Biennial Rule Hearing Change Index and Analysis
As previously reported, the Texas Department of Insurance has adopted new rules and forms as a result of the 2008 biennial rule hearing. To assist you in understanding these changes and help you prepare for compliance, TLTA has prepared a chart designed to help you quickly analyze what has changed and how it affects you. This chart can be used as a starting place for quick and easy orientation of the rules and as a launching point for further study.
For a
complete history of the creation of these new rules and forms, including
their
justifications and earlier versions please visit the
Rule Hearing section of the TLTA website.
As you review these changes, several items are of particular note. Agents will
now be required to develop and review annually a plan for winding down their
operations, as well as maintaining auditable records relative to the furnishing
of title evidence to clients. There are also some significant and positive new
options for title agents including the incorporation of changes in the law
allowing you to pass through electronic filing charges and third party tax
search service fees as well as the ability to charge for the furnishing of title
evidence in a P-24 transaction which does not close. Additionally, there are a
variety of new endorsements with which you should become familiar.
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For ease of use the index breaks down the changes into six categories:
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New Requirements for Title Agents and Underwriters
These are new requirements for Agents and Underwriters and should be carefully reviewed in ensure that you are in compliance with the new rules.
New Options for Title Agents and Underwriters
These are rule changes which allow Agents and Underwriters to do new things.
New Products
These are new endorsements and services which can now be offered.
Rule Clarifications
These are rules which were designed to make previous TDI policy easier to comply with and more clear. They were not meant to create a new rule but to clarify an old rule or practice.
ALTA Form Conformity
These are rule and form changes designed to simply conform the language with corresponding national ALTA policies and forms.
Housekeeping Items
These items are designed simply to correct typos, make language consistent among rules and forms, and to remove unnecessary language and references in the Basic Manual.
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New Requirements for Title Agents and Underwriters
|
Agenda Item |
Title |
Rule/Form |
Description |
|
Owner’s Policy of Title Insurance |
T-1 |
Amendment to the
Owner’s Policy of Title Insurance (T-1) to remove indemnity language,
thus ending the right of reimbursement
for defense costs from insured for defense of uninsured claims by the
Title Company. |
|
|
Loan Policy of Title Insurance |
T-2 |
Amendment to the
Loan Policy of Title Insurance (T-2) to remove indemnity language, thus
ending the right of reimbursement
for defense costs from insured for defense of uninsured claims by the
Title Company. |
|
|
Title Insurance Basic Manual |
L-1 |
Amendment to Administrative Rule L-1 to
provide that an underwriter may cancel an
agent’s license for cause without meeting the required advance notice of
30 days. The Department added a new requirement to specify
that if the company is the sole underwriter at the time of cancellation
then the underwriter must submit an orderly
plan for the winding down of the title agent’s operations
that is in compliance with Administrative Rule D-1. |
|
|
Ceasing Operations by Agents and Direct Operations |
D-1 |
Amendment to the
Requirements for Ceasing Operation by Agents and Direct Operations (D-1)
administrative rule in Section VI of the Basic Manual to
add to requirements of ceasing operation by
agents or direct operations and to update statutory
references in the rule. The agent must
present a final accounting to each underwriter, and the agent must
create a plan for winding down and review this plan every year. |
|
Reasonable Time for Furnishing Title Evidence |
P-25 |
Amendment to the
Reasonable Time for Furnishing Title Evidence (P-25) procedural rule in
Section IV of the Basic Manual to provide a
requirement for title agents and direct operations to maintain auditable
records and documents that demonstrate compliance with the
rule and to update statutory references in the rule. |
|
|
Title Insurance Escrow Officer |
L-2 |
Amendment to the
Title Insurance Escrow Officer (L-2) rule in Section VI of the Basic
Manual to provide a procedure for a title
agent or direct operation to notify the Department upon a change of name
of a licensed escrow officer and to update statutory
references in the rule. |
New Options for Title Agents and Underwriters
|
Electronically Produced, Filed or
Recorded Forms, Instruments or Documents |
P-17 |
Amendment to
Procedural Rule P-17 to allow a pass-through
to consumers of electronic filing fees in accordance with HB 3073, as
enacted by the 81st Legislature, Regular Session, effective January 1,
2010. |
|
|
Minimum Standards, Specific Instructions
and Report Forms for Audit of Trust Funds Required of Texas Title
Insurance, Direct Operations, Title Attorneys, and Attorneys Licensed as
Escrow Officers |
|
An amendment to Specific Areas and Procedures 5 of the Minimum Standards to allow a pass-through to consumers of tax search service fees and certain notary fees in accordance with HB 3073, as enacted by the 81st Legislature, Regular Session, effective January 1, 2010.
|
|
|
Cancellation Fees: Fees for Services Rendered |
P-70 |
New Procedural
Rule (P-70) titled, Cancellation Fees; Fees for Services Rendered, to
define and prohibit cancellation fees and to otherwise
allow fees for furnishing title evidence
or furnishing title evidence and examination in a P-24 transaction
which does not close. |
|
|
Title Insurance Basic Manual |
L-1 |
An amendment to Administrative Rule L-1
to provide that an underwriter may cancel an
agent’s license for cause without meeting the required advance notice of
30 days. It includes a new requirement to specify that if the
company is the sole underwriter at the time of cancellation then the
underwriter must submit an orderly plan
for the winding down of the title agent’s operations that is in
compliance with Administrative Rule D-1. |
|
Texas Limited Coverage Residential Chain of Title Policy Combined Schedule |
T-53 |
A new form to
provide for a Limited Coverage Residential Chain of Title Policy
(T-53). This is a new product available only
for residential properties and to institutional lenders, mortgage
bankers, and insurers. This product will be available only when a rate
has been established. No rate has been established. |
|
|
Texas Limited Coverage Residential Chain of Title Policy |
P-71
|
A new Procedural
Rule (P-71) relating to the Limited Coverage Residential Chain of Title
Policy (T-53). This is a new product
available only for residential properties and to institutional lenders,
mortgage bankers, and insurers. |
|
|
Non-Imputation Endorsement |
T-24.1 |
A new form (T-24.1)
titled Non-Imputation Endorsement (Mezzanine Financing) to allow
non-imputation coverage provided in paragraph 4 of the Owner’s Policy to
be assigned by the Insured to a Mezzanine Lender.
This is a new product
equivalent to ALTA 16-06. This product will be
available only when a rate has been established. No rate has been
established. |
|
|
Non-Imputation Endorsement |
P-55 |
Amendment to P-55
to provide that the Non Imputation Endorsement (Mezzanine Financing)
(T-24.1) be issued In accordance with the same procedural provisions
currently set forth by the rule for the Non-Imputation Endorsement
(T-24). This is a new product
equivalent to ALTA 16-06. |
|
|
|
Contiguity Endorsement |
P-56 |
Amendment to
Procedural Rule P-56 providing that the new Contiguity Endorsement
(T-25.1) may be issued when the covered land is composed of 4 or more
parcels or of irregularly shaped parcels.
This new product only applies to non-residential property. |
|
Contiguity Endorsement Form |
T-25.1 |
A new Contiguity
Endorsement (T-25.1) not require the contiguous boundary lines of the
various parcels of land to be specifically identified.
This is a new form for providing contiguity
coverage. |
|
Issuance of Insured Closing Letters |
P-69 |
New Procedural Rule
(P-69) titled Issuance of Insured Closing Letters to
prohibit the issuance of Insured Closing Letter
by attorneys who are not licensed as escrow officers (Rule P-22
attorneys). This rule clarifies a TDI prohibition of this
practice. |
|
|
Reorganization of Procedural Rule |
P-20 |
Amendment to
Procedural Rule P- 20 to incorporate P-20, P-29 and Bulletin 153, all
pertaining to insuring taxes, into a single procedural rule. This change
makes the information more user friendly and easier to find and provides
guidance to a Company as to what may or may not be done regarding the
standard tax exception and the practice of insuring taxes.
Additionally, a conforming change has been made to the title of Rate
Rule R-24 to read “Applicable only as provided in Procedural P-20C”
because Procedural Rule P-29 has been merged with Procedural Rule P-20.
This rule change places all of the rules
relative to the treatment of taxes in one place and clarifies the
existing rules. |
|
Insured Closing Service |
|
Amendment to the
Insured Closing Service form (T-50) to substantially
conform to the ALTA Standard Closing Protection
Letter except however,
it maintains the current
two year coverage
period. |
|
|
Co-Insurance Endorsement |
T-48 |
Amendment to the
Co-Insurance Endorsement (T-48) to substantially
conform to the ALTA Standard Co-Insurance -
Single Policy Endorsement. |
|
|
Future Advance/Revolving Credit Endorsement |
T-35 |
Amendment to the
Future Advance/Revolving Credit Endorsement (T-35) to substantially
conform the language of the endorsement to the
ALTA Future Advance Endorsement and to conform the language
of the endorsement to the Loan Policy (T-2). |
|
|
Leasehold Loan Policy Endorsement |
T-5 |
Amendment to the
Leasehold Loan Policy Endorsement (T-5) to
conform the language of the endorsement to the ALTA Leasehold Loan
Endorsement and to conform the language of the endorsement to
the Loan Policy (T-2). |
|
Leasehold Owner’s Policy Endorsement |
T-4 |
Amendment to the Leasehold Owner’s Policy Endorsement (T-4) to conform the language of the endorsement to the ALTA Leasehold Owner’s Endorsement |
|
Residential Real Property Affidavit |
T-47 |
Amendment to the
Residential Real Property Affidavit (Form T-47) to
remove a duplicate reference to the title insurance company
in paragraph 6 of the form. |
|
|
Arbitration Provision |
P-36 |
Amendment to
Procedural Rule P-36 to allow for the
deletion of the arbitration provision on Schedule A of the
Loan Policy in order to make the rule consistent with the forms and to
amend outmoded references to the
Mortgagee and Owner Policy forms. |
|
|
Contents of Schedule D to Commitment for Title Insurance |
P-21 |
Amendment to Procedural Rule P-21 to conform the language of the rule with the language of the form by amending outmoded references relating to the Mortgagee and Owner Policy forms and to amend an outmoded reference to the State Board of Insurance.
|
|
|
Endorsement of Owner’s or Loan Policies |
P-9.b (8) |
Amendment to
Procedural Rule P-9.b(8) to conform the
language of the rule with the newly named Future
Advance/Revolving Credit Form (T-35) and to
delete the redundant instruction that that the Loan Policy
show by endorsement that the lien being insured secures a revolving
credit type of indebtedness. |
|
P-9.b(6) Endorsement of Owner’s or Loan Policies |
P-9.b(6) |
Amendment to
Procedural Rule P-9.b(6) to conform the language of the rule with the
language of the previously re-named
Variable Rate Mortgage Endorsement (T-33) and the Variable Rate
Mortgage-Negative Amortization Endorsement (T-33.1). |
|
|
Assignment of Rents/Leases Endorsement |
T-27 |
Amendment to the
Assignment of Rents/Leases Endorsement (T-27) to
correct typographical
errors. |
|
|
Forms T-1R, T-2R, and T-13 |
T-1R T-2R T-13
|
Amendment to the
Texas Residential Owner Policy of Title Insurance — One-To-Four Family
Residences (T-1R), the Texas Short Form Residential Mortgagee Policy of
Title Insurance (T-2R), and the Mortgagee Title Policy Binder on Interim
Construction Loan (T-13) to conform with the
language of the Owner’s Policy (T-1) and the Loan Policy
(T-2) by changing the term “Owner” to “Owner’s” and changing the term
“Mortgagee” to “Loan.” |
|
|
Name of Insured on Loan Policy of Title Insurance or Proposed Insured on Commitment for Loan Policy of Title Insurance |
P-7 |
Amendment to
Procedural Rule P-7 to change the language in paragraphs B and C to
conform with the language
of the Owner’s Policy (T-1) and the Loan Policy (T-2) and the
proposed changes to the Texas Residential Owner Policy of Title
Insurance — One-To-Four Family Residences (T-1 A), the Texas Short Form
Residential Mortgagee Policy of Title Insurance (T-2R), and the
Mortgagee Title Policy Binder on Interim Construction Loan (T-13). |
|
|
Loan Policy of Title Insurance Form - SCHEDULE B |
T-2 |
Amendment to Schedule B of the Loan Policy (T-2) to correct a typographical error. |
|
|
Loan Policy of Title Insurance Form |
T-2 |
Amendment to
Schedule A of the Loan Policy (T-2) to remove
the redundant Tax Deletion Endorsement (T-30) from the list
of optional endorsements on Schedule A and to remove language from
Schedule A regarding deleting provisions from affected endorsements,
which will require such deletions to be included as a special exception
on Schedule B of the commitment. |
|
|
Commitment for Title Insurance Form |
T-7 |
Amendment to the
Deletion of Arbitration Provision of the Commitment for Title Insurance
(T-7) to increase the threshold amount for arbitral matters to $2
million to conform with the language
of Procedural Rule P-36. |
|
|
Commitment for Title Insurance Form |
T-7 |
Amendment to the
Commitment for Title Insurance (Form T-7) to
conform the language of the form with the changed names of
the policies referenced therein. |
|
|
The Last Dollar Endorsement |
T-15 |
Rescission of the Last Dollar Endorsement (T-15)
in its entirety. |
|
|
P-9 Endorsement of Owner’s or Loan Policies |
P-9 |
Amendment to Procedural Rule P-9 to remove the procedure for issuance of the Last Dollar Endorsement (T-15), which was also rescinded. |
|
P-54. Access Endorsement (T-23) |
P-54 |
An amendment to
Procedural Rule P-54, titled Access Endorsement to
remove redundant language and update the
language. |
|
|
Section VI, Title Insurance Basic Manual
– Administrative Rules |
L-1 |
An amendment to the Title Insurance Agent (L-1) administrative rule in Section VI of the Basic Manual to update statutory references in the rule. |
|
|
Audit and Review of Agent/Direct Operation Escrow and Trust Accounts |
G.2 |
An amendment to the
Audit and Review of the Agent/Direct Operations Escrow and Trust
Accounts (G.2) administrative rule in Section VI of the Basic Manual
to update statutory references in the rule. |
|
|
Policy Guarantee Fee Remittance Form (T-G1) |
T-G1 |
An amendment to the
Policy Guaranty Fee Remittance (T-G1) form in Section V of the Basic
Manual to update the policy guaranty fee
amount shown on the remittance form to reflect the correct
amount due for each policy. |
|
|
Statement of Assessment Received From and Recoupments Distributed to Title Insurance Company (Form T-G3) |
T-G3 |
Amendment to the Statement of Assessment Received from and Recoupments Distributed to Title Insurance Company (T-G3) form in Section V of the Basic Manual. This item simply updates the date reference on the form. |
|
|
Guaranty Assessment Recoupment Charge Remittance Form (T-G2) |
T-G2 |
Amendment to the Guaranty Assessment Recoupment Charge Remittance (T-G2) form in Section V of the Basic Manual. This item simply updates the date and mailing address on the form. |
|
Supplemental Coverage Manufactured Housing Unit Endorsement Form (T-31.1) |
T-31.1 |
Amendment to the
Supplemental Coverage Manufactured Housing Unit Endorsement (T-31.1) in
Section II of the Basic Manual to remove a reference to “serial number”
in the form and to insert a reference to the “policy number.”
The item corrects a typo in the Basic Manual. |
|
|
Leasehold Loan Policy Endorsement Form (T-5) |
T-5 |
Amendment to the
Leasehold Mortgagee Policy Endorsement (T-5) in Section II of the Basic
Manual to remove a reference to “serial number’ in the form.
This item corrects a typo in the Basic Manual. |
|
|
Leasehold Owner’s Policy Endorsement Form (T-4) |
T-4 |
Amendment to the
Leasehold Owner Policy Endorsement (T-4) in Section II of the Basic
Manual to remove a reference to “serial number” in the form.
This item corrects a typo in the Basic Manual. |
|
|
Section VI, Title Insurance Basic Manual ADMINISTRATIVE RULES*** G-1. Policy Guarantee Fee |
G.1 |
Amendment to the
Policy Guaranty Fee (G.1) administrative rule in Section VI of the Basic
Manual to update statutory references in the rule.
This item updates a statutory reference in rule. |
|
Texas Title Insurance Statistical Plan |
N/A |
Amendments to the Statistical Plan to provide Rate Code references and to add statistical reporting codes for the following: (i) new Co-Insurance Endorsement (T-48), (ii) new personal property title insurance forms and endorsements, (iii) new Texas Limited Coverage Residential Chain of Title Policy Form (T-53), (iv) new
Minerals and Surface Damage Endorsements (T-19.2 and T-19.3), (v) the
Restrictions, Encroachments, Minerals Endorsement-Owner’s Policies
(T-19.1), (vi) the new Non-Imputation Endorsement (Mezzanine Financing)
(T-24.1), and (vii) the new Contiguity Endorsement (T-25.1)
This is the comprehensive item to update the
statistical plan and provide rate codes for new products. |
