TDI Issues Guidance on Electronic Signatures
New guidance for title industry on electronic signatures for escrow checks, directly issued policies that require countersignatures

March 27, 2020 

The Texas Department of Insurance (TDI) has issued a bulletin with new guidance for the title industry on electronic signatures for escrow checks and directly issued policies that require countersignatures by bona fide officers or employees of the title insurance company.
 
The professionals at TDI have been working hard to ensure that title insurance continues to work for our Texas real estate economy during this unprecedented public health crisis. On behalf of all our members, partners in the real estate sector and Texas consumers, we extend our deepest gratitude for TDI's hard work and determination to keep us moving forward.
 
In the bulletin TDI published today, TDI notes that the Business and Commerce Code Chapter 322, also known as the Uniform Electronic Transactions Act (UETA), provides that:

• Documents may be signed using an electronic signature
• An electronic record complying with the UETA satisfies a law requiring a person to retain that record for an audit or similar purpose

If a title agent or company executes documents, including checks, with electronic signatures, the agent must be able to show the electronically signed documents were signed by only those legally authorized to do so. This may be demonstrated through an audit of their electronic records and security procedures.
 
Electronic signatures for escrow checks
The Minimum Escrow Accounting Procedures and Internal Controls in Section V of the Basic Manual require two signatures on all escrow checks unless the title agent has four or fewer employees.
 
If the standards and requirements of the UETA are met, escrow checks may be signed electronically. Checks signed electronically must have two signatures, and one of the signatures must be from an escrow officer.
 
Bulletin B-0011-20, which allows a single signature, does not apply to electronic signatures, except for offices with four or fewer employees.
 
Directly issued policies
If the standards and requirements of the UETA are met, electronic signatures on directly issued policies meet the Procedural Rule P-31 requirement for original signatures.
 
If you have any questions, please contact TDI at TitleExaminations@tdi.texas.gov. Visit TDI’s coronavirus resource page for additional messages and guidance to the industry.