Mortgagee Title Policy Binder on
Interim Construction Loan, but prior to the improvements having been completed and accepted by the owner,
and before satisfactory evidence that all outstanding bills have been paid or satisfied has been furnished to the
Company issuing said Mortgagee Policy, said Mortgagee Policy must contain the following exception under
Schedule B:
“Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in
connection with improvements placed, or to be placed, upon the subject land. However, the Company does
insure the Insured against loss, if any, sustained by the Insured under this Policy if such liens have been filed
with the County Clerk of _____________ County, Texas, prior to the date hereof, except the following.”
(Here insert any exception necessary by reason of matters arising since the date of the Binder or delete the
immediately preceding words "except the following".)
AND THE FOLLOWING “PENDING DISBURSEMENT” PARAGRAPH: (if applicable)
Pending disbursement of the full proceeds of the loan secured by the lien instrument set forth under
Schedule A hereof, this policy insures only to the extent of the amount actually disbursed, but increases as each
disbursement is made in good faith and without knowledge of any defects in, or objections to, the title up to the
face amount of the policy. Nothing contained in this paragraph shall be construed as limiting any exception
under Schedule B, or any printed provision of this policy.

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P-9. Endorsement of Owner or Mortgagee Policies

(a)  Owner Policy

(1) When an Owner Policy of Title Insurance (Form T-1) is to be issued on a leasehold estate in the land, the Company shall attach to the said Owner Policy (Form T-1) the Leasehold Owner Policy Endorsement. When a Residential Owner Policy of Title Insurance -- One-To-Four Family Residences (Form T-1R) is to be issued on a leasehold estate in the land, the Company shall attach the Residential Leasehold Endorsement form to the Residential Owner Policy -- One-To-Four Family Residences (Form T-1R). The Owner Policy shall show that the estate being insured is a leasehold and exceptions shall be shown under Schedule B to all of the terms, provisions, and conditions of the said lease creating such leasehold estate.

(2) When an insured under an Owner Policy shall have satisfied the Company as to the current value of the estate or interest insured by such Owner Policy, and shall have paid the premium provided for in Rule R-3.c, the Company shall attach to the said Owner Policy endorsement form T-34.

(3) When an Owner Policy is issued in the manner provided in Rule P-8.a, and the coverage thereunder increases as provided in Rule R-2, Rule P-8 or otherwise as provided in these Rules, upon request and compliance with Rule R-15, the title insurance company which issued the Owner Policy may extend the effective date of the said Owner Policy and state the amount then existing under such Policy by issuing the endorsement provided for in Form T-3, Instruction VIII, Items (a) 1, 2 and 3 of the endorsement may not be deleted.

(4).Where an Owner Policy has been issued covering the land and a manufactured housing unit which has been affixed to the land so as to become part of the real property, the Company may, if it considers the additional risk insurable and if requested by the proposed insured, attach to the policy endorsement form T-31.1 upon the payment of the premium prescribed in Rate Rule R-15 and all expenses required by the Company (such as survey and/or inspection).

(b.) Mortgagee Policy

(1) Assignment of Mortgage to Government Agencies - Where a Mortgagee Policy has been issued covering the lien securing an indebtedness, and such indebtedness and lien have been subsequently sold, transferred and assigned to Government National Mortgage Association and/or Federal National Mortgage Association and/or Administrator of Veterans' Affairs and/or Secretary of Housing and Urban Development, as their names may be changed from time to time, the Company which issued the original policy may issue an Endorsement thereto to show the Government National Mortgage Association and/or Federal National Mortgage Association and/or Administrator of Veterans' Affairs and/or Secretary of Housing and Urban Development, or as their names may be changed from time to time as a party insured. As a condition to the issuance of the Endorsement, the Company may require a showing from the assignor that such assignor has not accelerated the maturity of the indebtedness, or if he has, that there has been a proper reinstatement of the obligation. It shall be permissible for the Company to show the current owner of the fee simple title to the property in the said Endorsement.

(2)Assignment of Mortgage to Others -

Except as to those loans secured by one-to-four family residential properties, the Endorsement provided for in Rule P-9b(1) may also be issued to any assignees other than those set out in said Rule P-9b(1).

(3) Partial Release, Release of Additional Collateral, Modification Agreement, Reinstatement Agreement and/or Release from Personal Liability - When a Mortgagee Policy has been issued covering the lien securing an indebtedness, and the holder of such Mortgagee Policy desires to:

(a) release a part of the land described in Schedule A of said Policy; and/or
(b) release additional collateral securing indebtedness described in said Schedule A; and/or
(c) modify only one or more of the following items described in Schedule A of said policy: the mortgage, deed of trust, security instrument, guaranty or promissory note, by entering into a Modification Agreement; and/or
(d) reinstate said mortgage or deed of trust by entering into a Reinstatement Agreement; and/or
(e) release the mortgagor(s) or other obligors from personal liability; Upon payment of the premium prescribed by Rate Rule R-11.b, the Company which issued the original policy may issue a Form T-38 Endorsement thereto to show that policy coverage has not been reduced or terminated solely by virtue of the modification, reinstatement or release. An endorsement shall not be issued under this subparagraph (3) if: (i) the modification agreement, reinstatement agreement or other instrument expressly creates or grants a lien or power of sale; or (ii) the indebtedness secured by the lien of the insured mortgage or deed of trust is evidenced by a new promissory note; or (iii) the insured mortgage or deed of trust is modified to secure additional principal indebtedness other than accrued or deferred interest on the specific indebtedness described on Schedule A of the policy or advances made pursuant to the terms of the original mortgage or deed of trust; or (iv) the insured mortgage or deed of trust is cross-collateralized or otherwise modified to cover property not described on Schedule A of the policy

(4) Down Date Endorsement - When a Mortgagee Title Policy is issued in the manner provided in Rule P-8.b. and construction advances are being made subsequent to such issue, upon request and compliance with Rule R-11c, the title insurance company which issued the Mortgagee Title Policy may extend the effective date of the said Mortgagee Title Policy and state the amount of coverage then existing under the policy, by issuing the Endorsement provided for in Form T-3, Instruction V. Items (a) 1, 2 and 3 of the Endorsement may not be deleted. When a Mortgagee Title Policy Binder on Interim Construction Loan is issued as provided in Procedural Rule P-16, and construction advances are being made subsequent to such issue, upon request and compliance with Rule R-11.c, the title insurance company which issued the Mortgagee Title Policy Binder on Interim Construction Loan may extend the effective date of the said Mortgagee Title Policy Binder on Interim Construction Loan by issuing the Endorsement provided for in Form T-3, Instruction VII. Items (a) 1 and 2 of the Endorsement may not be deleted.

(5) When a Mortgagee Policy of Title Insurance is to be issued on a leasehold estate in the land, the Company shall attach to the said Mortgagee Policy the Leasehold Mortgagee Policy Endorsement. The Mortgagee Policy shall show that the estate being insured is a leasehold and exception shall be shown under Schedule B to all of the terms, provisions, and conditions of the said lease creating such leasehold estate.

(6) Adjustable Mortgage Loan Instruments - For purposes of this rule an “adjustable mortgage loan” shall be one which permits adjustments of the interest rate, with such adjustments being implemented through changes in the payment amount and/or in the outstanding principal loan balance or in the loan term. When a Mortgagee Policy of Title Insurance is to be issued insuring the lien securing an adjustable mortgage loan note, the company may attach to the Mortgagee Policy the Endorsement provided for in Form T-33 or Form T-33.1. A Form T-33 Endorsement or Form T-33.1 Endorsment may be issued and attached to a previously issued Mortgagee Policy
insuring an adjustable mortgage loan upon the payment of any applicable premium charge and compliance with the underwriting requirements of the Company.

(7) Where a Mortgagee Policy has been issued covering the lien securing an indebtedness against land and a manufactured housing unit which has been affixed to the land covered by said lien so as to become part of the real property, the Company may, if it considers the additional risk insurable and if requested by the proposed insured, attach to the policy endorsement form T-31 or endorsement form T-31.1 upon the payment of the premium prescribed in Rate Rule R-11 (e) and all expenses required by the Company (such as survey and/or inspection). A Company is not required to issue endorsement form T-31 in order to issue endorsement form T-31.1.

(8) When a Mortgagee Policy of Title Insurance is to be issued to insure the validity and priority of a lien created by a mortgage or deed of trust which secures a revolving credit promissory note or other such indebtedness where: (1) a line of credit of a specific amount is extended to a borrower for the term of indebtedness, (2) the amount of indebtedness actually outstanding at any particular time is subject to fluctuations up or down due to future disbursements of loan proceeds and/or future repayments thereof from time to time over the term of the indebtedness (which disbursements and repayments are contemplated by the parties at the time the indebtedness is created), and (3) repayments by the borrower neither reduce nor increase the original line of credit extended nor affect the borrower's liability to repay the principal sum of all outstanding disbursements plus all accrued interest thereon, the Company upon request and compliance with Rule R-11(f) shall attach to said Mortgagee Policy of Title Insurance the Revolving Credit Endorsement. The Revolving Credit Endorsement shall be available only where the mortgage or deed of trust creating the lien to be insured discloses to the satisfaction of the Company that the indebtedness secured thereby is a revolving type of indebtedness as set forth above. The Mortgagee Policy of Title Insurance shall show by endorsement that the lien being insured secures a revolving credit type of indebtedness.

(9) When a mortgagee policy is to be issued covering the lien securing an indebtedness against land used or to be used primarily for residential purposes, the Company may, if it considers the risk insurable, attach to the policy endorsement Form T-36 with any applicable exceptions in paragraph (b) upon the payment of the premium prescribed in Rate Rule R-11(g).

(10) Balloon Mortgage Endorsement - When a mortgagee policy of title insurance is to be issued on residential real property insuring a lien that contains a balloon rider, the Company may attach to the mortgagee policy endorsement Form T-39. The balloon rider must contain a conditional right to refinance. The lien as originally created and described in the mortgagee policy must contain the balloon rider. The Company must be paid the premium prescribed in Rate Rule R-11h for issuance of the endorsement.

(11) A Company may issue its First Loss Endorsement (T-14) to a Mortgagee Policy (T-2), if (1) its underwriting requirements are met, (2) other property not described in the Mortgagee Policy is encumbered to secure payment of the indebtedness secured by the insured mortgage, and (3) the Company is paid the premium prescribed in Rate Rule R-11i. The Company may not issue the First Loss Endorsement (T-14) if the land covered by the policy is residential real property.

(12) A Company may issue its Last Dollar Endorsement (T-15) to a Mortgagee Policy (T-2), if (1) its underwriting requirements are met, (2) other property not described in the Mortgagee Policy is encumbered to secure payment of the indebtedness secured by the insured mortgage, and (3) the Company is paid the premium prescribed in Rate Rule R-11j. The Company may not issue the Last Dollar Endorsement (T-15) if the land covered by the policy is residential real property.

(13) A Company may issue its Mortgagee Policy Aggregation Endorsement (T-16) to a Mortgagee Policy of Title Insurance (T-2), if (1) it is paid the premium prescribed in Rate Rule R-11k; (2) its underwriting requirements are met; and (3) multiple policies are simultaneously issued covering separate mortgages securing the same indebtedness or loan. The Company shall charge the applicable premium for each Mortgagee Policy of Title Insurance (T-2).

(14) A Company may issue its Planned Unit Development Endorsement (T-17) to Mortgagee Policy, if its underwriting requirements are met and if it is paid the premium prescribed in Rate Rule R-11l. The Company may delete any insuring provision if it does not consider that risk acceptable. The Company may not issue the Planned Unit Development Endorsement (T-17) if the land covered by the policy is not residential real property. Any insurance matter that may be covered by a Planned Unit Development Endorsement (T-17) may be insured only by the use of the Planned Unit Development Endorsement (T-17).

15) A Company may issue its Condominium Endorsement T-28 to a contemporaneously issued Mortgagee Policy
on or after the date Rate Rule R-11.m is effective, if its underwriting requirements are met and if it is paid the
premium, if any, described in Rate Rule 11.m. The Company may delete any insuring provision if it does not
consider that risk acceptable. The Company may not issue the Condominium Endorsement (T-28) if the land
covered by the policy is not residential real property. Any insured matter that may be covered by a
Condominium Endorsement (T-28) may be insured only by the use of the Condominium Endorsement (T-28).
This endorsement may not be issued in conjunction with the Planned Unit Development Endorsement (T-17).

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P-10. Facultative Reinsurance - Unless any Company submits to the commissioner a form such Company proposes to use, the Facultative Reinsurance Agreement Form T-18.1; Tertiary Facultative Reinsurance Agreement (Type I) Form T-21.1; and Tertiary Facultative Reinsurance Agreement (Type II) Form T-21.2 shall be used by all title insurance companies authorized to do business in Texas. If the commissioner approves the form submitted by any such Company, then such form may be used by the submitting Company after it has been approved by the commissioner. The Maximum Liability which may be assumed by any title insurance company hereunder is governed by Article 9.19 of the Texas Title Insurance Act - 1967, as amended. return to top of page

P-11. Insuring Around - “‘Insuring Around’ is defined as the willful issuance of a title binder or title insurance policy showing no outstanding enforceable recorded liens while the title insurance company knows that in fact a lien or liens are of record against the real property, and shall be prohibited, except under circumstances as the commissioner under his or her rulemaking powers shall approve. A title insurance company knows that an outstanding enforceable recorded matter exists if it determines that the matter is valid and enforceable based on the examination of the title pursuant to which the title binder or title insurance policy is issued. In its discretion, the title insurance company may determine the insurability of title and those matters whichit considers to be insurable under the title binder or title insurance policy; provided, however, that insuring around
enforceable recorded liens shall be prohibited except as allowed by regulation.”

Pursuant to the authority and instruction given the commissioner by the Legislature as above stated, the commissioner
hereby sets forth the following rule to be followed by all title insurance companies and title insurance agents in complying
with such Article 9.08, viz.:

(a)  “Willful issuance” shall be defined as the issuance of a title insurance policy or binder with intent to conceal
information by suppressing or withholding title information, the consequence of which could result in a monetary
loss either to the title insurance company or to the Insured under the policy or binder.

(b.) "Insuring Around" shall not be construed as prohibiting the issuer of a title insurance policy or binder from issuing a policy or binder without taking exception to a specific lien, or liens, of record when sound underwriting standards and practices would not otherwise prohibit such issuance. Specifically, but not limited to, the term "insuring around" shall not include the issuance of a title insurance policy or binder under the following circumstances:

(1) Where liens securing obligations which, though not released of record, have been discharged to the satisfaction
of the title insurance company or agent, and the title insurance company or agent has evidence in its file that the
lien has been paid in full;

(2) Where funds are in escrow to pay same, and a recordable release is forthcoming and will be filed for record in
the ordinary course of business;

(3) Where liens, in the opinion of counsel, are barred by the statute of limitation;

(4) Where liens are inchoate and sufficient indemnity executed by a financial institution regulated by State or
Federal Government, such as a bank, savings and loan association, life insurance company or surety company
has been delivered to, and accepted by, the title insurance company, or where sufficient funds have been
deposited with the title insurance company or its agent to assure the ultimate payment and release of record of
the liens; provided the written consent of the Insureds (owner and mortgagee) shall be delivered to the title
insurance company and retained in its file;

(5) Where sufficient indemnity executed by a financial institution regulated by State or Federal Government, such
as a bank, savings and loan association, life insurance company or surety company is delivered to, and accepted
by, the title insurance company, or where sufficient funds have been deposited with the title insurance company
or its agent to protect against mechanic's liens by affidavits which are being contested or disputed; provided the
written consent of the Insureds (owner and mortgagee) shall be delivered to the title insurance company and
retained in its files;

(6) Where a title insurance company has previously issued a policy without taking exception to a specific lien and
is called upon to issue a new policy and is already obligated under such prior policy, and will not increase its
liability or exposure to the lien by the issuance of such new policy; provided the written consent of the Insureds
(owner and mortgagee) shall be delivered to the title insurance company and retained in its files;

(7) Where a title insurance company has erred as in (6) above, and another title insurance company discovers the
error in preparing to make a subsequent issuance, the second title insurance company may rely upon an
indemnity agreement and/or an agreement to defend by the first company, and insure against such lien;
provided the written consent of the Insureds (owner and mortgagee) shall be delivered to the title insurance
company and retained in its files;

(8) When issuing a Mortgagee Policy insuring the validity and priority of a lien, the issuer shall not be required to
itemize liens and leases that affect the title to the estate or interest, which are subordinate to the lien insured,
either by express subordination or by operation of law, unless requested to do so in writing by the insured in
which case paragraph 4 of Schedule B may be deleted, and the subordinate lien(s) and lease(s) shall be
excepted in Schedule B and the Company may insure therein such lien(s) and lease(s) are subordinate;
however, when issuing a Mortgagee's Title Policy Binder on Interim Construction Loan, the Company shall be
required to show all subordinate liens in Schedule B-Part 2 of said binder, but a statement may be made therein
that such lien(s) is subordinate. When insuring that a lien or lease is subordinate to the lien of the insured
mortgage, the Company shall state: "Company insures the insured against loss, if any, sustained by the insured
under the terms of the Policy if this item is not subordinate to the lien of the insured mortgage."

(9) In instances where federal estate taxes and state inheritance taxes have not been paid, but the title insurance
company:

	(a) Examines a balance sheet of the estate and determines that the estate will have no difficulty in paying its
	estate and inheritance taxes, and the title insurance company takes an indemnity from responsible persons
	protecting itself against loss due to unpaid estate and inheritance taxes, or

	(b) Requires sufficient money or other securities to pay estate and inheritance taxes to be left in escrow with it
	pending payment of such taxes, or pending the receipt of waivers of lien from the taxing authority or
	authorities, or

	(c) Examines the balance sheet of the estate and determines the estate will have no difficulty in paying its
	inheritance and estate taxes, and the title insurance company obtains a letter from a responsible person
	agreeing to see that such taxes are paid out of the assets of the estate.

(10) When a title insurance company previously issues a policy without taking exception to matters covered by the
Master Indemnity Agreement (T-29) and is called upon to issue a new policy and is already obligated under
such prior policy, and will not increase its liability or exposure to some matter by the issuance of such new
policy.

c. “Texas Master Indemnity Agreement (T-29).” A title insurance company may, in lieu of the execution of separate
transaction specific indemnity letters or agreements, indemnify another title insurance company in accordance with
P-11b(7) and/or P-11b(10) above by executing the Texas Master Indemnity Agreement (T-29). If a title insurance
company elects to provide another title insurance company with a master indemnity agreement, the Texas Master
Indemnity Agreement (T-29) must be used if the master indemnity agreement is intended to cover the liens and
other matters set forth in the Texas Master Indemnity Agreement (T-29).

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P-12. Abstract Plants

(a.)  Definition: An abstract plant used as the basis for issuance of title insurance policies in the State of Texas shall consist of fully indexed records showing all instruments of record affecting lands within the county for a period of at least 25 years immediately prior to the date of search. The indices pertaining to land shall be arranged in geographic order (i.e.: Lot and Block for subdivided lands, and by Survey or Section Number for acreage tracts). Miscellaneous alphabetical indices shall be maintained according to name. Said indices, land and miscellaneous, may be stored in a computer, and as to land, be subject to retrieval by reference to description of the property under search. The records of the abstract plant shall be maintained to current date, and shall include, but not be limited to, plat or map records, deeds, deeds of trust, mortgages, lis pendens, abstracts of judgment, federal tax liens, mechanic's liens, attachment liens, divorce actions, wherein real property is involved; probate records; chattel mortgages, attached to realty and financing statements relating to items which are, or are to become, attached to realty, if available for indexing from the office of the County Clerk of the county which is covered by said plant. b. Leased Abstract Plants: A lessee is not necessarily excluded from the phrase "owning and operating an abstract plant" as used in Article 9.30 of the Texas Title Insurance Act - 1967, but will be so excluded unless in actual, exclusive, physical possession and control of an abstract plant meeting the requirements of paragraph "a" above, operating it under the terms of a bona fide lease agreement, which places the lessee in exclusive possession and control of such abstract plant facilities for a determinable period and for a fixed rental. c. Joint Abstract Plants: Two or more Companies may combine their operation into a single abstract plant for the purpose of increasing the efficiency and speed of producing title evidence for examination purposes. In such event, if the base plants owned or leased by the individual participants are not merged into a single plant, then the base plants and the joint abstract plant, when considered as one, must meet all of the requirements of an abstract plant as set forth under paragraph "a" above. Ownership of such joint abstract plant may be by corporate ownership, joint venture or partnership agreement, but ownership must rest with the Company participants.

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P-13. Truth-In-Lending - The disclosures required in "CONSUMER CREDIT PROTECTION ACT," "TRUTH-IN-LENDING," and similar acts are duties imposed on lenders and constitute no part of the issuance of title insurance policies. Therefore, the title insurance companies and agents may not prepare or pass judgment on disclosure documents and notice of right of rescission documents as required by such acts or make any computation as required thereunder. However, this rule shall not prohibit said title insurance companies or agents from performing the ministerial act of inserting in loan disclosure statements, prior to the delivery of same and at the request of and under the direction of creditors, items or figures, not readily ascertainable by creditors prior to the actual closing of the transaction, which items are not a part of the financing charge; nor shall it prohibit said title insurance companies or agents from presenting said disclosure statements and notices of rights of rescission to borrowers and having said borrowers properly acknowledge and sign said statements. All of the foregoing shall be applicable, either fully or to the extent that it is not contrary to superior law, but in no event shall the title insurance company be liable, or its policy provide such liability, to an Insured in respect of such matters, except as expressly provided and authorized by this rule. return to top of page

P-14. Owner Title Policy Commitment to Texas Department of Transportation - The Owner Title Policy Commitment to the Texas Department of Transportation shall be issued only as follows:

(a)  The Commitment shall be issued only to the Texas Department of Transportation. b. As provided in Rate Rule R-23 As provided in Rate Rule R-23 there shall be a premium charge of $200.00 within sixty (60) days of issuance of an original Owner Title Policy Commitment or Owner Title Policy Commitment for eminent domain proceedings to the Texas Department of Transportation. If title is conveyed to the Texas Department of Transportation a credit of $200.00 shall be given upon issuance of an Owner Title Policy to Texas Department of Transportation by the Company which issued the previously issued commitment. No credit shall be allowed if title is not conveyed within thirty-six (36) months from the date of the original Commitment. c. The term "negotiation of said warrant" in said form is hereby defined to include the right of the Company to refuse to negotiate the warrant in the event the release of existing liens cannot be obtained, or in the further event adverse matters affecting the title become known to it subsequent to the date of the Commitment. d. The issuance of such Commitment to the Texas Department of Transportation, in those cases where there are outstanding and enforceable recorded liens which have been previously or contemporaneously disclosed to said Department, shall not be construed a violation of Rule P-11, "Insuring Around".

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P. 15. Commitment for Title Insurance to or for the Benefit of the Federal Deposit Insurance Corporation, Office of Thrift Supervision or Resolution Trust Corporation A Commitment for Title Insurance to or for the benefit of the Federal Deposit Insurance Corporation, Office of Thrift Supervision, or Resolution Trust Corporation shall be issued only as follows:

(a) To the Federal Deposit Insurance Corporation, Office of Thrift Supervision, or Resolution Trust Corporation, or as its interest may appear, as the proposed insured. (b) A premium charge shall be collected as provided in Rate Rule R-25. (c) The Commitment Form to be used shall be the then current promulgated Commitment Form, except such form shall, prior to issuance, be modified by providing in Schedule "C" of the form an expiration date of the Commitment, which expiration date shall not extend beyond one (1) year subsequent to the Commitment's effective date. (d) The commitment insurance amount shall be $25,000.00.

The provisions of this Procedural Rule P-15 shall not be applicable to any commitment for title insurance issued in connection with a contract of purchase and sale to which the Federal Deposit Insurance Corporation, Office of Thrift Supervision, or Resolution Trust Corporation is a party.* * (Replaces former P-15 which was withdrawn July 1, 1979.)

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P-16. Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) - The Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) shall be used only with respect to interim construction loans in which it is contemplated in good faith that the Company issuing the Interim Binder shall be asked to issue its Mortgagee Policy or Policies; issued simultaneously with Owner Policy or Policies of Title Insurance or at the basic rate, on a permanent loan or loans covering the identical property (in one or more parcels) when improvements are completed, but which permanent loan or loans may be made by a mortgagee or mortgagees other than the mortgagee named in the Interim Binder. The use of such Interim Binder shall be limited solely to interim construction loans and pledges of the interim construction notes and liens wherein: (i) the obligor on the indebtedness is an original contractor who is also the record owner of the land upon which improvements are to be constructed; and, (ii) the security document for the
indebtedness is not in the form of a Mechanic’s Lien contract.

Construction loans may include sums advanced for acquisition of land and/or to take up, renew or satisfy prior existing
liens on land upon which construction is to occur.

Interim Binder shall not be issued on vacant lots or tracts, except in connection with the immediate construction of
improvements thereon, nor shall such Interim Binder be issued after completion of improvements to which it relates, but this
does not prohibit the issuance of Extensions after completion of improvements. In all cases not specifically enumerated in
this rule, a Mortgagee Policy shall be used.

The Company shall be required to show all subordinate liens in Schedule B-Part 2 of the Interim Binder, but a statement
may be made therein that such lien(s) is subordinate.

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P-17. Electronically Produced Forms

(a) Permission to Electronically Produce

It shall be permissible for a Company to computer generate or electronically produce any Texas promulgated form. If a Company elects to use electronically produced forms, the Company shall use the appropriate promulgated language for the relevant form as set forth in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas. An "electronically produced form" shall be signed either with an original signature or by a safeguarded electronic signature as provided in subsection (e) of this rule and issued by the Title Insurance Agent or Direct Operation or Title Insurance Company preparing the form and shall state the name of the Title Insurance Company having liability under the title insurance form.

(b) Permissible Changes to Promulgated Forms

(1) It shall not be necessary for an electronically produced form issued by a Company to contain:

(A) the facsimile corporate execution of the Title Insurance Company; or,
(B) the facsimile corporate attest of the Title Insurance Company; or,
(C) the facsimile corporate seal of the Title Insurance Company.

(2) With the permission of its Title Insurance Company, it shall be permissible for a company to make the following non-substantive changes to an electronically produced form:

(A) omit the promulgated blank for inserting an endorsement number;
(B) omit the use of endorsement numbers if the Title Insurance Company elects not to individually inventory endorsements;
(C) add accounting information (such as, without limitation, county codes, statistical code numbers, rate rule references, and premium amounts) to the top or bottom margin of an electronically produced form; and,
(D) format general identifying information to be printed in convenient locations. For purposes of this sub-paragraph, general identifying information includes such items as (i) name of Title Insurance Company; (ii) name or title of form; (iii) form "T-____ " number, if applicable; and, (iv) signature blanks for the Company.

(c) Directly Issued Policies

This rule shall not affect the requirement for countersignature of a Directly Issued Policy pursuant to Procedural Rule P-31, which policy may be computer generated or electronically produced.

(d) Consumer Protection

The Company must comply with the provisions of the Electronic Signatures in Global and National Commerce Act, including the requirements for Consumer Disclosures set forth in Section 101 (c) of said act, and the Uniform Electronic Transactions Act, Texas Business and Commerce Code, Chapter 43, where applicable.

(e) Electronic Safeguards

Information that is generated, scanned, or otherwise stored electronically must accurately reflect the information set forth in the document or record as of the time it was first generated in its final form and must remain unaltered and accessible for later reference and audit.

(f) Document Retention

This rule shall not affect the requirements of document retention pursuant to Article 9.34, Texas Insurance Code and the rules promulgated thereunder, except that documents or records which are initially computer generated or electronically produced in conformity with this rule may be retained in that medium.

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P-18. Commitment for Title Insurance

A. After receipt of a bona fide order for an Owner Policy of Title Insurance on residential real property or for an Owner Policy not to exceed $300,000, the Company must deliver to the proposed insured a Commitment in the form approved by the State Board of Insurance. Delivery may be had upon the Proposed insured's authorized agent, other person in a fiduciary relationship with it, or its attorney, and if none of the aforementioned persons are available after using the Company's best efforts, then to the person designated by the person opening the order for insurance. Such Commitment shall be delivered as soon as practicable, using the Company's best efforts, allowing reasonably sufficient time for review prior to the closing of the transaction.

B. The Commitment for Title Insurance shall be issued only as preliminary instrument in instances in which the Company has a bona fide order for the policy or policies of title insurance specified therein, to be issued within 90 days from the effective date of the Commitment as shown under Schedule A of said Commitment.

C. For title insurance policies not included in A. above, the Commitment must be issued if the proposed insured so requests.

D. The Company shall not be required to issue a Commitment on an order it is unwilling to insure or when a bona fide order for the policy is placed after the real estate transaction is closed.

E. The liability and obligations under the Commitment end ninety (90) days after the Commitment's effective date, or when the Policy is issued, whichever occurs first, unless the failure to issue the Policy is the Company's fault. In no event shall such Commitment for Title Insurance be used in lieu of a policy of title insurance.

F. Amount(s) of the policy or policies to be issued shall be as established in the same manner as to the amount of coverage as established under Rate Rules R-3 and R-4.

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P-19. When a Mortgagee Policy is to be issued and the full proceeds of the loan have not been disbursed by the insured therein, the "Pending Disbursement" clause in Paragraph "P-8.b.(1)" must be inserted as an exception to said policy. When the full proceeds of the loan have been disbursed by the insured, the exception provided for above may be eliminated by the issuance of the promulgated endorsement form containing the appropriate language to effect such elimination. return to top of page

P-20. Amendment of Standard Exception in Mortgagee Policy or Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) Relating to Taxes - In connection with the issuance or amendment (after issuance) of any Mortgagee Policy or of any Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder), and upon payment of the premium required under Rate Rule R-19, the words: "and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership" as contained in the standard tax exception (designated "3." in Schedule B of the Mortgagee Policy or in Schedule B-Part 1 of the Interim Binder) may be deleted by: (a) deletion of such words upon the policy or binder form; or (b) by attachment to the policy or binder of (i) endorsement form T-30, or (ii) a completed form T-3 providing for the deletion of the hereinbefore quoted words. return to top of page

P-21. Additional Requirements for Contents of Commitment for Title Insurance - Each Title Insurance Company and each Title Insurance Agent, licensed to do business in Texas, shall, in connection with the issuance of each Commitment for Title Insurance whereby a commitment is made to issue either a binder or policy of title insurance (insuring either a lien or the title to real property), add to the promulgated Commitment for Title Insurance form an additional schedule (which schedule shall be designated "Schedule D") setting forth the following:

1. As to each Commitment for Title Insurance, the issuing Title Insurance Company shall disclose:

(a) A listing of each shareholder owning or controlling, directly or indirectly, ten percent (10%) or more of the shares of the Title Insurance Company; there shall also be disclosed all individuals, partnerships, corporations, trusts or other entities owning ten percent (10%) or more, of those entities directly owning ten percent (10%), or more, of the Title Insurance Company. Such additional disclosure requirement shall not, however, apply to a publicly held company whose stock is traded on a stock exchange or in the over-the-counter market or is a part of an insurance holding company system the parent of which is so publicly held;

(b) The names of the directors of the Title Insurance Company; and

(c) The names of the president, the executive or senior vice-president, the secretary and the treasurer of the Title Insurance Company.

In connection with such disclosure, each Title Insurance Company (i) may use in such listing the officers and directors so holding each such respective office on the December 31st immediately preceding the date of such Commitment for Title Insurance, and (ii) shall furnish to each of its appointed Title Insurance Agents the above required information for such Title Insurance Agent to comply with this Paragraph 1 of this Rule P-21; and (iii) each Title Insurance Agent shall be entitled to rely upon and use the information furnished to the Title Insurance Agent by its appointing Title Insurance Company. 2. As to each Commitment for Title Insurance issued by a (i) a Title Insurance Agent, or (ii) a Title Insurance Company, where not issued by a Title Insurance Agent, the issuing Title Insurance Agent or Title Insurance Company shall disclose:

(a) A listing of each shareholder, owner, partner, or other person having, owning or controlling one percent (1%) or more of the Title Insurance Agent that will receive a portion of the premium.

(b) A listing of each shareholder, owner, partner, or other person having, owning or controlling 10 percent (10%) or more of an entity that has, owns or controls one percent (1%) or more of the Title Insurance Agent that will receive a portion of the premium.

(c) If the Agent is a corporation: (i) the name of each director of the Title Insurance Agent, and (ii) the names of the President, the Executive or Senior Vice-President, the Secretary and the Treasurer of the Title Insurance Agent.

(d) The name of any person who is not a full-time employee of the Title Insurance Agent and who receives any portion of the title insurance premium for services performed on behalf of the Title Insurance Agent in connection with the issuance of a title insurance form; and, the amount of premium that any such person shall receive.

(e) For purposes of this paragraph 2, "having, owning or controlling" includes the right to receipt of a percentage of net income, gross income, or cash flow of the Agent or entity in the percentage stated in subparagraphs (a) or (b).

        3.     As to each Commitment for Title Insurance, the following additional language shall be included in each Schedule D, together with all required information included within the blanks contained below: 

                “You are entitled to receive advance disclosure of settlement charges in connection with the proposed transaction to which this commitment relates. Upon your request, such disclosure will be made to you. Additionally, the name of any person, firm or corporation receiving a portion of the premium from the settlement of this transaction will be disclosed on the closing or settlement statement. 

                “You are further advised that the estimated title premium* is: 

                                Owners Policy                                                                                      $                                                 

                                Mortgagee Policy                                                                                 $                                                 

                                Endorsement Charges                                                                             $                                                 

                                Other                                                                                                   $                                                 

                                Total                                                                                                   $                                                   

        Of this total amount: $_________________(or %) will be paid to the policy issuing Title Insurance Company; $_________________(or %) will be retained by the issuing Title Insurance Agent; and the remainder of the estimated premium will be paid to other parties as follows: 

Amount                                                                                 To Whom                                              For Services 

$                                                   (or%)                                                                                                                                                     

$                                                   (or%)                                                                                                                                                     

$                                                   (or%)                                                                                                                                                     

                              “*The estimated premium is based upon information furnished to us as of the date of the Commitment for Title Insurance. Final determination of the amount of the premium will be made at closing in accordance with the Rules and Regulations adopted by the Commissioner of Insurance.”

        Each Title Insurance Company and each Title Insurance Agency shall, prior to usage, file its proposed Schedule D form with the State Board of Insurance; in like manner each Title Insurance Company and each Title Insurance Agent shall file all amended Schedule D forms with the Commissioner of Insurance prior to usage.   

        Nothing contained in this Rule P-21xe "P-21" shall ever be deemed or considered to require the issuance of a Commitment for Title Insurance prior to the issuance of any policy or binder for title insurance.

        Each Title Insurance Agent and Title Insurance Company may, in preparing its Schedule D, use whatever reasonable format it elects, provided that such format does not alter or delete the furnishing of the disclosures hereby required. It is the express intent of this paragraph to enable usage of electronic equipment in preparation of the required Schedule D.

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P-22. Payment of a Fee for Examination and/or Closing - No payment shall be made by a Title Insurance Company, Title Insurance Agent, Escrow Officer or any employee or agent of any of them, to any Person who is not its bona-fide employee, for examination of a title and/or closing a transaction unless:

(A) Such Person is (i) a Title Insurance Company as defined in Article 9.02, Insurance Code, and qualified to do business in the State of Texas, (ii) a Title Insurance Agent as defined in Article 9.02, Insurance Code, and licensed to do business in the State of Texas by the Texas Department of Insurance, or (iii) an attorney at law duly licensed by the Supreme Court of Texas to practice law in the State of Texas, to the extent not inconsistent with Article 9.34, Texas Insurance Code, or (iv) any Person legally authorized to perform such services; and

(B) Such Person has performed all of the services described in P-1, paragraph f, that such Person is legally authorized to perform, and/or the examination of the title required for the issuance of a commitment for title insurance prior to the issuance of any such commitment, construction binder, policy or other contract of title insurance, to determine the condition of the title to be insured. If the parties to the transaction are located in different counties, this paragraph of this rule does not prohibit payment to a Person who has actually performed all the services described in P-1, paragraph f in relation to either (i) the seller(s) or the buyer(s) or (ii) the mortgagor(s) or the mortgagee(s) for closing the transaction and issuance of the policy; and

(C) Timely disclosures of such payment have been made as required by Rule P-21 and Article 9.53; and

(D) Any payment made must be commensurate with the services actually performed; and

(E) The Person rendering the service shall have filed with the Company at least thirty (30) days prior to the rendering of such service a written schedule of charges normally imposed by such Person for such services (Schedule) and such Schedule shall have been agreed to and approved by the Company as being reasonable charges for such services. However, payments to licensed title insurance agents are excluded from the requirements of this paragraph (E); and

(F) The Person rendering the service shall have presented to the Company, at or prior to the time of payment of said services, a written itemized statement or invoice which clearly sets forth in detail the actual services rendered and billed for in representing the Company in the respective settlement, closing and/or examination, and such Company verifies, in writing, that such services were actually rendered in accordance with form T-00; and

(G) In the event of collection of the title insurance premium by such Person, the entirety of such premium shall have been remitted to the Company; and

(H) No portion of the charge for the services actually rendered shall be attributable to, and no payment shall be made for the solicitation of, or as an inducement for the referral or placement of the title insurance business with the Company; and

(I) Any portion of any payment inconsistent with the requirements hereof, or any payment by the Company to any Person for the solicitation of, or as an inducement for the referral or placement of title insurance business, is deemed to be a violation of Article 9.30; and

(J) The Company shall keep written itemized statements or invoices, and the Schedule, in its official records for a period of three years and shall make such copies thereof available to the Texas Department of Insurance and its representatives for inspection and duplication upon request.

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P-23. Division of Premiums between Title Insurance Agents and Title Insurance Companies.

(a) All agency contracts between title insurance companies and title insurance agents must provide for the division of premium between the title insurance company and its title insurance agent on the following basis:

(b) At each hearing required by or held pursuant to Article 9.07, Texas Insurance Code, the Commissioner shall consider what portion of gross title insurance premiums is to be remitted to or retained by the title insurance companies (the Underwriter Portion of the Premium) and what portion is to be remitted to or retained by the title insurance agents (the Agent Portion of the Premium) until after the next hearing is held. The Commissioner shall establish such portions contemporaneously with the fixing and promulgating of the premium rates to be charged to the public.

(c) The sum of the Underwriter Portion of the Premium and the Agent Portion of the Premium shall be the Basic Premium for title insurance charged to the public. Wherever the words "Basic Premium", "Basic Rate" or "Basic Premium Rate" shall appear or be referenced in any other rules, they shall mean the Basic Premium described in the preceding sentence.

(d) The amounts of the Underwriter Portion of the Premium and the Agent Portion of the Premium shall be set by the Commissioner in view of the experience of the title insurance companies as a group (excluding all agents affiliated with a title insurance company, all direct operations of a title insurance company, and all agents unaffiliated with any title insurance company).

(e) The division of premium established by the Commissioner shall be the same for all agents unaffiliated with any title insurance company, all affiliated agents and all direct operations.

(f) During 2000, and thereafter until changed by the Commissioner, on all title insurance written by title insurance agents the division of premiums between title insurance companies and title insurance agents shall be as follows:

(1) title insurance companies shall receive 15% of each title insurance premium, and
(2) title insurance agents shall receive 85% of each title insurance premium;
(3) provided, however, all Assessment Recoupment Charges authorized and approved by the Commissioner shall be apportioned only to certain underwriters pursuant to other orders and rules of the Commissioner, and shall not be apportioned pursuant to this Rule P-23.

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P-24. Payment for Services Rendered by a Title Insurance Company, Title Insurance Agent, or Direct Operation to Another Title Insurance Company, Title Insurance Agent or Direct Operation.  In negotiating the portion of the premium to be paid by a Title Insurance Company (“Company”), Title Insurance Agent (“Agent”), or Direct Operation (“Direct Operation”), including any of their attorneys who are licensed escrow officers (“Escrow Officers”) to another Company, Agent, Direct Operation or any of their Escrow Officers for: (i) furnishing title evidence, (ii) furnishing title evidence and examining title, (iii) closing a transaction, or (iv) closing a transaction and examining title, the payments shall not exceed the following percentages as applied to the portion of the title insurance premium remaining after payment of the underwriter's portion of the premium:

(a) If the insured policy amount is in excess of $125,000.

Furnishing title evidence, or furnishing title evidence and title examination by the Company, Agent or Direct Operation furnishing the evidence	50%
Closing the transaction, or closing the transaction and title examination	50%

(b) If the insured policy amount is $125,000, or less.

Furnishing title evidence, or furnishing title evidence and title examination by the Company, Agent or Direct Operation furnishing the evidence	90%
Closing the transaction, or closing the transaction and title examination	10%

In addition to these percentages, reasonable charges may also be made and paid for copies of documents.

Any payment in excess of the sums calculated by use of the percentages specified in this Rule shall be deemed to be an unreasonable and excessive amount, unless the Company, Agent, or Direct Operation providing such services and the Company, Agent, or Direct Operation, paying for such services (i) under section (a) above enter into a prior written agreement not less than ninety (90) days prior to closing specifying and agreeing to percentages (but not services) different from those provided in this Rule or (ii) under section (b) above are licensed in the same county or in contiguous counties and enter into a prior written agreement not less than ninety (90) days prior to closing specifying and agreeing to percentages (but not services) different from those provided in this Rule.  All payments must be remitted no later than the thirtieth (30th) day after the date of recording by the county clerk of an instrument conveying an interest in the land.

On and after January 1, 2013, the insured policy amount in sections (a) and (b) above shall be $150,000.00.

This Rule, including the provisions pertaining to prior written agreements, and the percentages specified in this Rule apply to each Escrow Officer of a Company, Agent, or Direct Operation to the same extent and in the same manner as is applicable to the Company, Agent, or Direct Operation for which the person is acting as an Escrow Officer.

Nothing in this Rule shall affect the division of premium between a title insurance company and its subsidiary title insurance agent when the title insurance company directly issues its policy or contract of title insurance company pursuant to § 2704.002, Insurance Code.  For purposes of this Rule, a subsidiary is a company at least fifty percent (50%) of the voting stock of which is owned by the title insurance company or by a wholly owned subsidiary of the title insurance company. 

The amendments to P-24 adopted on May 1, 2008, are effective July 1, 2008. return to top of page

P-25. Reasonable Time for Furnishing Title Evidence - Pursuant to Art. 9.34, Texas Insurance Code, a reasonable time for furnishing title evidence is determined to be as follows:

(1) With Prior Title Evidence Satisfactory to the Title Insurance Company:

(a) On Acreage Tracts - 15 days. (b) On Subdivision Tracts - 10 days.

(2) Without Prior Title Evidence Satisfactory to the Title Insurance Company:

(a) On Acreage Tracts - 30 days. (b) On Subdivision Tracts - 21 days.

These time periods shall begin on the date the order for title evidence is received. If all title insurance agents and direct operations for the county refuse to provide title evidence within such time and for the payments provided in Rule P-24, a title insurance company may directly issue its policy if the title insurance company obtains the best evidence available. return to top of page

P-26. Copies of Policies Provided to Agents. Title insurance agents or direct operations that provide title evidence on which policies of title insurance are issued shall be provided with legible complete copies of all policies or contracts of title insurance actually issued in the transaction within 30 days from the date of the policy, which is determined to be a reasonable time. return to top of page

P-27. Disbursement From Escrow or Trust Fund Accounts. This rule shall implement Article 9.39A, Texas Insurance Code.

A. Definitions

1. "Good funds" means:

                  a.   Cash or wire transfers;

                  b.   Cashier’s check.  For purposes of this Rule, a cashier’s check is defined to mean a check that is (1) drawn on a financial institution; (2) signed by an officer or employee of the financial institution on behalf of the financial institution as drawer; (3) a direct obligation of the financial institution; and (4) provided to a customer of the financial institution or acquired from the financial institution for remittance purposes. 

                  c.    Certified check.  For purposes of this Rule, a certified check is defined to mean a check with respect to which the drawee financial institution certifies by signature on the check of an officer or other authorized employee of the financial institution that:  (1) the signature of the drawer on the check is genuine; (2) the financial institution has set aside funds that are equal to the amount of the check and will be used to pay the check; or (3) the financial institution will pay the check upon presentment. 

                   d.  Teller’s check.  For purposes of this Rule, a teller’s check is defined to mean a check (1) provided to a customer of a financial institution or acquired from a financial institution for remittance purposes, (2) that is drawn by the financial institution, and (3) is drawn on another financial institution or payable through or at a financial institution.

                   e.   Any other instrument that has been determined by the Board of Governors of the Federal Reserve System to be the functional equivalent of a cashier’s, certified or teller’s check. 

                  f.    Uncertified funds in amounts less than $1,500, including checks, traveler's checks, money orders, and negotiable orders of withdrawal; provided multiple items shall not be used to avoid the $1,500 limitation;

                  g.   Uncertified funds in amounts of $1,500 or more, drafts, and any other items when collected by the financial institution; 

                  h.   State of Texas Warrants; 

                  i.    United States Treasury Checks; 

                  j.    Checks drawn on an insured financial institution and for which a transaction code has been issued pursuant to, and in compliance with, a fully executed Immediately Available Funds Procedure Agreement (Form T-37) or a fully executed Immediately Available Funds Procedure Agreement (Agent Designation for Federally-insured Lender) (Form T-37A) with such financial institution;  

                  k.   Checks by city and county governments located in the State of Texas. 

2.   "Received and deposited" means: 

                              a.   Good funds are in the possession of an employee or representative of the trustee, and   

                              b.   A record of the actual date of receipt has been entered on the books of the trustee, and 

                              c.    The funds are actually delivered for deposit to the financial institution in a timely manner, which shall not exceed three business days as defined in Federal Reserve Board Regulation CC, 12 C.F.R., Part 229, after the funds are received. 

                              d.   In the case of a wire transfer, good funds shall be considered to be "received and deposited" when the financial institution notifies the trustee that the funds have been received. 

3.   "Trust account" or “escrow account” means an account maintained at a financial institution for holding and disbursing funds to be paid to and on behalf of parties to a transaction and which are subject to annual audit pursuant to Art. 9.39, Texas Insurance Code.

            4.   "Transaction" means the purchase and sale, mortgage, or other act for which
                  a trustee receives trust funds and a guaranty file is opened.

                   5.   "Trustee" as used in this rule means a title insurance company, title insurance agent, direct operation, or escrow officer that maintains a trust fund account.

                   6.   "Financial institution" as used in this Rule has the meaning given to “depository institution” in 12 USC Sec. 461(b)(1)(A), which includes (1) any insured bank, mutual savings bank, savings bank, or savings association as defined in the Federal Deposit Insurance Act or (2) any insured credit union.

                   7.  “Insured” as used in this Rule means that a financial institution is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF).  Any cashier’s check, certified check, teller’s check or other instrument as used in this Rule must be drawn upon a financial institution insured by the FDIC or NCUSIF. In addition, for teller's checks, both the drawer and drawee financial institutions must be insured.

       B.   General Provisions          

            1.  Good funds in an amount equal to all disbursements must be received and deposited before any disbursement may be made.  Partial disbursements, prior to the receipt and deposit of good funds, are not permitted.  If a party to the transaction submits too much money, that overage which will not ultimately be a part of the transaction may be refunded at or prior to settlement.

             2.  A record of all receipts reflecting the date on which the funds are actually received must be entered on the books of the trustee before any disbursements are made.

             3.  The financial institution or branch of a financial institution in which the trust fund account is maintained must be located within the geographic bounds of the State of Texas.

             4. Even though funds are defined as good funds in this Rule, a trustee is not required to disburse if reasonable business judgment would indicate that the funds may not be collected.

             5.  An Immediately Available Funds Procedure Agreement (Form T-37) must be fully executed by the Financial Institution, the Federally-insured Lender and the Title Company prior to issuance of checks intended to qualify pursuant to subparagraph A.1.j. of this rule.  If the Federally-insured Lender has appointed an Agent and delegated to the Agent some of the duties and responsibilities of the Federally-insured Lender, the Title Company must use an Immediately Available Funds Procedure Agreement (Agent Designation for Federally-insured Lender) (Form T-37A) which must be fully executed by each of the four parties to the Agreement including the Agent for the Federally-insured Lender.

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P-28. Requirements for Continuing Education for Title Agents and Escrow Officers.

1. Purpose and Scope. The purpose of this rule is to set forth procedures and requirements for certification of continuing education courses for title insurance agents licensed under the Insurance Code, Article 9.36, and/or escrow officers licensed under the Insurance Code, Article 9.43, as authorized under the Insurance Code, Article 9.58. This rule shall not apply to a corporate agent licensee.

2. Definitions. The following words and terms, when used in this rule, shall have the following meanings, unless the context clearly indicates otherwise.

Continuing Education Coordinator - The person in the Agents License Section, Licensing Group or in the Title Division of the Texas Department who is delegated authority to review continuing education courses and licensee compliance and who may be addressed as follows: Texas Department of Insurance, Continuing Education Coordinator, 333 Guadalupe Street, Post Office Box 149104, Austin, Texas 78714.

Department - The Texas Department of Insurance.

Licensee - Any individual person holding a license under the authority of the Insurance Code, Article 9.36 and/or Article 9.43.

Provider - A statewide title insurance association, statewide title agents' association or professional association, or a local chapter of a statewide title insurance or title agents' association or professional association; an accredited college or university; a proprietary school as defined in the Texas Proprietary School Act (the Education Code, Chapter 32); the State Bar of Texas; an educational publisher; a title insurance company authorized to do business in the State of Texas; a company owning one or more title insurance companies authorized to do business in the State of Texas; a Texas public school system; or an individual accredited by any of the organizations described in this paragraph as an instructor.

3. Applicability of Requirements.

(a) Title insurance agents licensed under the Insurance Code, Article 9.36, and escrow officers licensed under Article 9.43 shall complete the required number of hours of continuing education set forth in subparagraph (c) below for each reporting period, unless otherwise exempt.

(b) The reporting period is from the issue date or last renewal date of the license to the expiration date or date of cancellation of the license.

(c) A Licensee subject to relicense shall complete continuing education on a prorated schedule for each reporting period. The number of required credit hours shall be based upon the reporting period from the issue date of the original license or the most recent renewal date of the license to the relicense date:

In accordance with the following schedule for all licenses renewing on or after July 1, 2004.

LICENSE PERIOD REQUIRED HOURS   (INCREMENTS ARE IN FULL MONTHS - DO NOT COUNT PARTIAL MONTHS)

LICENSE PERIOD Less than 4 months 4 months up to and including 6 months 7 months up to and including 9 months 10 months up to and including 12 months 13 months up to and including 15 months 16 months up to and including 18 months 19 months up to and including 21 months 22 months or more

REQUIRED HOURS 0 4 5 6 7 8 9 10

4. Exemption from Continuing Education.

(a) The continuing education requirement shall not apply to title insurance agents and escrow officers who meet the criteria of illness, medical disability or circumstances beyond the control of the licensee.

(b) A licensee shall apply for an exemption from or an extension of time for meeting the continuing education requirements by completing an application form obtained from the Texas Department of Insurance and submitting all requested documents and information. The form must be received within the reporting period for which it applies and shall include at least the following:

(1) Statement of the exact nature of the illness, medical disability or other extenuating circumstances beyond the control of the licensee. 

(2) Evidence in the form of medical reports from attending physician(s) and insurance claims regarding the illness or medical disability of the licensee, or evidence of insurance claims and/or other documentation as determined regarding circumstances beyond the control of the licensee. 

(3) Assessment of the condition of the licensee whether it is temporary, permanent or unknown.

(4) Statement as to whether the licensee will or will not be able to perform activities including any acts of a title agent or escrow officer.

(5) Estimated date when the licensee will be able to perform any activities including any acts of a title agent or escrow officer in accordance with the medical reports or other documents pertaining to circumstances beyond the control of the licensee.

(6) Any other information that may be requested by the Department.

5. Course Criteria.

(a) The purpose of continuing education is to increase the licensee's professional competence with regard to title insurance coverage which can be used to assist customers in making informed decisions regarding their insurance needs.

(b) The course shall have a stated purpose that reflects the goal(s) or the overall intent of the course.

(c) The course shall have specific written learning objectives which support the achievement of the purpose statement of the course. The learning objectives are the desired outcomes for the learning process and identify the knowledge, skills, or attitudes the licensee is expected to obtain.

(d) The course shall have a method of evaluation which measures how effectively the course meets its objectives. 

(e) Persons conducting a course should be knowledgeable and well versed on the topic(s) and be able to conduct/instruct a class and provide appropriate feedback on questions. 

(f) The course content must be designed to increase the licensee's knowledge and understanding of one or more of the following: title insurance principles and coverages; applicable laws, land title search or examination; mortgage lending; closing transactions; rules and regulations promulgated by the commissioner; recent and prospective changes in coverages, law, regulation, and practice; management of the licensee's insurance business; or duties and responsibilities of the title insurance agent or escrow officer. 

(g) A State Bar of Texas course is acceptable as an approved course as long as the course includes material pertaining to the business of title insurance, real property, surveys, mortgage lending or transfer of land titles.

(h) Each course must be reviewed every two years by the provider and updated to remain relevant to the professional development of a licensee.

6. Types of Courses. Continuing education courses shall consist of three types:

(1) Classroom courses may include lectures, seminars, audio, video and computer-based instruction, remote classroom training and teleconferences that take place in a classroom setting or a monitored environment that allows question and answer or discussion period.
Internet, CD-Rom, DVD or other remote computer-based presentations must have an interactive electronic component that has a means to reasonably authenticate the student's identity and attendance.

(2) Self-study courses must be certified for continuing education and may include textbook, audio, video, computer based instruction, or any combination of these in an independent study setting with some measurement of completion of the objective of the course.

(3) State Bar of Texas approved credit courses which pertain to the business of title insurance, real property, surveys, mortgage lending or transfer of land titles.

7. Hours of Credit. Each provider must complete and submit a New Provider Application. The provider must complete and submit a Course Application for each course. Credit hours for continuing education courses are determined by the methods set forth in paragraphs (1) - (9) of this subsection.

(1) Credit for classroom courses is determined by the number of minutes of actual instruction time divided by 60. Actual instruction time is considered the amount of time devoted to the actual instruction/reading of the topic, and does not include breaks, lunch or dinner, introductions of speakers, instructions, etc. No more than 10 hours of credit shall be recognized for any one course.

(2) Credit for independent self-study courses shall be calculated by using a total of 2,600 words as equal to one credit hour. Total words of a text divided by 2,600 words will equal the course credit hours. No more than 4 hours of credit shall be recognized for any one course.

(3) Credit for applicable State Bar of Texas courses is determined by the number of credit hours approved by the State Bar of Texas, but only those hours which pertain to title insurance, real property, surveys, mortgage lending or transfer of land titles. No more than 10 hours of credit shall be recognized for any one course. No self-study hours approved by the State Bar of Texas will be accepted.

(4) Credit for accredited college or university courses is determined by the number of semester hours approved for the course by the college or university, but only those hours which pertain to title insurance, real property, surveys, mortgage lending or transfer of land titles. Each semester hour will be equal to 8 credit hours.

(5) Credit for title insurance agents or escrow officers who teach a qualified continuing education course or a portion of a course is determined by the number of hours of course instruction or by the number of hours assigned to the full course whichever is applicable plus the actual hours of preparation for teaching the course reported by the teacher to the provider. The provider of the course is responsible for issuing a letter of certification reflecting the number of credit hours of preparation and the number of credit hours the individual taught.

(6) Credit for any course may be issued for less than the number of hours the course was assigned (i) to an instructor teaching a portion of the course who does not attend the full course and (ii) to a licensee for attending only a portion of the course. Providers must certify the actual number of hours taught or attended on the certificates of completion it issues to teachers or licensees. 

(7) Credit for completing the same continuing education course more than once within the same reporting period shall not be granted for compliance with the continuing education requirement. Credit for teaching the same continuing education course more than once within a three-month period shall not be granted for compliance with the continuing education requirement.

(8) The licensee shall report to the Department on the license renewal form the course title or course number and the number of credit hours of certified continuing education courses claimed by the licensee for all license renewals.

(9) An approved provider may request that a certified course be assigned to another provider by completing and submitting a Course Assignment Agreement to the Department.

8. Course Requirement for Successful Completion.

(a) Providers must use attendance rosters or an assessment measurement to certify completion of all or a portion of a classroom continuing education course. Attendance of at least 90% of the course is required to complete the course when using attendance rosters. Attendance of at least fifty-five (55) minutes of each hour claimed for a portion of a course is required for each hour of credit issued to a licensee attending only a portion of the course. A means to ensure that the licensee attended the full or at least 90% of the course or the requisite number of minutes for a portion of the course claimed for credit must be established.

(b) Providers must use a written examination to evaluate the licensee's competency and the effectiveness of the self-study courses and classroom courses that do not use attendance as the means of completion. Written examinations shall meet the criteria set forth in paragraphs (1) - (7) of this subsection.

(1) Final examination questions shall not be the same or substantially the same questions the licensee previously encountered in the course materials or review exams.

(2) Security measures shall be in place to maintain the security and integrity of the examination and ensure that the enrolled licensee is the individual who took the examination.

(3) Answers to the examination shall not be given to the licensees at any time before, during or after the course.

(4) Examinations shall be graded by an authorized staff member.

(5) Licensees shall be allowed to retake an examination if a 70% passing score is not achieved. The retest shall consist of an alternate examination consisting of different questions from the original examination.

(6) Final examinations shall consist of three exams which are distributed alternatively to enrollees of the course, and are revised/updated every two years by the provider consistent with the course update/revision.

(7) The final examination shall be a comprehensive examination of the course and thoroughly test the licensee's knowledge of the content of the course.

(c) Providers must issue certificates of completion to licensees who successfully complete all or a portion of a certified course. The certificate must be issued in a manner which will ensure that the person receiving the certificate is the licensee who took the course, be issued within a reasonable period of time, and be completed to reflect the date the licensee took the course/examination. Information on the certificate of completion can be duplicated from a form obtained from the Texas Department of Insurance. A certificate of completion is valid to renew multiple licenses issued under the Insurance Code, Articles 9.36 and 9.43, if such completion occurred within the renewal period of each license.

9. Course Certification.

(a) Providers of courses must certify each continuing education course with the Texas Department of Insurance prior to offering the course using a certification form obtained from the Texas Department of Insurance. All courses filed with the Department for certification shall be deemed approved unless the Continuing Education Coordinator notifies the provider of disapproval of certification within 30 days of the date on which the certification is filed.

(b) Courses from the State Bar of Texas must be certified with the department to recognize the number of credit hours approved for the course.

(c) Providers must certify within 150 days from the effective date of this rule on a form obtained from the Texas Department of Insurance that each course offered for continuing education credit meets these requirements.

(d) Providers must notify the department when a course is discontinued or no longer active, and when there is a change in the provider's name, address or telephone number in order for the department to maintain an up-to-date registry of courses and to prepare, if courses are to be available to the public, a list of such courses upon request.

10. Obtain Forms. Application forms for exemption, provider and course certification forms, certificate of completion forms, and the list of courses can be obtained from the Texas Department of Insurance, Continuing Education Coordinator, Agent Activity, 333 Guadalupe, P. O. Box 149104, Austin, Texas 78714-9104.

11. Appeals. A decision of the Continuing Education Coordinator to deny an application for an exemption from or extension of time for meeting continuing education requirements or a decision disapproving certification of a continuing education course may be appealed to the Director of Licensing, Agent Activity, who shall decide the appeal within 30 days following the filing of the appeal. An appeal of the Director of Licensing decision may be appealed to the Commissioner.

12. Licensee Compliance.

(a) Licensees may choose courses from any of the courses approved for their type of license which are certified with the Texas Department of Insurance to meet their continuing education compliance requirements.

(b) Title insurance agents and escrow officers shall attach copies of completion certificates as part of the license renewal or submit a certified summary of completion certificates. Each licensee must maintain evidence of course completion for each course for the current and next preceding renewal period which generally consists of four years.

(c) Evidence of compliance is a certificate of completion from a provider of the course which has been successfully completed.

13. Audit of Continuing Education Records.

(a) All continuing education records and evidence of continuing education compliance of licensees must be maintained for a minimum period of four years and are subject to the review of the department at any time. Accuracy of a licensee's records is subject to verification at any time.

(b) All continuing education records, course rosters, and all other course materials of providers must be maintained for at least four years and are subject to the review of the department at any time.

(c) If continuing education records are audited or reviewed and the validity or completeness of same are questioned, the licensee or provider shall have 30 days to correct discrepancies or submit new documentation.

14. Failure to Comply.

(a) Failure to comply with the continuing education requirements in the absence of a valid exemption, or falsification of records of compliance by the licensee is subject to disciplinary action after notice and hearing. Disciplinary action may include a fine, suspension, revocation or cancellation of license in accordance with the Insurance Code, Chapter 82, and any other applicable laws or statutes.

(b) Failure to comply with the rules or falsification of any records by the provider may subject the courses of the provider to be removed from the list of certified courses.

(c) Continuing education requirements must be completed by the licensee’s renewal date. If continuing education requirements are not met by the renewal date, the license will not be renewed. The 90-day late renewal filing cannot be used to complete continuing education requirements.

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P-29. Amendment of Standard Exception in Mortgagee Policy or Mortgagee Title Policy Binder on Interim Construction Loan (Interim Binder) Relating to Taxes Not Yet Due and Payable - In connection with the issuance of a Mortgagee Title Policy or Mortgagee Title Policy on Interim Construction Loan (Interim Binder), the Company may, if satisfied that all taxes, standby fees and assessments by any taxing authority for the year of the issuance of the Mortgagee Policy or Interim Binder are not yet due and payable, and upon payment of the premium in R-24, state the following after the standard tax exception: "Company insures that standby fees, taxes and assessments by any taxing authority for the year ________ are not yet due and payable." return to top of page

P-30. Guaranty Assessment Recoupment Charge. - Whenever an assessment has been made by the Commissioner upon title insurance companies (the "Assessed Companies") pursuant to Section 7 of Article Section 7 of Article 9.48, Insurance Code, and the Board has promulgated a special additional charge of up to 1% of a subsequent year's premium rates, pursuant to Section 15 of Article 9.48, to permit the Assessed Companies to recoup a portion of such assessment, the special additional charge shall be collected, distributed and accounted for in the following manner:

(1) The special additional charge (hereinafter referred to as the "Guaranty Assessment Recoupment Charge" or "Recoupment Charge") shall be collected upon every title insurance policy, whether issued separately or simultaneously, and every other title insurance insuring form for which a premium is charged, including, but not limited to, endorsements and construction loan binders. It shall be collected directly from the persons paying the premiums for the policies and forms by all title insurance agents (including all insurers' direct operations and all title attorneys as defined in Section 2(d), Article 9.56, Insurance Code) and shall be remitted by such agents to the Texas Title Insurance Guaranty Association (the "Association") quarterly, along with the agent's remittance form, in accordance with the following schedule:

(a) those funds collected during the first calendar quarter shall be remitted on or before the next May 1; (b) those funds collected during the second calendar quarter shall be remitted on or before the next August 1; (c) those funds collected during the third calendar quarter shall be remitted on or before the next November 1; and, (d) those funds collected during the fourth calendar quarter shall be remitted on or before the next February 1.

(2) This charge shall be disclosed as a separate itemized charge entitled "Guaranty Assessment Recoupment Charge" on the closing/settlement statement, or, if a closing/settlement statement is not used, on the billing for the endorsement, binder or other insuring form. The agent shall forthwith deposit all Recoupment Charge funds into an audited escrow or trust account, and, for that purpose, may use the same account into which it deposits the State of Texas Policy Guaranty Fees. The agent is responsible for the actual remittance of such funds to the Association,and must maintain an accurate record of the amount of Recoupment Charge funds it has collected, the amount it is holding on deposit and the amount it has remitted. (3) Within thirty days after each of the dates mentioned in paragraph (1), above, the Association shall distribute to each Assessed Company that company's pro rata share of the Recoupment Charge funds so collected, according to the portion of the assessment that company has paid. (4) The Association shall furnish to each Assessed Company during the month of January each year a written statement on Form T-G3 with respect to any assessment paid, or recouped through a Recoupment Charge, in whole or in part, by such company within the preceding calendar year. In the event the company has made payments or received Recoupment Charge funds with respect to more than one assessment during such year, the Association shall furnish a separate Form T-G3 pertaining to each assessment.

Each Assessed Company may file the Association's statement(s) on Form T-G3 with the company's premium tax return, in support of its claiming the tax credits authorized by Section 15 of Article 9.48, Insurance Code. return to top of page

P-31. Authorized Execution of Directly Issued Policy. All directly issued policies of title insurance (authorized by Art. 9.34, Insurance Code, defined in Procedural Rule P-1.aa., and sometimes referenced "Home Office Issue") shall be countersigned, prior to delivery, by a bona fide officer or employee of the Title Insurance Company issuing the directly issued policy. Each employee or officer countersigning directly issued policies shall be employed at a designated office location in the State of Texas maintained by the issuing Title Insurance Company for the issuance of directly issued policies. Each Title Insurance Company shall file annually on or before January 31 of each calendar year a written designation of its office addresses with the Texas Department of Insurance, together with the name and position of each person or persons at each designated address it has authorized to countersign directly issued policies at such address. No person or entity may be authorized, designated or empowered to countersign directly issued policies for a Title Insurance Company until designated with the Texas Department of Insurance in compliance with this Rule P-31. For the purpose of this rule all directly issued policies must reflect original countersigned signatures and it is prohibited to affix facsimile or any other form of signature that is not the originally executed signature of a designated individual. return to top of page

Procedural Rule P-32. Document Retention  Pursuant to Tex. Ins. Code Ann. § 2704.001, evidence of insurability shall be preserved and retained in the files of the title insurance company, direct operation, or title insurance agent for a period of not less than fifteen (15) years after the policy or contract of title insurance has been issued. Electronically produced or scanned documents may be retained in place of hard copies. Hard copies, electronically produced or scanned copies shall be retained for the following periods:  

(1) escrow accounting documentation (such as signed settlement statements, disbursement sheets, invoices, and check copies) must be retained for at least three years;

(2) evidence of insurability, including a title insurance commitment, a title report, a title opinion, or a run sheet, but not including copies of documents filed in the public records, must be retained for at least fifteen (15) years; and

(3) title insurance policies must be retained indefinitely.  

These time periods for retention shall apply to electronically produced forms retained in compliance with Procedural Rule P-17.

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procedural rule p-33.  is repealed effective April 1, 2004, pursuant to Commissioner's Order No. 04-0127. return to top of page

Procedural Rule P-34. is repealed effective August 1, 1995, pursuant to Commissioner's Order No. 95-0663 return to top of page

P-35. Prohibition Against Guaranties, Affirmations, Indemnifications, and Certifications. No Title Insurance Company, Title Insurance Agent, Direct Operation, Escrow Officer, nor any employee, officer, director or agent of any such entity or person, shall issue or deliver any form of verbal or written guaranty, affirmation, indemnification, or certification of any fact, insurance coverage or conclusion of law to any insured or party to a transaction other than: (i) a statement that a transaction has closed and/or has been funded, (ii) issuance of an insured closing service letter, or any insuring form or endorsement promulgated by the State Board of Insurance, or (iii) certification of copies of documents as being true and exact copies of the original document or of the document recorded in the public records. return to top of page

P-36. Arbitration Provisions. -

A Company shall notify its proposed insured under a Mortgagee Policy or an Owner Policy (Form T-1) of the insured's right to delete the arbitration provision [§13 of the Conditions of the Mortgagee Policy and §14 of the Conditions of the Owner Policy (Form T-1) from the policy at no additional charge to the insured.

1.  A Company shall, upon specific request of the proposed insured under a Mortgagee Policy, delete Section 13 of the Conditions relating to arbitration from that policy by typing in Schedule B of the policy the following language:                "Section 13 of the Conditions of this Policy is hereby deleted."

2.  A Company shall, upon specific request of the proposed insured under an Owner Policy (Form T-1), delete Section 14 of the Conditions relating to arbitration from that policy by typing in Schedule B of the policy the following language:

                "Section 14 of the Conditions of this Policy is hereby deleted."

3.  If a Company does not issue a commitment prior to issuance of the Owner Policy (Form T-1) or Mortgagee Policy (Form T-2), it shall provide the promulgated Deletion of Arbitration form to the insured before issuance of the policy or shall delete the arbitration provision as provided above.

                Any request made under this procedural rule must be made prior to the issuance of the policy. 

                The Deletion of Arbitration Provision form shall read as follows: 

DELETION OF ARBITRATION PROVISION

(Not applicable to the Texas Residential Owner Policy) 

Arbitration is a common form of alternative dispute resolution. It can be a quicker and cheaper means to settle a dispute with your Title Insurance Company. However, if you agree to arbitrate, you give up your right to take the Title Company to court and your rights to discovery of evidence may be limited in the arbitration process. In addition, you cannot usually appeal an arbitrator's award. 

Your policy contains an arbitration provision (shown below). It allows you or the Company to require arbitration if the amount of insurance is $2,000,000 or less. If you want to retain your right to sue the Company in case of a dispute over a claim, you must request deletion of the arbitration provision before the policy is issued. You can do this by signing this form and returning it to the Company at or before the closing of your real estate transaction or by writing to the Company. 

The arbitration provision in the Policy is as follows: 

“Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Title Association (“Rules”).  Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons.  Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy.  All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, unless the Insured is an individual person (as distinguished from an Entity).  All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Insured.  Arbitration pursuant to this policy and under the Rules shall be binding upon the parties.  Judgment upon the award rendered by the Arbitrator(s) may be entered in any court of competent jurisdiction.”

I request deletion of the Arbitration provision.
______________________________ ______________________________
SIGNATURE DATE

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P-37. Lack of a Right of Access - If the company is not satisfied as to the insurability of access to and from the land, the title to which or a lien thereon is to be insured, it may make the following exceptions to the insuring form: 

        a.     To the Owner Policy (Form T-1): "Lack of a right of access to and from the Land. Covered Risk number 4 is hereby deleted.” 

        b.     To the Mortgagee Policy: "Lack of a right of access to and from the Land. Covered Risk number 4 is hereby deleted.” 

        c.     To the Residential Owner Policy (Form T-1R): “Lack of a right of access to and from the Land. Company deletes the insurance of access under Covered Title Risks.”

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P-38. Residential Owner Policy of Title Insurance - One-To-Four Family Residences A Company shall only issue a Residential Owner Policy of Title Insurance - One-To-Four Family Residences (Form T-1R) on property that is Residential Real Property, and the insured is a natural person(s) at the date the policy is issued. In the application of this rule it is permissible to issue a Residential Owner Policy of Title Insurance (Form T-1R) prior to the construction of improvements provided that the Residential Owner Policy of Title Insurance (Form T-1R) is issued to a natural person, in accordance with P-8.a. In all other cases, the Company shall issue the Owner Policy (Form T-1) when issuing a policy to an owner. return to top of page

P-39. Express Insurance (a) Encroachments. If Company amends its Area and Boundary Exception, pursuant to Procedural Rule P-2, it may except, pursuant to Procedural Rule P-5, to those matters shown on the survey that it deems to cause a possible defect in title. The Company may, if it deems the risk insurable as to encroachments, add the following language after the exception:

"Company insures the insured against loss, if any, sustained by the insured under the terms of this Policy by reason of a final, non-appealable judgment of a court of competent jurisdiction that orders the removal of this improvement because it encroaches over or into _________________________________. Company agrees to provide defense to the insured in accordance with the terms of this Policy if suit is brought against the insured to require the removal of this improvement because it encroaches as herein stated."

(b) Possible Defects. If Company determines that a title matter may cause a possible defect in title, it may except, pursuant to Procedural Rule P-5, to the matter in Schedule B, and, if it determines that the risk is insurable, it may add the following language after the exception:

"Company insures the Insured against loss, if any, sustained by the insured under the terms of this Policy by reason of a final, non-appealable judgment of a court of competent jurisdiction that divests the Insured of its interest as Insured because of this right, claim, or interest. Company agrees to provide defense to the Insured in accordance with the terms of this Policy if suit is brought against the Insured to divest the Insured of its interests as Insured because of this right, claim, or interest." or "Company insures the Insured against loss, if any, sustained by the insured under the terms of this Policy by reason of the enforcement of said rights as to the land. Company agrees to provide defense to the Insured in accordance with the terms of this Policy if suit is brought against the Insured to enforce said rights as to the land."

(c) Liens.

(1) If Company intends to provide insurance against an enforceable lien, it shall comply with P-11. If Company then determines to issue without exception to a lien pursuant to P-11b(1), (4), (5), (6), (7), it may show the lien in Schedule B of the Policy and then may state: "Exception No. ____________ is hereby deleted. Company provides insurance as to said lien in accordance with the terms of this Policy."

(2) If Company then determines to issue with exception to the lien after otherwise complying P-11, it may, pursuant to Procedural Rule P-5, show the lien in Schedule B and may state one of the following:

(a) If the lien may only be foreclosed judicially: "Company insures the Insured against loss, if any, sustained by the insured under the terms of this Policy by reason of a final, non-appealable judgment of a court of competent jurisdiction that orders foreclosure of said lien on the land. Company agrees to provide defense to the Insured in accordance with the terms of this Policy if suit is brought against the insured to foreclose said lien on the land." or (b) If the lien may be foreclosed nonjudicially: "Company insures the Insured against loss, if any, sustained by the insured under the terms of this Policy by reason of a foreclosure of said lien on the land. Company agrees to provide defense to the Insured in accordance with the terms of this Policy if suit is brought against the insured to foreclose said lien on the land and to take action in accordance with the terms of the policy if the holder of the lien commences a foreclosure action based on said lien."

The provisions of this Rule shall not modify or diminish the requirements of P-11. return to top of page

P-40. Standards for Reserve Setting and Reviewing Upon acceptance or conditional acceptance of a claim under a title insurance policy, the title insurer must:

(a) set an initial reserve within thirty (30) days.
(b) base the reserve required in (a) on an accurate estimate, in the best judgment of the Company's personnel, of the costs expected to be paid to the insured or other parties in the settlement and processing of the claim. A nominal initial reserve may be used only when opening a file without adequate information to make an appropriate assessment of the risk.
(c) when a nominal initial reserve has been set in accordance with (b) above, change the reserve to reflect the risk as soon as sufficient information has been received.
(d) review each reserve on a regular basis (at least quarterly) and adjust the reserve as warranted by new information or changed circumstances. It is equally important that a claim not be over-reserved or under-reserved.
(e) maintain written records of the initial reserve and any change to the reserve, including the reasons for any change in the reserve, in the file for review by the Commissioner for a period of four (4) years.

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P-43. Limited Pre-Foreclosure Policy (T-40) and Limited Pre-Foreclosure Policy Downdate Endorsement (T-41)

A)   Limited Pre-Foreclosure Policy (Form T-98)

1)   The premium prescribed in Rate Rule R-26 must be collected prior to issuance of the Limited Pre-Foreclosure Policy.

2)   The indebtedness secured by the Foreclosing Mortgage must be in default at the time of application for, and issuance of, the Limited Pre-Foreclosure Policy. The term “Foreclosing Mortgage” means the deed of trust, or other lien, specifically described under the section entitled Foreclosing Mortgage in the Limited Pre-Foreclosure Policy Combined Schedule (Form T-98).

3)   The Limited Pre-Foreclosure Policy may not be issued if the Foreclosing Mortgage is not insured under a Mortgagee Policy of Title Insurance on the date that the Limited Pre-Foreclosure Policy is issued. If a Mortgagee Policy of Title Insurance is issued for the purposes of qualifying the Foreclosing Mortgage for a Limited Pre-Foreclosure Policy, the Date of Policy of the Mortgagee Policy of Title Insurance shall be the date of recording of the Foreclosing Mortgage. 

4)   A Commitment for Title Insurance may not be issued prior to, or in connection with, the issuance of Pre-Foreclosure Policy or Limited Pre-Foreclosure Policy Downdate Endorsement.

5)   The Name of Insured in the Limited Pre-Foreclosure Policy may include one or more of the following: (i) a named mortgagee or mortgagees; (ii) an assignee or assignees of the named mortgagee or assignee; (iii) a loan servicer(s); (iv) a trustee(s); and/or (v) an attorney(ies).

6)   The Amount of Insurance for the Limited Pre-Foreclosure Policy must be the least of: (i) the unpaid balance of the indebtedness secured by the Foreclosing Mortgage; or, (ii) the value of the land encumbered by the Foreclosing Mortgage. If the proposed insured does not provide the Company with written evidence of the value of the land, the Amount of Insurance shall be the unpaid balance of the indebtedness secured by the Foreclosing Mortgage.

7)   Express insurance pursuant to Procedural Rule P-39 shall not be available for the Limited Pre-Foreclosure Policy.

8)   The arbitration clause may not be deleted unless all the requirements of this section are satisfied. The Company shall delete the arbitration provisions of the Limited Pre-Foreclosure Policy {i.e. Section 9 of the Conditions and Stipulations} if the proposed Insured requests, in writing, the deletion of the arbitration provisions on or before two months after the Date of Policy of the Limited Pre-Foreclosure Policy. The arbitration clause may be deleted by following these instructions:

a)   The language to be used to delete the arbitration clause {hereinafter the “Deletion Language”} under P-43.A.(8) is as follows: “Item 9 of the Conditions and Stipulations is hereby deleted.”

b)   The arbitration clause may be deleted by: (i) Inserting the Deletion Language in the Exceptions From Coverage of the Limited Pre-Foreclosure Policy Combined Schedule; or, (ii) including the Deletion Language in a T-3 endorsement; or,

iii) inserting the Deletion Language in a Limited Pre-Foreclosure Policy Downdate Endorsement issued in accordance with Procedural Rule P-43.B.

9)   As required by Article 9.38(c) of the Texas Insurance Code, a Schedule “D”, which complies with Procedural Rule P-21, shall be attached to the Limited Pre-Foreclosure Policy. Provided, however, in the case of Schedule “D” to the Limited Pre-Foreclosure Policy, Procedural Rule P-21.3, is amended to read as follows:

“As to each Limited Pre-Foreclosure Policy, the following additional language shall be included in each Schedule D, together with all required information included within the blanks contained below:

Of the total premium shown on the Limited Pre-Foreclosure Policy Combined Schedule, $                       (or %) will be paid to the policy issuing Title Insurance Company; $                     (or %) will be retained by the issuing Title Insurance Agent; and the remainder of the estimated premium will be paid to other parties as follows:

      Amount                                                 To Whom                                   For Services

      $                      (or %)                                                                                                             

      $                      (or %)                                                                                                             

      $                      (or %)                                                                                                             

Each Title Insurance Company and each Title Insurance Agent shall, prior to usage, file its proposed Limited Pre-Foreclosure Policy Schedule D form with the Texas Department of Insurance; in like manner each Title Insurance Company and Title Insurance Agent shall file all Amended Limited Pre-Foreclosure Policy Schedule D forms with the Texas Department of Insurance prior to usage.

Each Title Insurance Company and Title Insurance Agent may, in preparing its Limited Pre-Foreclosure Policy Schedule D, use whatever reasonable format it elects, provided that such format does not alter or delete the furnishing of the disclosures hereby required. It is the express intent of this paragraph to enable usage of electronic equipment in preparation of the required Schedule D.”

10) No proforma or specimen Limited Pre-Foreclosure Policy Combined Schedule may be issued.

11) A T-3 Correction Endorsement may be issued to delete errors or erroneous exceptions contained in the Limited Pre-Foreclosure Policy Combined Schedule. The requirements of Section 2, Paragraph IV, of the Basic Manual, entitled “Correction of Policy or Binder” shall apply to a Correction Endorsement for a Limited Pre-Foreclosure Policy Combined Schedule.

B)   Limited Pre-Foreclosure Policy Downdate Endorsement (Form T-99)

All the following requirements apply to issuance of a Limited Pre-Foreclosure Policy Downdate Endorsement:

1)   The Limited Pre-Foreclosure Policy may be endorsed no more than four times pursuant to issuance of a Limited Pre-Foreclosure Policy Downdate Endorsement.

2)   A Pre-Foreclosure Policy Downdate Endorsement may not be issued later than 24 months subsequent to the first {initial} issued Limited Pre-Foreclosure Policy “Date of Policy”.

3)   Express insurance under Procedural Rule P-39 shall not be available for the Limited Pre-Foreclosure Policy Downdate.

4)   A commitment for title insurance may not be issued prior to, or in connection with, the issuance of a Limited Pre-Foreclosure Policy Downdate Endorsement.

5)   The indebtedness secured by the foreclosing mortgage must be in default at the time of application for, and issuance of, the Limited Pre-Foreclosure Policy Downdate Endorsement. 
 

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P-44. Equity Loan Mortgage Endorsement (T-42) A. When a Mortgagee Policy of Title Insurance (T-2) is to be issued insuring the lien securing an extension of credit made pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution, the Company shall attach to the Mortgagee Policy of Title Insurance (T-2) the Equity Loan Mortgage Endorsement (T-42). B. The Company may delete any provision of paragraph 2 of the Equity Loan Mortgagee Endorsement (T-42) if it does not consider the additional risk insurable. C. The Company may add subparagraph (f) to paragraph 2 of the Equity Loan Mortgage Endorsement (T-42) if it considers the risk insurable, provided that the following requirements are met:

(1) The promissory note secured by the insured mortgage and the insured mortgage must be executed by the borrower(s)/grantor(s) at the office of a title company and the insured mortgage must be acknowledged by the borrower(s)/grantor(s) at the office of a title company. For purposes of this subparagraph C(l), "the office of a title company" shall mean the leased or owned Texas office location(s) of: (a) a title insurance company; or, (b) a direct operation; or, (c) a title insurance agent; or, (d) an attorney conducting the attorney's business in the name of a title insurance company or direct operation or title insurance agent where the attorney and the attorney's bona fide employees who close transactions are licensed as escrow officers as provided in Article 9.42.C, Texas Insurance Code.

(2) Subparagraph (f) of paragraph 2 of the Equity Loan Mortgage Endorsement (T-42) must read as follows

"(f) The extension of credit secured by the lien of the insured mortgage being closed at a location other than the office of the lender, an attorney at law, or a title company, as set forth in Subsection (a)(6)(N) of Section 50, Article XVI, Texas Constitution."

D. The Company may not provide Express Insurance (pursuant to P-39) as to matters set forth in the Equity Loan Mortgage Endorsement (T-42). return to top of page

P-45. Texas Reverse Mortgage Endorsement (T-43)

A. When a Mortgagee Policy of Title Insurance (T-2) is to be issued insuring the lien securing a reverse mortgage loan made pursuant to Subsection (a)(7) of Section 50, Article XVI, Texas Constitution, the Company shall attach to the Mortgagee Policy of Title Insurance (T-2) the Texas Reverse Mortgage Endorsement (T-43).

B. The company may not provide Express Insurance (pursuant to P-39) as to matters set forth in the Texas Reverse Mortgage Endorsement (T-43).

C. The Loan Policy of Title Insurance (T-2) insuring the lien securing a reverse mortgage loan may be issued in an amount not exceeding:

1. 150% of the total advances to be made according to a plan established by the original loan agreement; or

2. The maximum amount that may be secured by the lien of the insured mortgage, as estimated by the lender according to the written lender instructions; or,

3. In the case of an FHA-insured loan, the Maximum Claim Amount as established by FHA.

D.  The Company may delete any subdivision in Paragraph 3 of the Texas Reverse Mortgage Endorsement (T-43) if it does not consider the additional risk insurable.  The following language shall  be placed below Paragraph 3: “Subdivision ______ of Paragraph 3 of this Texas Reverse Mortgage Endorsement (T-43) is hereby deleted.  The Company does not insure against failure to comply with the Subsection of the Constitution referred to in said subdivision of Paragraph 3.”

The Company shall complete the blank with the appropriate subdivision of Paragraph 3 of the Texas Reverse Mortgage Endorsement (T-43) if the above format is used.

E.  The Company must delete subdivisions (ii) through (iv) of Paragraph 3 of the Texas Reverse Mortgage Endorsement (T-43) if the insured mortgage and the promissory note are not executed at the office of a title company. For purposes of this Rule P-45, “the office of a title company” shall mean the leased or owned Texas office location(s) of:  (1) a title insurance company; or, (2) a direct operation; or, (3) a title insurance agent; or, (4) an attorney conducting the attorney’s business in the name of a title insurance company or direct operation or title insurance agent where the attorney and the attorney’s bona fide employees who close transactions are licensed as escrow officers as provided in Article 9.42.C, Texas Insurance Code.  In order to evidence the deletion required by this Paragraph E, the following language shall be stated on the Texas Reverse Mortgage Endorsement (T-43):“Subdivisions (ii) through (iv) of Paragraph 3 of this Texas Reverse Mortgage Endorsement (T-43) are hereby deleted.  The Company does not insure against the failure to comply with the Subsections of the Constitution referred to in said subdivisions of Paragraph 3.”

F.  The Company must delete subdivision (ii) of Paragraph 3 of this Texas Reverse Mortgage Endorsement (T-43) as provided in Paragraph D, above, if the Company is not furnished with government issued photographic identification showing that the owner of the land or the spouse of the owner of the land is 62 years or older.G.  The Company must delete subdivision (iii) of Paragraph 3 of this Texas Reverse Mortgage Endorsement (T-43) as provided in Paragraph D, above, if the document furnished by the insured and purporting to attest or acknowledge that the owner received counseling regarding the advisability and availability of reverse mortgages and other financial alternatives is not executed by the owner of the land at an office of a title company on the date that the insured mortgage and the promissory note secured thereby are executed.H.  The Company must delete subdivision (iv) of Paragraph 3 of this Texas Reverse Mortgage Endorsement (T-43) as provided in Paragraph D, above, if the document furnished by the insured and purporting to disclose to the owner of the land the provisions  contained in Subsection (k)(6) of Section 50, Article XVI, Texas Constitution under which the payment of principal and interest secured by the insured mortgage may be required is not given to the owner of the land and receipt is not acknowledged in writing by the owner  of the land at an office of a title company on the date that the insured mortgage and the promissory note secured thereby are executed.

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P-46. Texas Residential Limited Coverage Junior Mortgagee Policy(T-44) and Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) and Texas Residential Limited Coverage Junior Mortgagee Policy home equity line of credit/Variable Rate Endorsement (T-46) and Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement

A. Texas Residential Limited Coverage Junior Mortgagee Policy (T-44)

(1) A Company may issue the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) if:

(a) the land is encumbered by one or more mortgages recorded in the public records, and

(b) the land is residential property (as defined in this rule P-46.A.(4)), and

(c) the proposed insured is an entity which is an institutional lender (such as a bank, savings and loan association, savings bank, or credit union), and

(d) the proposed insured intends to secure a junior mortgage (the insured’s mortgage) on the land that secures an extension of credit pursuant to Subsection (a)(6), of Section 50, Article XVI, Texas Constitution, and

(e) the extension of credit to be secured by the insured’s mortgage will not exceed $100,000.

(2) The Amount of Insurance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) shall be the estimated amount of the extension of credit to be secured by the insured’s mortgage.

(3) The Company shall not delete the arbitration provisions of the Texas Residential Limited Coverage Junior Mortgagee Policy.

(4) For purposes of this Rule P-46, “residential property” is real property which has improvements designed principally for the occupancy of from one to four families (including individual units of condominiums and cooperatives) that (1) is located in a platted subdivision of record, or (2) consists of five acres or less.

B. Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement

(1) A Company may issue a Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement to the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) by inserting the following provisions in Endorsement Form T-3 on issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44), if the Company considers the risk insurable:

(a) The following Insuring Provision is substituted for Insuring Provision number 4 of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44):

“4. Any other Monetary Lien affecting the title, recorded in the public records.”

(b) The following is added to the Texas Residential Limited Coverage Junior Mortgagee Policy Combined Schedule:

“Tax Designation of Land:

[ ] is designated for agricultural use as provided by statutes governing property tax.

[ ] is not designated for agricultural use as provided by statutes governing property tax.”

(c) The following Insuring Provisions are added to the Texas Residential Limited Coverage Junior Mortgagee Policy:

“5. At Date of Policy, the Tax Designation of Land shown on the Combined Schedule to this policy being incorrect.”

“6. Any lien for standby fees, taxes or assessments of any taxing authority that are due and payable at Date of Policy.”

(d) The following exception is substituted for Exception A of the exceptions of the Texas Residential Limited Coverage Junior Mortgagee Policy Combined Schedule:

“A. Standby fees, taxes or assessments by any taxing authority for the year 20___ and subsequent years, and subsequent taxes and assessments by any taxing authority for prior years.”

(2) A Company may incorporate or add the provisions of the Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement to the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) if such coverage is requested prior to the issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

C. Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45)

(1) A Company may issue one or more Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsements (T-45) within one year after issuance by that Company of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44). A Company may not issue a Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) more than one year after issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

(2) A company may delete Paragraph B from the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) if that paragraph is not applicable at the time of the issuance of the Endorsement.

(3) If the amount of the extension of credit secured by the insured’s mortgage exceeds the amount of insurance previously stated in the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44), the amount of insurance shall be increased by noting that change as a Paragraph D in the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45), subject to payment of the applicable premium as provided in Rule R-27. The Paragraph D shall read as follows: “D. The amount of insurance of the Policy is hereby amended to be $_______.”

D. Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46)

(1) A Company may issue one Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) within one year after issuance by that Company of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44). A Company may not issue a Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) more than one year after issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44).

(2) The Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsements (T-46) shall not be issued unless the insured’s mortgage described on the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) secures a variable rate or home equity line of credit loan. For purposes of this rule, a variable rate loan is a loan made pursuant to Subsection (a)(6), of Section 50, Article XVI, Texas Constitution which permits adjustments of the interest rate, with such adjustments being implemented through changes in the payment amount and/or as otherwise allowed by applicable law. For purposes of this rule, a home equity line of credit is an open-end account made pursuant to Subsections (a)(6) and (t), of Section 50, Article XVI, Texas Constitution.

E. Procedures Applicable to Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) and Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) and Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) and Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement

(1) A Company may not issue a Commitment for Title Insurance prior to or in connection with the issuance of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement.

(2) No proforma or specimen Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement may be issued.

(3) A T-3 Correction Endorsement may be issued to delete errors or erroneous exceptions contained in Paragraph 2 of the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Paragraph A of the Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45). The requirements of Section 2, Paragraph IV, of the Basic Manual, entitled “Correction of Policy or Binder” shall apply to a Correction Endorsement for a Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) Combined Schedule or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement.

(4) The Company may not provide Express Insurance (pursuant to P-39), or coverage or endorsements applicable to a Mortgagee Title Policy of Title Insurance (T-2) or Interim binder (T-13).

(5) The agent portion of the premium for the Texas Residential Limited Coverage Junior Mortgagee Policy (T-44) or Texas Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) or Texas Residential Limited Coverage Junior Mortgagee Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46) or Texas Residential Limited Coverage Junior Mortgagee Policy Additional Coverage Endorsement shall be retained by and paid to only the title insurance agent in the county where the land described in the policy or Endorsements is located if such title insurance agent performs either the: (i) title search; (ii) title examination; or (iii) issuance of the policy or Endorsements.

P-47. Supplemental Coverage Equity Loan Mortgage Endorsement  
( T-42.1)
A. General Requirements

When a Mortgagee Policy of Title Insurance (T-2) is to be issued insuring the lien securing an extension of credit made pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution, the Company may attach the Mortgagee Policy of Title Insurance (T-2) and the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the Company considers the risk insurable and the Company complies with this Procedural Rule P-47. The general requirements and limitations for issuance of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) are as follows:

(1) The Company shall not attach the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) to the Mortgagee Policy of Title Insurance (T-2) unless:

(a) The Equity Loan Mortgage Endorsement (T-42) is attached to said Mortgagee Policy of Title Insurance; and

(b) The Company has complied with the provisions of Procedural Rule P-44 concerning the attachment of the Equity Loan Mortgage Endorsement (T-42) to the Mortgagee Policy of Title Insurance (T-2).

(2) The Company may delete any provision of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if it does not consider the additional risk insurable. The following language may be placed along side each lettered subparagraph reference contained in paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) which the Company determines to delete:

“Item _______ of paragraph 1 of this Supplemental Coverage Equity Loan Mortgage Endorsement

(T-42.1) is hereby deleted.”

The Company shall complete the blank with the appropriate subparagraph letter of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the above format is utilized.

(3) The Company shall not provide Express Insurance (pursuant to P-39) as to matters set forth in the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1), whether or not the Company issues T-42.1.

(4) The Company must delete subparagraphs (a) through (h) and subparagraph (1) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if:

a. the insured mortgage and the promissory note secured thereby are not executed at the office of a title company in accordance with Procedural Rule P-44(c)(1); or,

b. the Company deletes subparagraph 2(f) of the Equity Loan Mortgage Endorsement (T-42).

In order to evidence the deletion required by this subsection of P-47.A.(4), the following language may be stated on the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) in place of subparagraphs (a) through (h) and subparagraph (1) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1). The following language may be used:

“Subparagraphs (a) through (h) and subparagraph (1) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) are hereby deleted in their entirety.”

B. Specific Endorsement Paragraph Requirements

The requirements and limitations applicable for each numbered insuring provision of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) are set forth in items 1 through 11 below:

(1) Signature Before Specified Date

The Company must delete subparagraph (a) of paragraph 1 of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if:

(a) written instructions are not furnished by the insured to the Company or its Title Insurance Agent prior to the execution of the insured mortgage and the promissory note secured thereby;

(b) the written instructions do not state a specific calendar date that constitutes the earliest date for execution of the insured mortgage and the promissory note secured thereby.

(2) Loan Proceeds Disbursement Before Fourth Day

The Company must delete subparagraph (b) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if:

(a) the Company or its Title Insurance Agent does not disburse all loan proceeds received by the Company or its Title Insurance Agent; or

(b) any of the loan proceeds received by the Company or its Title Insurance Agent are disbursed sooner than four calendar days after the insured mortgage and promissory note are executed.

(3) Execution of Election Not to Rescind

The Company must delete subparagraph (c) of paragraph 1 of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if a document purporting to evidence an election not to rescind the extension of credit secured by the lien of the insured mortgage is executed in the presence of an escrow officer at an office of the Company or its Title Insurance Agent on or before the date that the insured mortgage and the promissory note secured thereby are executed.

(4) Document Copies

The Company must delete subparagraph (d) of paragraph 1 of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the Company or its Title Insurance Agent do not provide each owner of the land with a copy of all documents related to the extension of credit secured by the lien of the insured mortgage that were executed by the owner at an office of the Company or its Title Insurance Agency on the date that the owner executed the insured mortgage and the promissory note secured thereby.

(5) Fees

The Company must delete subparagraph (e) of paragraph 1 of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if:

(a) any fees are collected or disbursed by the Company or its Title Insurance Agent and said fees are not shown on the final settlement statement which was prepared by the Company or its Title Insurance Agent and executed by the owner and the spouse, if any, of the owner; or

(b) no preliminary (unexecuted) settlement statement is requested from the Company or its Title Insurance Agent, by the lender named on the final settlement statement, prior to execution of the insured mortgage and promissory note by the owner or the spouse, if any, of the owner; or

(c) a preliminary (unexecuted) settlement statement was requested by and sent to the lender, and the fees on the final settlement statement executed by the owner, or the spouse, if any, of the owner exceed the amount of fees on the final (unexecuted) settlement statement sent to the lender prior to execution of the insured mortgage and promissory note secured thereby.

(6) Blanks in an Instrument

The Company must delete subparagraph (f) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42. 1) if either (a) or (b) below occurs:

(a) There are any blanks in an instrument left to be filled in when executed by the owner of the land in an office of the Company or its Title Insurance agent, and:

(i) the instrument was prepared by the Company or its Title Insurance Agent, or

(ii) the instrument is: (a) the purported written acknowledgment as to the fair market value; (b) the insured mortgage; (c) the promissory note secured thereby; or, (d) affidavits of compliance with Section 50(a)(6), Article XVI, Texas Constitution.

(b) There are any blanks in an instrument left to be filled in when executed by the owner of the land in any of the following instruments when same are delivered to the Company or its Title Insurance Agent: (i) the purported written acknowledgment as to the fair market value; (ii) the insured mortgage; (iii) the promissory note secured thereby; or, (iv) affidavits of compliance with Section 50(a)(6), Article XVI, Texas Constitution.

(7) Attachment of Appraisal or Evaluation

The Company must delete subparagraph (g) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the insured does not furnish to the Company or its Title Insurance Agent prior to execution of the insured mortgage and the promissory note secured thereby:

(a) a document purporting to be written acknowledgment as to the fair market value of the land; and

(b) a purported appraisal or evaluation which is attached to the purported written acknowledgment.

(8) Signature of Acknowledgment of Fair Market Value

The Company must delete subparagraph (h) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if:

(a) the purported written acknowledgment as to the fair market value is not provided by the insured to the Company or its Title Insurance Agent prior to the execution of the insured mortgage or the promissory note secured thereby; or

(b) the purported written acknowledgment is not executed by the owner at an office of the Company or its Title Insurance Agent on the date that the insured mortgage and the promissory note secured thereby are executed.

(9) No Land In Excess of Homestead Allotment

The Company must delete subparagraph (i) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if: (a) or (b) below is true:

(a) The Company does not receive a satisfactory affidavit from each owner of the land, and that owner’s spouse, stating that:

(i) all of the land is the homestead of the owner and that owner’s spouse; and,

(ii) no portion of the land is non-homestead property of the owner or owner’s spouse; and

(iii) the owner of the land, and that owner’s spouse do not claim other land as homestead, unless that other land is described in the affidavit.

(b) The Company does not receive one of the following:

(i) a satisfactory surveyor’s certificate or letter from a Texas Licensed Registered Professional Surveyor, stating the exact amount of acreage or square footage of the land and such other facts as may be required by the Company, including whether or not the land is located within the boundaries of an incorporated municipality; or,

(ii) a computation of the acreage or square footage of the land made pursuant to a software program designed for calculation of the acreage or square footage of the land and computer generated drawings of the boundaries of the land pursuant to entry of the boundary description calls.

(10) No Other Land With a Home Equity Mortgage

The Company must delete subparagraph (j) of paragraph 1 of Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the Company does not receive a satisfactory affidavit from each owner of the land and that owner’s spouse , if any, stating:

(a) the owner and the owner’s spouse, if any, do not have or claim any other land as homestead for tax or other purposes except: (i) the land described in Schedule A of the Commitment for Title Insurance; and (ii) other land described in the affidavit; and,

(b) any business operated by the owner or the spouse of the owner, if any, and situated upon land owned or leased by the owner or owner’s spouse is not subject to an extension of credit pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution; and,

(c) the residence, owned or leased by the owner or owner’s spouse, if any, at which the owner and the owner’s spouse live is not subject to an extension of credit pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution.

The Company may add the phrase “or in an adjoining county” after the phrase “described in Schedule A is located” in subparagraph (j) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if (i) the land is located within the boundaries of an incorporated municipality; (ii) the municipality is located in more than one county; and, (iii) the Company considers the risk insurable.

(11) No Other Land With Released Home Equity Mortgage Within Past Twelve Months

The Company must delete subparagraph (k) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the Company does not receive a satisfactory affidavit from each owner of the land and that owner’s spouse, if any, stating:

(a) the owner and the owner’s spouse, if any, do not have or claim any other land as homestead for tax or other purposes except: (i) the land described in Schedule A of the Commitment for Title Insurance; and (ii) other land described in the affidavit; and,

(b) any business operated by the owner or the spouse of the owner, if any, and situated upon land owned or leased by the owner or owner’s spouse has not been subject to an extension of credit pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution, closed within one year prior to Date of Policy; and,

(c) the residence, owned or leased by the owner or owner’s spouse, if any, at which the owner and the owner’s spouse live has not been subject to an extension of credit pursuant to Subsection (a)(6) of Section 50, Article XVI, Texas Constitution, closed within one year prior to Date of Policy.

The Company may add the phrase “or in an adjoining county” after the phrase “described in Schedule A is located” in subparagraph (k) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if (i) the land is located within the boundaries of an incorporated municipality; (ii) the municipality is located in more than one county; and, (iii) the Company considers the risk insurable.

12. Final Disclosure of Fees

The Company must delete subparagraph (1) of paragraph 1 of the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) if the Company or its Title Insurance Agent does not provide each owner with a copy of the final settlement statement at least one calendar day before the business day or subsequent calendar day that the owner executes the insured mortgage and the promissory note secured thereby. As used in this item 12, the term business day shall have the meaning assigned to such term by the Texas Finance Commission and/or the Texas Credit Union Commission pursuant to the authority granted such agencies by sections 11.308 and 15.413 of the Texas Finance Code, respectively.

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P-48. Dates On and After January 1, 2000. Any date in any promulgated form adopted as "19__" shall on and after January 1, 2000, be changed to reflect the correct calendar year.  return to top of page

P-49. Annual Audit. A. As provided in Article 9.39, Texas Insurance Code, every title insurance and direct operation shall have an annual audit prepared, and before the 91st day after the date of termination of its fiscal year, shall send by certified mail, postage prepaid, to the Texas Department of Insurance one copy of such audit report with a letter of transmittal, and each such agent, shall also send a copy of such letter of transmittal and audit report to every title insurance company which it represents.B. If a title insurance company fails to receive an audit report from any of its agents or direct operations before the 91st day after the date of the termination of the fiscal year of the agent or direct operation, the title insurance company shall report that omission to the department not later than the 30th day after the expiration of the 90-day period.

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P-50. Restrictions, encroachments, minerals endorsement. A. A Company may issue its Restrictions, Encroachments, Minerals Endorsement (T-19) to a Mortgagee Policy (T-2) on residential real property, if its underwriting requirements are met and if it is paid the premium prescribed in Sub-Section A. of Rate Rule R-29. The Company shall delete any insuring provision if it does not consider that risk acceptable. Any insured matter covered in the Restrictions, Encroachments, Minerals Endorsement (T-19) may be insured only by the use of this Restrictions, Encroachments, Minerals Endorsement (T-19).

B. A Company may issue its Restrictions, Encroachments, Minerals Endorsement (T-19) to a Mortgagee Policy (T-2) on land which is not residential real property, if its underwriting requirements are met and if it is paid the premium prescribed in Sub-Section B. of Rate Rule R-29. The Company shall delete any insuring provision if it does not consider that risk acceptable. Any insured matter covered in the Restrictions, Encroachments, Minerals Endorsement (T-19) may be insured only by the use of this Restrictions, Encroachments, Minerals Endorsement (T-19).

C.  A Company may issue its Restrictions, Encroachments, Minerals Endorsement – Owner Policy (T-19.1) on or after the date that Rate Rule R-29 is amended effective to an Owner Policy (T-1) on land which is not residential real property, if its underwriting requirements are met and if it is paid the premium, if any, prescribed in Sub-Section C. of Rate Rule R-29.  The Company shall delete any insuring provision if it does not consider that risk acceptable.  Any insured matter covered in the Restrictions, Encroachments, Minerals Endorsement – Owner Policy (T-19.1) may be insured only by the use of this Restrictions, Encroachments, Minerals Endorsement – Owner Policy (T-19.1).

P-51. Texas short form residential mortgage policy of title insurance (t-2r). A Company may issue a Texas Short Form Residential Mortgagee Policy of Title Insurance (T-2R) on property that is Residential Real Property if that policy is requested by the proposed insured and the Company's requirements are met. The Company shall not issue a Texas Short Form Residential Mortgagee Policy of Title Insurance (T-2R) unless it receives a survey of the kind described in Sub-Section a. of Procedural Rule P-2, or, if the transaction qualifies under other Sub-Sections of Procedural Rule P-2, a survey and a qualifying affidavit described in the other applicable Sub-Section(s) of Procedural Rule P-2.

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P-52. delivery of Pro forma policies and promulgated forms
1. For purposes of this rule, a "pro forma policy" is an Owner or Mortgagee Policy prepared prior to payment for, issuance and delivery of the policy, with completed Schedules A and B, showing the proposed insured, the amount of insurance, the exceptions that are proposed to be placed in the final policy to be issued, and the name of the title insurance company and title insurance agent.

2. A Company may not prepare and deliver to a proposed insured for review a pro forma policy unless (a) the land is not residential real property and the proposed amount of insurance is $500,000 or more, and (b) each page of the completed Schedules A and B conspicuously states "This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company."

3. A Company may provide a proposed insured with a copy of any promulgated title insurance form, or a foreign language translation of such form. Any translation must conform to the following conditions: (a) the translation must not be misleading, (b) an English copy of the promulgated form also must be furnished, and (c) the translation must include the following conspicuous provision at the top of the first page in both English and the language into which the form has been translated: "This translation of (name of promulgated form) is furnished to you in order to assist you in understanding its terms. This translation is not an official form promulgated by the Texas Department of Insurance. It is not a report or opinion of title, an agreement to insure, or a representation of the insurance you may receive. If this translation conflicts with the form promulgated by the Texas Department of Insurance, the promulgated form will control in all respects."

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P-53. Rebates and discounts prohibited

1.  For the purposes of this rule the following terms have the following meanings.

(a)  “Authorized Person” means a person doing the business of title insurance under the authority of the Texas Title Insurance Act of the Insurance Code.

(b)  “Producer” means a real estate broker, real estate agent, lender, mortgage company, mortgage broker, builder, developer, attorney, or architect who is not an Affiliate of an Authorized Person.  A Trade Association is not a Producer; however, Paragraphs 2 and 3 of this rule apply to a Trade Association.

(c) “Affiliate” means:

(i)   an officer, director, agent or employee of an Authorized Person or a Producer;

(ii)  a member of the immediate family of an officer, director, agent, or employee of an Authorized Person or a Producer;

(iii) a person who owns a Producer or Authorized Person;

(iv) a person who is owned by a Producer or Authorized Person; or

(v)  a person who is under common ownership with a Producer or Authorized Person.

(d)  “Business Expense” means a cost to operate or promote a business, including but not limited to costs of furnishings, postage, office supplies, advertising, electronic media, computer hardware, computer software, telephones, telephone charges, printing, copiers, fax machines, office equipment, vehicles, staff, employee compensation, and rent.  An expense that a Producer is, in accordance with generally acceptable accounting principles, permitted to deduct for tax purposes is presumed to be a Business Expense.  Without limiting this definition, the following constitute the payment of Business Expenses of a Producer by an Authorized Person, subject to the provisions of paragraph 3 herein:

      (1)  jointly, with a Producer, advertising real property not owned by the Authorized Person for sale or lease;

      (2)  contributing to a Producer or paying any part of the Producer’s costs of any of the following:

            (A)      for sale or for lease signs;

            (B)      advertisements, in any media or form, that promote any one property not owned by the Authorized Person for sale or lease;

            (C)     boxes or similar items in which to store advertising media;

            (D)     hosting an open house;

            (E)      prizes, food, beverages, gifts, decorations, entertainment or professional services given at open houses; or

            (F)      parties or receptions which promote a Producer or the Producer’s properties or activities of the Producer.

(e)  “Trade Association” means a membership organization of persons engaging in similar or related lines of commerce, organized to promote and improve business conditions, and not engaged in a business for profit.

(f)   “Market rate” means the price at which a seller, under no obligation or duress to sell, is willing to accept and a buyer, under no obligation or duress to buy, is willing to pay in an Arms-length transaction.  The market rate is determined by comparing the rights or items purchased or sold to similar rights or items that have been recently purchased by others or sold to others, including others not in the title insurance business.

(g)  “Arms-length transaction” means a business transaction between two unrelated and unaffiliated parties or a business transaction conducted between affiliated parties as if the parties were unrelated or unaffiliated.

2.   Except as provided by this rule, an Authorized Person, directly or through an Affiliate, may not:

(a)  pay, contribute, share in the cost of or finance any part of the Business Expenses of a Producer;

(b)  pay, contribute, share in the cost of or finance any part of the expenses of an event or activity of a Trade Association that exists for the primary benefit of Producers and in which a majority of members are Producers; or

(c)  solicit or engage in a title insurance transaction(s) involving land located in more than one state which includes land located in Texas if:

      (1)  the policy premium charged or solicited to be charged by the Authorized Person or Affiliate for any title insurance policy issued in the transaction(s) covering the land described in the policy outside the state of Texas violates the law of that other jurisdiction where the land is located; or

      (2)  the policy premium for the land in the other jurisdiction is so discounted or reduced from the normal and customary charge as to constitute a thing of value in this state.

 3.  Notwithstanding Paragraph 2, an Authorized Person or its Affiliates may:

      (a)  join a Trade Association and voluntarily participate in a Trade Association’s activities provided that the level of such participation does not exceed normal participation (not more than two hours per business week) of a volunteer member of a Trade Association and is not activity that would ordinarily be performed by paid staff of a Trade Association;

      (b)  purchase advertising promoting the title insurance company or the title insurance agent at market rates from any person in any publication, event, or media; 

      (c)  deliver to a party in the transaction or the party's representative legal documents or funds which are directly or indirectly related to a real estate transaction closed by the Authorized Person; and

      (d)  engage in legal promotional and educational activities that are not conditioned on the referral of title insurance business.

4.   Authorized Persons shall maintain auditable records documenting compliance with this rule.

5.   In addition to any other sanction or penalty which the Commissioner may impose by law, after notice and opportunity for hearing, any person (including a Producer or Authorized Person) found to have violated this Rule is subject to a civil penalty of not more than $10,000 for each act of violation and for each day of violation, unless a greater penalty is specified by the Insurance Code or another insurance law of Texas.  The Escrow Officer, Title Insurance Agent or Direct Operation license or the certificate of authority of any person found in violation of this Rule may be suspended or revoked, after notice and opportunity for hearing.

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P-54. access endorsement (t-23)
A Company may issue its Access Endorsement (T-23) on or after the date Rate Rule R-30 is effective to a Mortgagee Policy (T-2) or Owner Policy (T-1) on land which contains improvements and which is not residential real property, if its underwriting requirements are met and if it is paid the premium, if any, prescribed in Rate Rule R-30. The Company may add any exception to the endorsement that it considers, in its sole discretion, to be appropriate. The Company shall delete any insuring provision or portion thereof if it does not consider that risk acceptable. Any insured matter covered in the Access Endorsement (T-23) may be insured only by the use of this endorsement. A Company may not issue its Access Endorsement (T-23) on residential real property.

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P-55. Non-imputation endorsement (t-24)
A Company may issue its Non-Imputation Endorsement (T-24) on or after the date that Rate Rule R-31 is effective to a concurrently issued Owner Policy (T-1) on land which is not residential real property, if its underwriting requirements are met and if it is paid the premium, if any, prescribed in Rate Rule R-31. The Company may add any exception to the endorsement that it considers, in its sole discretion, to be appropriate. Any matter covered in the Non-Imputation Endorsement (T-24) may be insured only by the use of this endorsement. A Company may not issue its Non-Imputation Endorsement on residential real property.

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P-56. contiguity endorsement (t-25)
A Company may issue its Contiguity Endorsement (T-25) on or after the date that Rate Rule R-32 is effective to a concurrently issued Mortgagee Policy (T-2) or Owner Policy (T-1) on land which is not residential real property; if title to each tract described in the Contiguity Endorsement (T-25) is insured by the policy; if the Company receives a survey acceptable to it; if its underwriting requirements are met and if it is paid the premium, if any, prescribed in Rate Rule R-32. The Company may add any exception to the endorsement that it considers, in its sole discretion, to be appropriate. Any matter covered in the Contiguity Endorsement (T-25) may be insured only by the use of this endorsement. A Company may not issue its Contiguity Endorsement on residential real property.

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P-57. additional insured endorsement (t-26)
A Company may issue its Additional Insured Endorsement (T-26) on or after the date that Rate Rule R-33 is effective to an Owner Policy by naming a person as an additional insured in the endorsement, if (1) its underwriting requirements are met, (2) it is paid the premium, if any, prescribed in Rate Rule R-33, and (3) the additional insured is (a) the trustee or successor trustee of a Living Trust to whom the insured transfers the title after Policy Date, and/or the beneficiaries of the Living Trust, or (b) any partner, member or stockholder that acquires the interests of the other owners of the insured in accordance with the terms and provisions of a written agreement in effect at Date of Policy, or (c) a family partnership or family corporation solely composed of or owned by members of the insured’s family and the insured. Any matter covered in the Additional Insured Endorsement (T-26) may be insured only by the use of this endorsement.

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p-58. report on directly issued policy
Each Title Insurance Company shall compile and submit to the Department annually, as part of the Texas Title Insurance Statistical Plan, a report of all directly issued [sometimes commonly referred to as Home Office Issued] policies of title insurance which shall include at least the following information:

(1)    Location of insured land identified by standard three (3) digit county code as set forth in Table 7 of the Texas Title Insurance Statistical Plan;

(2)   Gross Premium (for policy and all endorsements) and limits of liability on each policy issued;

(3)    Date of Policy;

(4)   Transaction identification number (guaranty file number or other identifier);

(5)   Requesting Agent’s TDI Agency/Direct Operation Company ID Number as shown on the Agent/Direct Operation license;

(6)    Cooperating Agent’s TDI Agency/Direct Operation Company ID Number as shown on the Agent/Direct Operation license; and,

(7)     Directly Issued Policy  “DIP” Status Code (Best Evidence = 0; Multicounty = 1).

The report shall be sorted by county (primary sort) and by the requesting agent’s TDI Agency/Direct Operation Company ID number as shown on the Agency/Direct Operation license (secondary sort) within each county. The report may contain additional information, totals, or subtotals as deemed necessary by the Title Insurance Company or as required by the Department.

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p-59 RECONCILIATION OF REFERENCES TO PROVISIONS OF THE INSURANCE CODE OF 1951 TO PROVISIONS OF THE TEXAS INSURANCE CODE AS RECODIFIED.
A reference in any provision of this Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas ("Basic Manual"), including an amendment, revision or readoption of a provision of this Basic Manual, to an Article, Chapter or Title, or part of an Article, Chapter or Title, of the Insurance Code of 1951, or any amendment, revision or readoption of a part of that Code, is considered to include a reference to the part of the Texas Insurance Code, as recodified, which revises that Article, Chapter or Title or part of the Article, Chapter or Title of the Insurance Code of 1951 pursuant to Section 323.007, Texas Government Code as part of the State’s continuing statutory revision program.

p-60  ASSIGNMENT OF RENTS/LEASES ENDORSEMENTS (T-27)
A Company may issue its Assignment of Rents/Leases Endorsement (T-27) on or after the date Rate Rule R-34 is effective to a contemporaneously issued Mortgagee Policy (T-2), if its underwriting requirements are met and it is paid the premium, if any, prescribed in Rate Rule R-34. The Company shall delete any insuring provision if it does not consider that risk acceptable. Any insured matter covered in the Assignment of Rents/Leases Endorsement (T-27) may be insured only by the use of this Assignment of Rents/Leases Endorsement (T-27).  The Assignment of Rents/Leases Endorsement (T-27) may not be issued on residential real property.

p-61 TIMELY PROVISION OF TITLE POLICIES
Title policies shall be provided and furnished to the insured within ninety (90) days after receipt by the title company of proof of compliance with the company’s Schedule C requirements.