Text: HF00453 Text: HF00455 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 16.1, subsection 9, Code 2001, is 1 2 amended to read as follows: 1 3 9. "Division" means the Iowa title guaranty company 1 4 division. 1 5 Sec. 2. Section 16.1, subsection 39, Code 2001, is amended 1 6 to read as follows: 1 7 39. "Title insurance guaranty policy" meansaan insurance 1 8 guaranty policy against loss or damage caused by defective 1 9 title to real property. 1 10 Sec. 3. Section 16.2, subsection 1, unnumbered paragraph 1 11 2, Code 2001, is amended to read as follows: 1 12AAn Iowa title guaranty company division is created within 1 13 the authority. The powers of the division relating to the 1 14 issuance of titleguarantiesinsurance guaranty policies are 1 15 vested in and shall be exercised by a division board of five 1 16 members appointed by the governor subject to confirmation by 1 17 the senate. The membership of the board shall include an 1 18 attorney, an abstractor, a real estate broker, a 1 19 representative of a mortgage-lender, and a representative of 1 20 the housing development industry. The executive director of 1 21 the authority shall appoint an attorney as director of the 1 22 Iowa title guaranty company division who shall serve as an ex 1 23 officio member of the board. The appointment of and 1 24 compensation for the division director are exempt from the 1 25 merit system provisions of chapter 19A. 1 26 Sec. 4. Section 16.3, subsection 15, Code 2001, is amended 1 27 to read as follows: 1 28 15. The abstract-attorney's title opinion system promotes 1 29 land title stability for determining the marketability of land 1 30 titles and is a public purpose. A public purpose will be 1 31 served by providing, as an adjunct to the abstract-attorney's 1 32 title opinion system, a low cost mechanism to provide for 1 33 additional guaranties of real property titles in Iowa. The 1 34 titleguarantiesinsurance guaranty policies will facilitate 1 35 mortgage lenders' participation in the secondary market and 2 1 add to the integrity of the land-title transfer system in the 2 2 state. 2 3 Sec. 5. Section 16.5, subsection 15, Code 2001, is amended 2 4 to read as follows: 2 5 15. Through the Iowa title guaranty company division, make 2 6 and issue title insurance guaranties, through attorneys acting 2 7 on behalf of the division, on Iowa real property in a form 2 8 acceptable to the secondary market, to fix and collect the 2 9 charges for theguarantiesinsurance guaranty policies and to 2 10 procure reinsurance against any loss in connection with the 2 11guarantiesinsurance guaranty policies. 2 12 Sec. 6. Section 16.91, Code 2001, is amended to read as 2 13 follows: 2 14 16.91 TITLE INSURANCE GUARANTY PROGRAM. 2 15 1. The authority through the title guaranty company 2 16 division shall initiate and operate a one-stop program in 2 17 which the division, through participating attorneys acting on 2 18 behalf of the state, shall offerguarantiestitle insurance 2 19 guaranty policies of real property titles in this state. The 2 20 terms, conditions, and form of the title insurance guaranty 2 21 policy contract shall be forms approved by the division board. 2 22 The division shall fix a charge for the guaranty in an amount 2 23 sufficient to permit the program to operate on a self- 2 24 sustaining basis, including payment of administrative costs 2 25 and the maintenance of an adequate reserve against claims 2 26 under the title guaranty program. A title insurance guaranty 2 27 policy fund is created in the office of the treasurer of 2 28 state. Funds collected under this program shall be placed in 2 29 the title insurance guaranty policy fund and are available to 2 30 pay all claims, necessary reserves, and all administrative 2 31 costs of the title guaranty program. Moneys in the fund shall 2 32 not revert to the general fund and interest on the moneys in 2 33 the fund shall be transferred to the department of economic 2 34 development for deposit in the local housing assistance 2 35 program fund established in section 15.354 and shall not 3 1 accrue to the general fund. If the authority board in 3 2 consultation with the division board determines that there are 3 3 surplus funds in the title insurance guaranty policy fund 3 4 after providing for adequate reserves and operating expenses 3 5 of the division, the surplus funds shall be transferred to the 3 6 housing program fund created pursuant to section 16.40. 3 7 2. A title insurance guaranty policy, closing protection 3 8 letter, or gap coverage issued under this program is an 3 9 obligation of the division only and claims are payable solely 3 10 and only out of the moneys, assets, and revenues of the title 3 11 guaranty fund and are not an indebtedness or liability of the 3 12 state or an agent of the state. The stateisand an agent of 3 13 the state are not liable on any title insurance guaranty 3 14 policy, closing protection letter, or gap coverage. 3 15 3. With the approval of the authority board, the division 3 16 and its board shall consult with the insurance division of the 3 17 department of commerce in developing a title insurance 3 18 guaranty policy contract acceptable to the secondary market 3 19 and developing any other feature of the program with which the 3 20 insurance division may have special expertise. The insurance 3 21 division shall establish the amount for a loss reserve fund. 3 22 Except as provided in this subsection, the title insurance 3 23 guaranty program is not subject to the jurisdiction of or 3 24 regulation by the insurance division or the commissioner of 3 25 insurance. 3 264. Each participating attorney and abstractor may be3 27required to pay an annual participation fee to be eligible to3 28participate in the title guaranty program. The fee, if any,3 29shall be set by the division, subject to the approval of the3 30authority.3 315.4. The participation of abstractors and attorneys shall 3 32 be in accordance with rules established by the division and 3 33 adopted by the authority pursuant to chapter 17A. Each 3 34 participant shall at all times maintain liability coverage, 3 35 including errors and omission coverage, in amounts approved by 4 1 the division. Upon payment of a claim by the division, the 4 2 division shall be subrogated to the rights of the claimant 4 3 against all persons relating to the claim. A participating 4 4 attorney shall be domiciled and licensed to practice in this 4 5 state. 4 6 Additionally, each participating abstractor is required to 4 7 own or lease, and maintain and use in the preparation of 4 8 abstracts, an up-to-date abstract title plant including tract 4 9 indices for real estate for each county in which abstracts are 4 10 prepared for real property titles guaranteed by the division. 4 11 The tract indices shall contain a reference to all instruments 4 12 affecting the real estate which are recorded in the office of 4 13 the county recorder, and shall commence not less than forty 4 14 years prior to the date the abstractor commences participation 4 15 in the title insurance guaranty program. However, a 4 16 participating attorney providing abstract services 4 17 continuously from November 12, 1986, to the date of 4 18 application, either personally or through persons under the 4 19 attorney's supervision and control is exempt from the 4 20 requirements of this paragraph. 4 21 The division may waive the requirements of this subsection 4 22 pursuant to an application of an attorney or abstractor which 4 23 shows that the requirements impose a hardship to the attorney 4 24 or abstractor and that the waiver clearly is in the public 4 25 interest or is absolutely necessary to ensure availability of 4 26 titleguarantiesinsurance guaranty policies throughout the 4 27 state. 4 28 6. Upon receiving a request from a buyer or seller of 4 29 commercial or residential real estate, the buyer or seller 4 30 shall designate an attorney of the buyer's or seller's choice 4 31 provided the attorney meets the criteria provided in this 4 32 section. Prior to the issuance of a title insurance guaranty 4 33 policy by the attorney, thedivisionattorney shallrequire4 34evidence thathave an abstract of title to the property in 4 35 questionhas beenbrought up-to-date and certified by a 5 1 participating abstractor in a form approved by division rules 5 2and. Upon completion of a title opinion issued bya5 3participatingthe attorneyin the form approved in the rules5 4 stating the attorney's opinion as to the title, the attorney, 5 5 as an agent of the division, or the division shall issue a 5 6 title insurance guaranty policy directly to the buyer or 5 7 lender. The title insurance guaranty policy issued by the 5 8 attorney or the division shall be subject to and in 5 9 conformance with underwriting rules adopted by the authority 5 10 pursuant to chapter 17A. Within one week of issuing the title 5 11 insurance guaranty policy, the attorney shall send copies of 5 12 the title opinion and the title insurance guaranty policy to 5 13 the divisionshall require evidence of the abstract being5 14brought up-to-date and the. The abstractor shall retain 5 15 evidence of the abstract as determined by the board. 5 16 7.The attorney rendering a title opinion shall be5 17authorized to issue a title guaranty certificate subject to5 18the rules of the authority.When applicable during the title 5 19 insurance guaranty policy process, standardized forms provided 5 20 by the American land title association shall be used. 5 21 8. The division shall obtain an insurance rating similar 5 22 to that of title insurance companies. 5 23 9. The authority shall adopt a marketing strategy designed 5 24 to market the title insurance guaranty program to real estate 5 25 buyers, sellers, lenders, brokers, and attorneys in the state. 5 268.10. The authority shall adopt rules pursuant to chapter 5 27 17A that are necessary for the implementation of the title 5 28 guaranty program as established by the division and that have 5 29 been approved by the authority. 5 30 Sec. 7. Section 16.92, subsection 1, paragraph a, Code 5 31 2001, is amended to read as follows: 5 32 a. "Division" means the Iowa title guaranty company 5 33 division in the Iowa finance authority. 5 34 Sec. 8. Section 16.93, subsections 1, 2, and 3, Code 2001, 5 35 are amended to read as follows: 6 1 1. The authority through the Iowa title guaranty company 6 2 division may issue a closing protection letter to a person to 6 3 whom a proposed title insurance guaranty policy is to be 6 4 issued, upon the request of the person, if the division issues 6 5 a commitment for a title insurance guarantyor title guaranty6 6certificatepolicy. The closing protection letter shall 6 7 conform to the terms of coverage and form of the instrument as 6 8 approved by the division board and may indemnify a person to 6 9 whom a proposed title insurance guaranty policy is to be 6 10 issued against loss of settlement funds due to only the 6 11 following acts of the division's named participating attorney 6 12 or participating abstractor: 6 13 a. Theft of settlement funds. 6 14 b. Failure by the participating attorney or participating 6 15 abstractor to comply with written closing instructions of the 6 16 person to whom a proposed title insurance guaranty policy is 6 17 to be issued relating to title certificate coverage when 6 18 agreed to by the participating attorney or participating 6 19 abstractor. 6 20 2. A closing protection letter shall only be issued to a 6 21 person to whom a proposed title insurance guaranty policy is 6 22 to be issued for real property transactions in which the 6 23 division has committed to issue an owner or lender certificate 6 24 and for which the division receives a premium and other 6 25 payments or fees for a title insurance guarantycertificate6 26 policy or other coverage. 6 27 3. The division board shall establish the amount of 6 28 coverage to be provided and may distinguish between classes of 6 29 property including, but not limited to, residential, 6 30 agricultural, or commercial, provided that the total amount of 6 31 coverage provided by the closing protection letter shall not 6 32 exceed the amount of the commitment or title insurance 6 33 guaranty policy to be issued. Liability under the closing 6 34 protection letter shall be coextensive with liability under 6 35 the certificate to be issued in connection with a transaction 7 1 such that payments under the terms of the closing protection 7 2 letter shall reduce by the same amount the liability under the 7 3 title insurance guarantycertificatepolicy and payment under 7 4 the title insurance guarantycertificatepolicy shall reduce 7 5 the liability under the terms of the closing protection 7 6 letter. 7 7 Sec. 9. Section 535.8, subsection 2, paragraph b, 7 8 subparagraph (10), Code 2001, is amended to read as follows: 7 9 (10) The cost of a title insurance guaranty policy issued 7 10 by the Iowa finance authority pursuant to chapter 16. 7 11 EXPLANATION 7 12 This bill amends the title guaranty program administered by 7 13 the title guaranty division of the Iowa finance authority. 7 14 The bill changes the name of the title guaranty division to 7 15 the Iowa title guaranty company division. The bill also 7 16 changes references in the Code from title guaranty to title 7 17 insurance guaranty policy. 7 18 The bill provides that the authority through the title 7 19 guaranty company division shall initiate and operate a one- 7 20 stop program in which the division, through participating 7 21 attorneys acting on behalf of the state, shall offer title 7 22 insurance guaranty policies of real property titles in this 7 23 state. 7 24 The bill provides that an attorney participating in the 7 25 program shall be domiciled and licensed to practice in Iowa. 7 26 The bill provides that attorneys and abstractors participating 7 27 in the program shall maintain liability coverage, including 7 28 errors and omission coverage, in amounts approved by the 7 29 division. 7 30 The bill provides that upon receiving a request from a 7 31 buyer or seller of commercial or residential real estate, the 7 32 buyer or seller shall designate an attorney of the buyer's or 7 33 seller's choice provided the attorney meets the participating 7 34 attorney criteria. The bill provides that prior to the 7 35 issuance of a title insurance guaranty policy by the attorney, 8 1 the attorney shall have an abstract of title to the property 8 2 in question brought up-to-date and certified by a 8 3 participating abstractor in a form approved by division rules. 8 4 The bill provides that upon completion of a title opinion 8 5 issued by the attorney as an agent of the division stating the 8 6 attorney's opinion as to the title, the attorney as an agent 8 7 of the division or the division shall issue a title insurance 8 8 guaranty policy directly to the buyer or lender. The bill 8 9 provides that the policy issued by the attorney or division 8 10 shall be subject to and in conformance with underwriting rules 8 11 adopted by the authority. 8 12 The bill provides that within one week of issuing the title 8 13 insurance guaranty policy, the attorney shall send copies of 8 14 the title opinion and the title insurance guaranty policy to 8 15 the division. The bill provides that the abstractor shall 8 16 retain evidence of the abstract as determined by the board. 8 17 The bill provides that, when applicable during the title 8 18 insurance guaranty policy process, standardized forms provided 8 19 by the American land title association shall be used. The 8 20 bill provides that the division shall obtain an insurance 8 21 rating similar to that of title insurance companies. 8 22 The bill provides that the authority shall adopt a 8 23 marketing strategy designed to market the title insurance 8 24 guaranty program to real estate buyers, sellers, lenders, 8 25 brokers, and attorneys in the state. 8 26 LSB 1909YH 79 8 27 tm/cf/24
Text: HF00453 Text: HF00455 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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