December 11, 2013                           View in Browser >


Aaron Day
Director of Government Affairs and Counsel
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Beware of Confusing These Two Fees
Denise Werst | Member, Texas Title Insurance Guaranty Association Board of Directors
Texas Regulatory Coordinator | National Investors Title Insurance Company

Many industry members are asking about a new fee — the Guaranty Assessment Recoupment Charge — that we are to collect from consumers starting Jan. 1, 2014. Agents have been collecting a policy Guaranty Fee that ends Dec. 31, 2013 — and then we start collecting this new fee. How confusing. Aren't they the same thing?

Well, no, they're not the same thing. The two fees serve different purposes.

The Policy Guaranty Fee is collected and used to pay covered claims against trust funds or an escrow account of a title insurance agent that has been declared impaired by TDI. Additionally, the funds from this fee are also used for the expense of staffing auditors at TDI as well as the cost of the audit function. As necessary, the Texas Title Insurance Guaranty Association (TTIGA) Board determines the amount of the Guaranty Fee, based on the amount of money estimated to be necessary to cover claims and allowed expenses. This fee has been as low as $0 and as high as $5 over the years.

The Guaranty Assessment Recoupment Charge (GARC) results when a title insurance underwriter is designated as impaired. When this happens, the Board estimates the amount necessary to pay the association's obligations and the expenses of handling covered claims under a title insurance policy. In order to process these claims, each underwriter is assessed a prorata share based on its net direct written premiums. Then, the "guaranty assessment recoupment fee" is determined. The income from the GARC is used to reimburse the underwriters for the assessment they paid.

When in effect, both of the fees are remitted quarterly to TTIGA, using a prescribed form. Failure to timely report and remit these fees can result in fines by TDI.

Fortunately for Texas consumers, Texas is one of only a few states that has statutes to protect consumers if a title agent or title insurance underwriter is declared financially impaired and subsequently ceases business. When a title insurance agent or a title insurance underwriter is designated by the Commissioner as financially impaired, it is placed under a court order of supervision, conservatorship, rehabilitation or liquidation. In either case, TTIGA must promptly estimate the amount of additional money needed to supplement the assets of the impaired company to pay all covered claims and administrative expenses. But the kind of claims covered are different for an agent than for an underwriter. Hence the type of fee and the amount of the fee that is collected is different.

TLTA Member Denise Werst serves on the Texas Title Insurance Guaranty Association Board of Directors and as Texas Regulatory Coordinator for National Investors Title Insurance Company as well as Vice President, Policy and Compliance for Independence Title Company in Austin. Want to contribute an article to one of our newsletters? Email ryan@tlta.com.

Basic Manual Changes Coming in January — to Get Your Updates!
Substantial changes are coming to the Basic Manual in 2014, and the first updates will go into effect Friday, Jan. 3, 2014. If you haven't already, subscribe to TLTA's Basic Manual Online Service here to ensure you receive these updates as soon as they occur. If you subscribed in 2013 and simply need to renew, you can do so here. If you have any questions about your subscription, please email education@tlta.com or call 512.472.6050.

Home Equity Loans With Borrower’s Non-Compliance Complaints:
Unintended Consequences of  Filing Bankruptcy Proof of Claim
Perry Cockerell | Cantey Hanger LLP
The decision to file a proof of claim is usually made as a matter of routine by the creditor because collecting the debt is not a title claim issue. But filing a claim could result in the loss of asserting statute of limitations as a defense in home equity loans more than four years old that might have non-compliance issues.  If non-compliance is raised, then the ability to assert a statute of limitations defense is lost before the claim is filed. Not filing a claim in some cases would work to the advantage of the lender and the insurance company insuring the lien. Read More »

TLTA member Perry Cockerell is a Partner with Cantey Hanger LLP. 


Upcoming Webinar on New TDI Requirements — Register Today!
Agent Licensing Changes & New CE Requirements

Tuesday, Dec. 17 | 10:30 - 11:30 a.m.
Agency owners and managers, as well as underwriter agency representatives and managers, should definitely find the time for this webinar. There are several changes in how existing agents will be licensed the future, as well as new training requirements to be met for new agent licensing. Learn More & Register »

Did you miss any of the other three webinars in this series? Register for the on-demand recordings below, and watch them at your convenience!

 New Agent Solvency Requirements
Overview of New TDI Rule and Form Changes
New & Revised Procedural Rules, Rate Rules & Forms

 

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