An Act Relating to Title Insurers Issuing Closing or Settlement Protection
Maine Legislature, Session 126, LD 1444
Committee: Insurance and Financial Services
Sponsors: BECK, LACHOWICZ, CAREY, CROCKETT, MORRISON
Amends: 24-A MRSA §3202

Legislative Document 
No. 1444 
H.P. 1038 
House of Representatives, April 24, 2013 
An Act Relating to Title Insurers Issuing Closing or Settlement 
Protection 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative BECK of Waterville. 
Cosponsored by Senator LACHOWICZ of Kennebec and 
Representatives: CAREY of Lewiston, CROCKETT of Bethel, MORRISON of South 
Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §3202 is enacted to read: 
§3202.  Closing protection letters 
1.  Title insurer may issue closing or settlement protection.  A title insurer may 
issue closing or settlement protection on a form of closing protection letter approved by 
the superintendent pursuant to section 2412.  Only a buyer, borrower or lender that is a 
party to a transaction in which a title insurance policy will be issued by or on behalf of 
the title insurer issuing the closing or settlement protection is eligible to receive the 
benefit of closing or settlement protection.  Closing or settlement protection issued 
pursuant to this subsection must benefit each buyer, borrower and lender that is a party to 
the transaction for which that closing or settlement protection is issued. 
2.  Indemnity.  The closing or settlement protection issued pursuant to subsection 1 
may indemnify a buyer, borrower or lender against loss because of one of the following 
acts of a policy-issuing title insurance agent or other settlement service provider under the 
terms and conditions of the closing protection letter as issued by the title insurer: 
A.  Theft or misappropriation of settlement funds in connection with a transaction, 
but only to the extent that the theft relates to the status of the title to an insured 
interest in land or to the validity, enforceability and priority of the lien of the 
mortgage on an insured interest in land; and 
B.  Failure to comply with the written closing instructions when agreed to by the 
settlement agent or title agent, but only to the extent that the failure to comply with 
the instructions relates to the status of the title to an insured interest in land or the 
validity, enforceability and priority of the lien of the mortgage on an insured interest 
in land. 
3.  Fee.  The fee charged by a title insurer for closing or settlement protection 
coverage must be filed with the superintendent pursuant to section 2304-A.  The fee may 
not be subject to any agreement requiring a division of fees or premiums collected on 
behalf of the title insurer.  A title insurer may charge only one fee for closing or 
settlement protection for a transaction and that fee may not be less than $50 for the 
protection of all parties receiving the benefit of closing or settlement protection in 
connection with the real property transaction giving rise to the issuance of the closing or 
settlement protection. 
4.  Provision of other protection prohibited.  Except as provided in this section, a 
title insurer may not provide any protection that purports to indemnify against improper 
acts or omissions of a person with regard to settlement or closing services. 
SUMMARY 
This bill allows title insurers to provide protection against theft or misappropriation 
of settlement funds and failure to comply with written closing instructions in connection 
with real estate closings.  The bill also provides that title insurers are allowed to charge a 
fee for this protection.