TTIGA Policy Fee Reduced to $0 Beginning Jan. 1, 2014

The Texas Title Insurance Guaranty Association (TTIGA) Board of Directors recently voted to terminate, for the time being, the collection of policy guaranty fees by decreasing the fee from $2.00 to $0.00 effective Jan. 1, 2014. You should make the appropriate changes to your closing and collection procedures by Jan. 1, 2014. Please note: The guaranty fee has been decreased to $0 in the past and increased again at a later date, so this is not a permanent change and the guaranty fee likely will be raised again at a future date.

It is also important that you continue collecting the policy guaranty fee of $2.00 through the end of 2013 and that you timely remit those fees for the fourth quarter of this year — the period Oct. 1 through Dec. 31, 2013. Those fees will be due on or before Feb. 1, 2014. Any title agent or direct operation not remitting all collected guaranty fees for 2013 will be subject to the usual fines or penalties as determined by the Texas Department of Insurance.

There will be no remittances due for the first quarter of 2014 and after, unless and until the board approves an increase to the guaranty fee.  

Frequently Asked Questions
TTIGA issues answers to some frequently asked questions yesterday, and we have republished those below. Hopefully these will be of assistance to you in making this change.

Should we close our GF bank account?
Most agents pay their GFs from their normal escrow accounts, but some agents pay the GF from a separate escrow or trust account solely for that purpose. You don't need to close the account. There are two reasons. First, while the GF is zero beginning Jan. 1, 2014, it could be raised again by the TTIGA Board any time in the future; however, you could close it for a couple years. Second, there may be a recoupment charge for the entire year of 2014 that is paid to TTIGA quarterly, and it can be paid from the same account. Many title agents have even styled their special account the “GF/Recoupment Account” since it is dual purpose. For more information about the recoupment charge, read the next question.

What is the Recoupment Charge?
This charge is detailed in Sec. IV - Procedural Rules, Rule P-30 in the Basic Manual. At this time, TTIGA is unsure about the specifics of the recoupment amount and the form to be used because there is a hearing at the Texas Department of Insurance on Nov. 15, 2013 at 9:00 a.m. to determine the amount of the recoupment charge and when the fee will go into effect. The title underwriters were assessed money to cover claims in conjunction with the impairment of Southern Title Insurance Corporation, and the underwriters are authorized to recover that money through the collection of the recoupment charge. It is collected by the title agencies, remitted to TTIGA quarterly, and 30 days after the quarterly deadline, TTIGA must send the money to the title underwriters on a pro rata share based on their assessment percentage.

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