265—9.13 (16) Claims.
	 9.13(1) Claim procedures. In the event of loss or damage or potential loss or damage arising by reason of a matter actually, possibly, or allegedly within the coverage of a commitment or certificate or by reason of any other matter for which the division is actually, possibly, or allegedly liable (referred to herein as a “claim”), the rights and responsibilities of the division and the participating abstractor and participating attorney are as follows:
	  a.   	 Upon receipt of notice by a participant of a claim, the participant must notify the division in writing, setting forth and including at a minimum:
	 (1) 	 The name, address, and telephone number of the claimant and the claimant’s attorney, if any;
	 (2) 	 The number assigned to the commitment and certificate and a copy of the commitment and certificate if not previously forwarded to the division; and
	 (3) 	 A description of the claim and copies of any documents, correspondence, surveys, title searches, or other writings, and other information supplied to or available to the participant relevant to the claim.
Under this rule, the participant shall notify the division within three business days of receipt of information about a claim by the participant and shall mail notification to the division by first-class mail at the division’s address in subrule 9.4(1). In addition to the notice required by the preceding sentence, if the nature of the claim is such that the insured claimant or the division, or both, may suffer loss or damage that might be reduced or avoided by notice given more promptly than required by the preceding sentence, the participant shall notify the division by telephone, facsimile transmission, overnight mail or other overnight delivery service, or any combination of these methods.
	  b.   	 When a participant receives a request from the division for information with respect to a claim, the participant shall supply to the division any documents, correspondence, surveys, abstracts of title, title searches, other writings, or other information known by or available to the participant and relevant to the claim, even if not specifically requested by the division. The participant’s response to the division under this paragraph must be made within three days of the participant’s receipt of the request and must be sent by first-class mail to the division employee, agent, or other authorized person who requested the information. In addition to the participant’s response as required by the preceding sentence, if the nature of the claim is such that the insured claimant or the division, or both, may suffer loss or damage that might be reduced or avoided by a response quicker than that required by the preceding sentence, or if the division requests a quicker response, the participant shall respond by telephone, facsimile transmission, overnight mail or other overnight delivery service, or any combination of these methods, to the division employee, agent, or other authorized person requesting the information.
	  c.   	 A participant shall cooperate fully in the investigation and resolution of a claim and shall supply any additional, new information that may come to the participant’s attention with such promptness as the circumstances permit.
	  d.   	 The division may, with or without prior notice to the participant or participants involved, investigate and resolve any claim in any manner that, in the division’s sole discretion, the division may deem advisable. Investigation and resolution may include, but are not limited to, determinations of liability, retention of counsel for the division or for the insured claimant, settlement with the insured claimant or other party, and recovery of amounts paid.
	 9.13(2) Claim loss recovery from participants.
	  a.   	 Amounts paid by the division in the investigation and resolution of a claim, hereinafter referred to as a “claim loss,” including, but not limited to, payments to the insured, payments to adverse claimants, attorneys’ fees, and all other expenses and costs related to or arising from the claim in accordance with the provisions of this rule, are recoverable from a participant by the division.
	  b.   	 In the absence of knowledge by the participant about the title defect or other matter causing the claim loss, the division shall not seek recovery from the participant when a claim loss arises from one or more of the following:
	 (1) 	 Hidden defects, including, but not limited to, forged deeds and mortgages, false affidavits, and false statements of marital status;
	 (2) 	 Errors by public officials in maintaining and indexing the public records including, but not limited to, errors by county assessors, recorders, clerks, and treasurers;
	 (3) 	 Errors in these rules, the division’s manuals, guides, procedures, and any other written or oral instructions or requirements given by the division that the participant relies upon in issuing an abstract of title, opinion, commitment, certificate, or endorsement;
	 (4) 	 Errors in surveys provided by registered Iowa land surveyors that the participant relies upon in giving survey coverage or issuing an endorsement or endorsements; or
	 (5) 	 Underwriting determinations or title risks approved by the division prior to issuance of the abstract of title, opinion, commitment, certificate, or endorsement.
	  c.   	 The participant shall reimburse the division for a claim loss when the division determines, in accordance with 9.13(2)“d,” that the participant is liable and when the claim loss arises from one or more of the following:
	 (1) 	 Errors by the participant in the title search and report of information in the public record;
	 (2) 	 Reliance by the participant upon sources of title searches and other title information that had not been approved by the division at the time of the reliance;
	 (3) 	 Errors made by the participant in examining the title information provided in an abstract of title, survey, affidavit, or other source of title information;
	 (4) 	 Errors made by the participant in the preparation or review of an abstract of title, opinion, commitment or certificate;
	 (5) 	 Knowing issuance of an abstract of title, opinion, commitment or certificate by the participant upon a defective title; or
	 (6) 	 Failure of the participant to follow these rules, the division’s manuals, guides, procedures, or any other written or oral instructions or requirements given by the division with respect to any other matters not included within 9.13(2)“c.”
	  d.   	 Unless another rule, the Code of Iowa, a procedure, or a guideline provides for a different standard of liability or other rule for determining whether the participant shall be liable for a claim loss, the division shall apply the following standards:
	 (1) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(1), the division may demand reimbursement from the participant if the participant was grossly negligent in conducting the title search. Gross negligence includes the failure to make a search or the use of inadequate search procedures. Gross negligence under the preceding sentence includes but is not limited to failure to search certain indices, failure to search all names of parties with an interest in the real estate, or failure to search in all public offices required by the division search procedures or procedures used by prudent title searchers if the division has not established specific search procedures. In making its determination whether to seek recovery, the division may consider the complexity of the public record, the reliance of the participant upon division-approved search procedures, the training and experience of the person who made the error, and the existence or nonexistence of previous search errors by the participant.
	 (2) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(2), the division may demand reimbursement from the participant if the participant relied upon sources of title searches or other title information that had not been approved by the division at the time of the reliance.
	 (3) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(3), the division may demand reimbursement from the participant if the participant negligently examined the title information used in making a title determination, failed to raise an appropriate exception, waived an exception, or endorsed a title commitment or certificate. The division may make full review of local county abstracting standards and bar title rules as a guide to determine whether the participant has failed to meet the standard of skill and competence of an abstractor who prepares an abstract of title or a lawyer who examines titles in the community where the claim arose. The division may also consider whether the participant followed these rules, the division’s manuals, guides, procedures, or any other written or oral instructions or requirements given by the division in examining the title. In addition, the division may seek input from other participants in the community in which the claim arose as to the standard of care of an abstractor who prepares an abstract of title or of a lawyer who examines titles in that community.
	 (4) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(4), the division may demand reimbursement from the participant if the participant negligently prepared and reviewed an abstract of title, opinion, commitment or certificate.
	 (5) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(5), the division may demand reimbursement from the participant if the issuance of the abstract of title, opinion, commitment or certificate constituted fraud, concealment or dishonesty, or if the issuance of the abstract of title, opinion, commitment or certificate was based upon an underwriting decision on an unusual risk that was made without contacting the division for approval.
	 (6) 	 In the event that a claim loss occurs for which the division may seek recovery from the participant under 9.13(2)“c”(6), the division may demand reimbursement from the participant if the participant failed to follow these rules, the division’s manuals, guides, procedures, or any other written or oral instructions or requirements given by the division with respect to the matter causing the claim loss.
	 (7) 	 In the event the division seeks reimbursement from a participant, the division shall state the basis of the reimbursement as indicated in 9.13(2)“c” and 9.13(2)“d”(1) to (6).
	  e.   	 The division board may, from time to time by resolution, establish levels of authority, including dollar amounts, for the board, the director and division staff for the settlement of claims made under the title guaranty certificates.