Source: https://development.code.dccouncil.us/dc/council/code/titles/31/chapters/50A/
Timestamp: 2019-04-23 12:28:54+00:00

Document:
D.C. Law Library - Chapter 50A. Title Insurance Insurers.
§ 31–5031.02. Licensing needed to transact business.
§ 31–5031.03. Authorized activities of title insurers.
§ 31–5031.04. Limitations on powers.
§ 31–5031.10. Restrictions on dividends.
§ 31–5031.12. Direct operations and policyholder treatment.
§ 31–5031.13. Duties of title insurers utilizing the services of title insurance producers.
§ 31–5031.14. Conditions for maintaining escrow and indemnity deposit accounts.
§ 31–5031.15. Prohibition of rebate and fee splitting.
§ 31–5031.16. Favored producer of title insurer; buyer’s right to choose.
§ 31–5031.17. Premium rate filings and standards.
§ 31–5031.19. Filing by rating bureaus.
§ 31–5031.20. Record retention requirements.
§ 31–5031.21. Penalties and liabilities.
§ 31–5031.22. Violations of Real Estate Settlement Procedures Act (“RESPA”).
(1) “Abstract of title” or “abstract” means a written history, synopsis, or summary of the recorded instruments affecting the title to real property.
(2) “Affiliate” means, with respect to a person, another person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person.
(4) “Attorney” means a person who holds a license to practice law in the District of Columbia.
(4A) “Business entity” means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
(5) “Commissioner” means the Commissioner of the Department of Insurance, Securities, and Banking, or the Commissioner’s representatives, or the commissioner, director, or superintendent of insurance in any other state.
(iv) A subsidiary of a parent or holding entity owning a title insurer.
(7) “Escrow” means written instruments, money, or other items deposited by one party with a depository, escrow agent, or escrowee for delivery to another party upon the performance of a specified condition or the happening of a certain event.
(8) “Escrow Officer” means a person who maintains an escrow or indemnified deposit account.
(9) “Escrow, settlement, or closing fee” means the consideration for supervising or handling the actual execution, delivery, or recording of transfer and lien documents and for disbursing funds.
(10) “Fire and Casualty Act” means Chapter 25 of this title [§ 31-2501.01 et seq.].
(11) “Foreign title insurer” means any title insurer incorporated or organized under the laws of any other state of the United States or any other jurisdiction of the United States.
(12) “Indemnity” or “indemnity deposit” means funds or other property received by the title insurer as collateral to secure an indemnitor’s obligation under an indemnity agreement pursuant to which the insurer is granted a perfected security interest in the collateral in exchange for agreeing to provide coverage in a title insurance policy for a specific title exception to coverage.
(12A) “Individual” means a natural person.
(13) “IRLA” means Chapter 13 of this title [§ 31-1301 et seq.) ].
(14) “Net retained liability” means the total liability retained by a title insurer for a single risk, after taking into account any ceded liability and collateral, acceptable to the Commissioner, maintained by the insurer.
(15) “Non-U.S. title insurer” means any title insurer incorporated or organized under the laws of any foreign nation or any province or territory.
(16) “Person” means an individual or business entity.
(17) “Personal property” means stock ownership in a cooperative housing association.
(D) Qualified under any additional rules established by the Commissioner.
(C) Acting as broker, agent, representative, or attorney of a person who buys or sells any interest in real property or who lends or borrows money with the interest as security.
(21) “Subsidiary” means an affiliate controlled by a person, directly or indirectly, through one or more intermediaries.
(F) Matters insuring the correctness or marketability of title.
(23) “Title insurance commitment” means a preliminary report, commitment, or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions, and any other matters incorporated by reference under which the title insurer is willing to issue its title insurance policy.
(ii) Soliciting or negotiating title insurance business.
(v) An employee of a title insurer; provided, that the employee’s activities are not focused on transactions in the District of Columbia, his or her primary responsibilities cover multiple states, and his or her involvement in transactions is to coordinate with title insurance producers licensed in the District of Columbia who conduct title insurance business.
(26) “Title insurer” or “insurer” means a company organized under laws of the District of Columbia for the purpose of transacting the business of title insurance and any foreign or non-U.S. title insurer licensed in the District of Columbia to transact the business of title insurance.
(27) “Title plant” means a set of records consisting of documents, maps, surveys, or entries affecting title to real property or any interest in or encumbrance on the property, which have been filed or recorded in the jurisdiction for which the title plant is established or maintained.
(28) “Underwrite” means to accept or reject, or have the authority to accept or reject, risk on behalf of a title insurer.
The 2013 amendment by D.C. Law 20-40 repealed (3); added (4A) and (12A); rewrote (16); repealed (20); and substituted “real or personal property” for “residential or personal property” in (25)(A).
For temporary (90 day) addition, see § 2142 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
Short title: Section 2141 of D.C. Law 18-223 provided that subtitle M of title II of the act may be cited as the “Title Insurance Insurer Act of 2010”.
No person, other than a domestic, foreign, or non-U.S. title insurer organized on the stock plan and licensed under Chapter 25 of this title [§ 31-2501.01 et seq.], shall issue a title insurance policy or otherwise transact the business of title insurance in the District.
For temporary (90 day) addition, see § 2143 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(4) Maintain or perform escrow, indemnity, or settlement services.
For temporary (90 day) addition, see § 2144 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) An insurer that transacts any class, type, or kind of business other than title insurance business shall not be eligible for the issuance or renewal of a license to transact the business of title insurance in the District of Columbia and shall not transact title insurance business.
(b) A title insurer shall not engage in the business of guaranteeing payment of the principal of, or the interest on, bonds or mortgages.
(B) Failure to comply with the written closing instructions by the proposed insured when agreed to by the title insurance producer, to the extent that they relate to the status of the title to that interest in land or the validity, enforceability, and priority of the lien of the mortgage on that interest in land.
(2) The Commissioner may promulgate by rule pursuant to § 31-5031.23, or approve, a required charge for providing the coverage.
(4) Except as provided under this chapter, a title insurer shall not provide any other coverage which purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services.
(5) The form of closing protection letter used by a title insurer and rates shall be filed with the Commissioner as provided by § 31-5031.18(b)(3).
The 2013 amendment by D.C. Law 20-40, in (c)(1), deleted “solely” preceding “against loss” and deleted “only” preceding “because of”; and repealed (c)(3).
For temporary (90 day) addition, see § 2145 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
Before being licensed to do an insurance business in the District, a title insurer shall establish and maintain a minimum paid-in capital of not less than $500,000 and paid-in initial surplus of at least $500,000, for a total minimum capital and surplus total of at least $1 million.
For temporary (90 day) addition, see § 2146 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(2) The aggregate amount of the investment shall not exceed the lesser of 20% of admitted assets or 40% of surplus to policyholders, as shown on the most recent annual statement of the title insurer on file with the Commissioner.
For temporary (90 day) addition, see § 2148 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) Except as otherwise provided in this section, the IRLA shall apply to all domestic title insurers subject to this chapter. In applying the provisions of the IRLA, the court shall consider the unique aspects of title insurance and shall have broad authority to fashion relief that provides for the maximum protection of the title insurance policyholders.
(b) Indemnity and escrow funds held by or on behalf of the title insurer shall not become general assets and shall be administered as secured creditor claims as provided in the IRLA.
(c) Title insurance policies issued by a domestic title insurer that are in force at the time an order of liquidation is entered shall not be canceled except upon a showing to the court of good cause by the liquidator. The determination of good cause shall be within the discretion of the court. In making this determination, the court shall consider the unique aspects of title insurance and all other relevant circumstances.
(d) The court may set appropriate dates that potential claimants shall file their claims with the liquidator as to a domestic title insurer. The court may set different dates for claims based upon the title insurance policy than for all other claims. In setting dates, the court shall consider the unique aspects of title insurance and all other relevant circumstances.
(e) As of the date of the order of insolvency or liquidation, all premiums paid, due, or to become due under policies of the domestic title insurers shall be fully earned. It shall be the obligation of producers, insureds, or representatives of the title insurer to pay fully earned premium to the liquidator or rehabilitator.
The 2013 amendment by D.C. Law 20-40 substituted “producers” for “agents” in (e).
For temporary (90 day) addition, see § 2150 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
A domestic title insurer shall only declare or distribute a dividend to shareholders without the prior written approval of the Commissioner as would be permitted under § 31-706, for insurers other than life insurers.
For temporary (90 day) addition, see § 2151 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(2)(A) Additional direct operations business from a single source if, when added to other direct operations business from the single source during the same calendar year, the aggregate premiums written on the direct operations business of the single source will exceed 20% of the title insurer’s gross premiums written during the prior calendar year as shown on the title insurers most recent annual statement on file with the Commissioner.
(B) For purposes of this paragraph, the term “single source” means a person that refers business to the title insurer and any other person that controls, is controlled by, or is under common control with, that person.
(7) Any other circumstances considered by the Commissioner to be appropriate.
The 2013 amendment by D.C. Law 20-40 substituted “producer” for “agent” and substituted “producer’s” for “agent’s” throughout the section.
For temporary (90 day) addition, see § 2152 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
“Please read the exceptions and the terms shown or referred to herein carefully. The exceptions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.
(D) The purchaser-mortgagor may obtain an owner’s title insurance policy protecting the property owner at a specified cost or approximate cost, if the proposed coverages or amount of insurance is not then known.
(2) A copy of the notice, signed by the purchaser-mortgagor, shall be retained in the relevant underwriting file at least 3 years after the effective date of the policy.
The 2013 amendment by D.C. Law 20-40 deleted “residential” preceding “property” in (a) and (b)(1); substituted “no later than the time of closing” for “as soon as reasonably possible prior to closing” in (a); and substituted “3 years” for “5 years” in (b)(2).
For temporary (90 day) addition, see § 2153 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) The title insurer shall not accept business from a title insurance producer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and, if both parties share responsibility for a particular function, specifies the division of responsibilities.
(c) The title insurer shall, at least annually, conduct an on-site review, or a review conducted electronically that would accomplish the functional equivalent of the same, of the underwriting, claims, and escrow practices of the title insurance producer which shall include a review of the producer’s policy blank inventory and processing operations. If the title insurance producer does not maintain separate bank or trust accounts for each title insurer it represents, the title insurer shall verify that the funds held on its behalf are reasonably ascertainable from the books of account and records of the title insurance producer.
(d) Within 30 days after executing or terminating a contract with a title insurance producer, the title insurer shall provide written notification of the appointment or termination and the reason for termination to the Commissioner. Notices of appointment of a title insurance producer shall be made on a form promulgated by the Commissioner.
(e) A domestic title insurer shall not appoint to its board of directors an officer, director, employee, controlling shareholder, or any title insurance producer who wrote 1% or more of the title insurer’s direct premiums written during the previous calendar year as shown on the title insurer’s most recent annual statement on file with the Commissioner. This subsection shall not apply to relationships governed by Chapter 7 of this title [§ 31-701 et seq.].
(f) The title insurer shall maintain an inventory of all policy forms or policy numbers allocated to each title insurance producer.
(g) The title insurer shall have on file proof that the title insurance producer is licensed in the District.
(h) The title insurer shall establish the underwriting guidelines and, if applicable, limitations on title claims settlement authority to be incorporated into contracts with its title insurance producers.
The 2013 amendment by Law 20-40 repealed (b); and substituted “producer” for “agent” in (e).
For temporary (90 day) addition, see § 2154 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(B) The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted.
(b) Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying how and to whom the funds may be disbursed.
(3) Any other provisions the Commissioner may require.
(d) Any interest received on funds deposited in connection with any escrow, settlement, indemnity deposit, or closing shall be paid, net of administrative costs, to the depositing party, unless the depositor’s instructions for the funds or a governing law provides otherwise.
(5) Credit transfers through the Automated Clearing House which have been deemed available by the depository institution receiving the credits transfers and conform to the operating rules set forth by the National Automated Clearing House Association.
(2) Amend, alter, or supersede other sections of this chapter, or the laws of the District of Columbia or the United States, regarding an escrow holder’s duties and obligations.
(g) The Commissioner may prescribe a standard agreement for escrow, settlement, closing, or indemnity deposit funds.
For temporary (90 day) addition, see § 2155 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
A title insurer or other person shall not give or receive, directly or indirectly, any consideration for the referral of title insurance business or escrow or other service provided by a title insurer.
For temporary (90 day) addition, see § 2156 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) A title insurer shall not participate in any transaction in which it knows that a title insurance producer or other person requires, directly or indirectly, or through any trustee, director, officer, producer, employee, or affiliate, as a condition precedent to selling or furnishing any other person a loan, or loan extension, credit, sale, property, contract, lease, or service, that the other person shall place a title insurance policy of any kind with the title insurer or through a particular title insurance producer.
(b) No seller of property shall require, directly or indirectly, that the buyer purchase title insurance from any particular title producer or insurer.
The 2013 amendment by DC Law 20-40 designated the existing text as (a); substituted “producer” for “agent” throughout (a); and added (b).
For temporary (90 day) addition, see § 2157 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) A title insurer or title insurance producer may charge any rates regulated by the District of Columbia after January 1, 2011; provided, that in accordance with the premium rate schedule and manual filed by the title insurer with and approved by the Commissioner in accordance with applicable law and rules governing rate filings. The Commissioner may provide, by rule, for interim use of premium rate schedules in effect prior to January 1, 2011.
(b) The Commissioner may establish rules, including rules providing statistical plans, for use by all title insurers and title insurance producers in the recording and reporting of revenue, loss, and expense experience in such form and detail as is necessary to aid him or her in the establishment of rates and fees.
(c) The Commissioner may require that the information provided under this section be verified by oath of the insurer’s or title insurance producer’s president or vice president or secretary or actuary, as applicable. The Commissioner may further require that the information required under this section be subject to an audit conducted by an independent certified public accountant. The Commissioner may establish a minimum threshold level at which an audit would be required.
(d) Information filed with the Commissioner relating to the experience of a particular producer shall be kept confidential, subject to subchapter II of Chapter 5 of Title 2 [§ 2-531 et seq.].
For temporary (90 day) addition, see § 2158 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a)(1) The Commissioner may require that all policy forms used by every company covering title risks in the District be filed with the Commissioner. The Commissioner shall have authority to disapprove, within 60 days after the date of the receipt of a filing, the use in the District of any policy form which is inequitable, or does not comply with District law.
(2) If a policy form is not disapproved for use within the 60-day period described in paragraph (1) of this subsection, the Commissioner may not disapprove the form for use unless it does not comply with District law.
(c) After notice and opportunity to be heard are given to the insurer or rate service organization which submitted a form for approval, the Commissioner may withdraw approval of the form on finding that the use of the form is contrary to the legal requirements applicable at the time of withdrawal. The effective date of withdrawal of approval shall not be less than 90 days after notice of withdrawal is given.
(d) An approved policy form or endorsement providing coverage for which no identifiable premium is assessed may be incorporated into every applicable title insurance policy. The insurer shall disclose any additional coverage to the insured. The provisions of this section shall not operate to eliminate any underwriting standard of conditions relating to the approved policy forms or endorsements.
(e) Any term or condition related to an insurance coverage provided by an approved title insurance policy or any exception to the coverage, except those ascertained from a search and examination of records relating to a title or inspection or survey of a property to be insured, shall only be included in the policy after the term, condition, or exception has been filed with the Commissioner and approved.
This section is referenced in § 31-5031.04.
The 2013 amendment by D.C. Law 20-40 rewrote (a).
For temporary (90 day) addition, see § 2159 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(3) It authorizes the Commissioner in writing to accept the filings on the title insurer’s behalf.
(2) Prohibit the filing of deviations from rate service organization filings by any member or subscriber.
For temporary (90 day) addition, see § 2160 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
Evidence of the examination of title and determination of insurability for business written by a title insurer or title insurance producer and records relating to escrow and indemnity deposits shall be preserved and retained by the insurer or producer for as long as appropriate to the circumstances but not less than 3 years after the title insurance policy has been issued or 3 years after the escrow or indemnity deposit account has been closed. This section shall not apply to a title insurer acting as coinsurer if one of the other coinsurers has complied with this section.
The 2013 amendment by D.C. Law 20-40 substituted “insurer or producer” for “insurer or agent” in the first sentence.
For temporary (90 day) addition, see § 2161 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(3) Revocation or suspension of the title insurer’s license.
(b) This section shall affect the right of the Commissioner to impose any other penalties provided for in any acts relating to insurance which are codified in this title.
For temporary (90 day) addition, see § 2162 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
The Commissioner or Attorney General may bring an action in a court of competent jurisdiction to enjoin or seek remedies for violations of the Real Estate Settlement Procedures Act of 1974, approved December 23, 1974 (88 Stat. 1724; 12 U.S.C. § 2601 et seq.).
For temporary (90 day) addition, see § 2163 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(a) The Commissioner, through the Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [§ 2-501 et seq.], may issue rules to implement the provisions of this chapter.
(b) The Commissioner may issue orders to implement the provisions of this chapter.
For temporary (90 day) addition, see § 2164 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
(2) Supplement the provisions of Chapter 25 of this title [§ 31-2501.01 et seq.].
(2) Limit or restrict the rights of policyholders, claimants, and creditors.
(c) If there is a conflict between a provision of this chapter and any provision in an act relating to insurance which is codified in this title, Chapter 25 of this title [§ 31-2501.01 et seq.], this chapter shall apply.
(d) This chapter shall apply as of January 1, 2011 and to all transactions entered into after January 1, 2011.
For temporary (90 day) addition, see § 2165 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).

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§ 31
 § 2142
 § 2143
 § 2144
 § 31
 § 31
 § 2145
 § 2146
 § 2148
 § 2150
 § 31
 § 2151
 § 2152
 § 2153
 § 2154
 § 2155
 § 2156
 § 2157
 § 2158
 § 31
 § 2159
 § 2160
 § 2161
 § 2162
 § 2601
 § 2163
 § 2164
 § 2165