reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.001. Short Title

Sec. 2501.001.  SHORT TITLE.  This title may be cited as the Texas Title Insurance Act.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.002. Purpose; Legislative Intent

Sec. 2501.002.  PURPOSE;  LEGISLATIVE INTENT.  (a)  The purpose of this title is to completely regulate the business of title insurance on real property and, as described by Subtitle F, on personal property, including the direct issuance of policies and the reinsurance of any assumed risks, to:
(1)  protect consumers and purchasers of title insurance policies; and
(2)  provide adequate and reasonable rates of return for title insurance companies and title insurance agents.
(b)  It is the express legislative intent that this title accomplish the purpose described by Subsection (a).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 543 (S.B. 1153), Sec. 2, eff. September 1, 2007.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.004. Abstract Plant; Joint Abstract Plant Operation

Sec. 2501.004.  ABSTRACT PLANT;  JOINT ABSTRACT PLANT OPERATION.  (a)  For purposes of this title, the department shall define "abstract plant" and "joint abstract plant operation."
(b)  To provide for the safety and protection of policyholders, the department shall require that an abstract plant:
(1)  be geographically arranged;
(2)  cover a period beginning not later than January 1, 1979, and be kept current; and
(3)  be adequate for use in insuring titles, as determined by the department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 1, eff. September 1, 2009.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.005. Business of Title Insurance

Sec. 2501.005.  BUSINESS OF TITLE INSURANCE.  (a)  For purposes of this title, a person engages in the business of title insurance if the person:
(1)  as insurer, guarantor, or surety, makes or proposes to make a contract or policy of title insurance or its equivalent;
(2)  transacts or proposes to transact any phase of title insurance, including:
(A)  soliciting;
(B)  title examination other than an examination conducted by an attorney;
(C)  closing the transaction other than a closing conducted by an attorney;
(D)  executing a contract of title insurance;  and
(E)  insuring and transacting matters arising out of the contract after the contract is executed, including reinsurance;  or
(3)  makes a guaranty or warranty of a title search or a title examination, or any component of a title search or title examination, if the person is not the person who performs the search or examination.
(b)  A person engages in the business of title insurance if the person engages in or proposes to engage in any business that is substantially equivalent to the business of title insurance as described by this section, regardless of whether that conduct is performed in a manner designed to evade the provisions of this title.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.006. Closing the Transaction

Sec. 2501.006.  CLOSING THE TRANSACTION.  (a)  For purposes of this title, "closing the transaction" describes the investigation that is made:
(1)  on behalf of a title insurance company, title insurance agent, or direct operation before the title insurance policy is issued;  and
(2)  to determine proper execution, acknowledgment, and delivery of all conveyances, mortgage papers, and other title instruments necessary to consummate a transaction.
(b)  Closing the transaction includes a determination that:
(1)  all delinquent taxes have been paid;
(2)  in the case of an owner title insurance policy, all current taxes, based on the latest available information, have been properly prorated between the purchaser and seller;
(3)  the consideration has been passed;
(4)  all proceeds have been properly disbursed;
(5)  a final search of the title has been made;  and
(6)  all necessary papers have been filed for record.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.007. References to Title

Sec. 2501.007.  REFERENCES TO TITLE.  In this title, a reference to this title includes a reference to:
(1)  Chapter 223;
(2)  Chapter 271; and
(3)   Subchapter U, Chapter 171, Tax Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.077, eff. September 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.008. Third-Party Charges

Sec. 2501.008.  THIRD-PARTY CHARGES.  A title insurance company, title insurance agent, or direct operation may charge, separate from the title insurance premium, actual costs or a reasonable estimate of costs incurred in connection with a closing and settlement, including:
(1)  a charge by a third party for an electronic filing fee; or
(2)  a fee of a third party for the provision of an ad valorem tax report.
Added by Acts 2009, 81st Leg., R.S., Ch. 1159 (H.B. 3073), Sec. 1, eff. January 1, 2010.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2501 - General Provisions › Section 2501.009. Gifts, Grants, and Donations for Educational Purposes

Sec. 2501.009.  GIFTS, GRANTS, AND DONATIONS FOR EDUCATIONAL PURPOSES.  (a)  The department may accept gifts, grants, and donations to enable employees of the department to participate in educational events, and for other educational purposes, related to title insurance.
(b)  The commissioner may adopt rules related to the acceptance of gifts, grants, and donations described in Subsection (a).
Added by Acts 2011, 82nd Leg., R.S., Ch. 1011 (H.B. 2408), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.001. Engaging in Certain Insurance Business Prohibited

Sec. 2502.001.  ENGAGING IN CERTAIN INSURANCE BUSINESS PROHIBITED.  (a)  A domestic or foreign corporation operating under this title may not engage in the business of any kind of insurance other than title insurance.
(b)  A company may not engage in the business of title insurance if the company engages in the business of another kind of insurance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.002. Coverage for Unmarketability of Title Prohibited

Sec. 2502.002.  COVERAGE FOR UNMARKETABILITY OF TITLE PROHIBITED.  (a)  An insurance company may not insure against loss or damage by reason of unmarketability of title.
(b)  The commissioner may not adopt a rule or form providing for coverage prohibited by this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.003. Insuring Around Defined; Prohibitions and Exceptions

Sec. 2502.003.  INSURING AROUND DEFINED;  PROHIBITIONS AND EXCEPTIONS.  (a)  Except as provided by Subsection (c), a title insurance company may not wilfully issue a binder for title insurance or a title insurance policy showing no outstanding enforceable recorded liens on real property against which the company knows an outstanding enforceable recorded lien exists.
(b)  A title insurance company knows that an outstanding enforceable recorded lien exists against real property if, based on an examination of the title under which the binder for title insurance or title insurance policy is issued, the company determines that the lien is valid and enforceable.
(c)  The commissioner by rule may approve circumstances under which a title insurance company may issue a binder for title insurance or a title insurance policy otherwise prohibited by Subsection (a).
(d)  Except as otherwise provided by this section, a title insurance company may determine the insurability of title to real property and any other matter that the company considers to be insurable under a binder for title insurance or a title insurance policy issued in connection with the property.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.004. Guarantee of Mortgage Payment Prohibited

Sec. 2502.004.  GUARANTEE OF MORTGAGE PAYMENT PROHIBITED.  (a)  A title insurance company may not guarantee the payment of a mortgage on real property.
(b)  A title insurance company that violates this section forfeits its authority to engage in business in this state and shall immediately surrender its certificate of authority.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.005. Civil Penalty

Sec. 2502.005.  CIVIL PENALTY.  (a)  A person is liable to the state for a civil penalty of not more than $5,000 if the person:
(1)  wilfully violates Section 2502.003 or 2502.004;  or
(2)  violates an order of the commissioner refusing to approve an application to issue a binder for title insurance or a title insurance policy prohibited by Section 2502.003(a).
(b)  The department may bring an action in a Travis County district court to recover the penalty provided by this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter A. Prohibited Conduct in General › Section 2502.006. Certain Extra Hazardous Coverages Prohibited

Sec. 2502.006.  CERTAIN EXTRA HAZARDOUS COVERAGES PROHIBITED.  (a)  A title insurance company may not insure against loss or damage sustained by reason of any claim that under federal bankruptcy, state insolvency, or similar creditor's rights laws the transaction vesting title in the insured as shown in the policy or creating the lien of the insured mortgage is:
(1)  a preference or preferential transfer under 11 U.S.C. Section 547;
(2)  a fraudulent transfer under 11 U.S.C. Section 548;
(3)  a transfer that is fraudulent as to present and future creditors under Section 24.005, Business & Commerce Code, or a similar law of another state; or
(4)  a transfer that is fraudulent as to present creditors under Section 24.006, Business & Commerce Code, or a similar law of another state.
(b)  The commissioner may by rule designate coverages that violate this section.  It is not a defense against a claim that a title insurance company has violated this section that the commissioner has not adopted a rule under this subsection.
(c)  Title insurance issued in or on a form prescribed by the commissioner shall be considered to comply with this section.
(d)  Nothing in this section prohibits title insurance with respect to liens, encumbrances, or other defects to title to land that:
(1)  appear in the public records before the date on which the contract of title insurance is made;
(2)  occur or result from transactions before the transaction vesting title in the insured or creating the lien of the insured mortgage; or
(3)  result from failure to timely perfect or record any instrument before the date on which the contract of title insurance is made.
(e)  A title insurance company may not engage in the business of title insurance in this state if the title insurance company provides insurance of the type prohibited by Subsection (a) anywhere in the United States, except to the extent that the laws of another state require the title insurance company to provide that type of insurance.
Added by Acts 2011, 82nd Leg., R.S., Ch. 1059 (S.B. 322), Sec. 1, eff. September 1, 2011.
Added by Acts 2011, 82nd Leg., R.S., Ch. 1063 (S.B. 735), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.051. Rebates and Discounts Prohibited

Sec. 2502.051.  REBATES AND DISCOUNTS PROHIBITED.  A commission, rebate, discount, portion of a title insurance premium, or other thing of value may not be directly or indirectly paid, allowed, or permitted by a person engaged in the business of title insurance or received or accepted by a person for engaging in the business of title insurance or for soliciting or referring title insurance business.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.052. Certain Divisions of Real Property Charges Prohibited

Sec. 2502.052.  CERTAIN DIVISIONS OF REAL PROPERTY CHARGES PROHIBITED.  Other than for services actually performed, a person may not give or accept any portion, split, or percentage of a charge made or received for a settlement or closing performed in connection with a transaction involving the conveyance or mortgaging of real property located in this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.053. Certain Compensatory Payments Not Prohibited

Sec. 2502.053.  CERTAIN COMPENSATORY PAYMENTS NOT PROHIBITED.  This subchapter does not prohibit:
(1)  payment for services actually performed by a title insurance company, title insurance agent, or direct operation in connection with title examination or with closing the transaction or furnishing title evidence if:
(A)  the payment does not exceed the percentage of premium or other amount established by the commissioner for the payment;  and
(B)  the person receiving the payment is licensed as provided by this title;
(2)  payment of bona fide compensation to a bona fide employee principally employed by a title insurance company, title insurance agent, or direct operation;
(3)  reasonable payment for goods or facilities actually provided and received;  or
(4)  payment for services actually performed by an attorney in connection with title examination or with closing the transaction, if the payment does not exceed a reasonable charge for the services.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.054. Certain Divisions of Premiums Not Prohibited

Sec. 2502.054.  CERTAIN DIVISIONS OF PREMIUMS NOT PROHIBITED.  (a)  For purposes of this section, a subsidiary is a company at least 50 percent of the voting stock of which is owned by the title insurance company or by a wholly owned subsidiary of the title insurance company.
(b)  This subchapter does not:
(1)  prohibit a title insurance company from:
(A)  appointing as its title insurance agent for a county a person who owns or leases and operates an abstract plant for that county;  and
(B)  arranging for a division of premiums with the agent as set by the commissioner;  or
(2)  affect the division of a premium between a title insurance company and its subsidiary title insurance agent when the company directly issues a title insurance policy or contract under Section 2704.002.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.055. Promotional and Educational Activities Not Rebates

Sec. 2502.055.  PROMOTIONAL AND EDUCATIONAL ACTIVITIES NOT REBATES.  (a)  The activities described in this section are not rebates.  Nothing in this subchapter prohibits a title insurance company or a title insurance agent from:
(1)  engaging in promotional and educational activities that are not conditioned on the referral of title insurance business and not prohibited by Subchapter B, Chapter 541;
(2)  purchasing advertising promoting the title insurance company or the title insurance agent at market rates from any person in any publication, event, or media;
(3)  delivering to a party in the transaction or the party's representative legal documents or funds which are directly or indirectly related to a transaction closed by the title insurance company or title insurance agent;
(4)  participating in an association of attorneys, builders, developers, realtors, or other real estate practitioners provided that the level of such participation does not exceed normal participation of a volunteer member of the association and is not activity that would ordinarily be performed by paid staff of an association; or
(5)  providing continuing education courses at market rates, regardless of whether participants receive credit hours.
(b)  "Market rate" means the price at which a seller, under no obligation or duress to sell, is willing to accept and a buyer, under no obligation or duress to buy, is willing to pay in an arms-length transaction.  The market rate is determined by comparing the rights or items purchased or sold to similar rights or items that have been recently purchased by others or sold to others, including others not in the title insurance business.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2005, 79th Leg., Ch. 631 (H.B. 2565), Sec. 7, eff. September 1, 2005.
Acts 2011, 82nd Leg., R.S., Ch. 1011 (H.B. 2408), Sec. 2, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.056. Monetary Forfeiture

Sec. 2502.056.  MONETARY FORFEITURE.  (a)  A person who pays or receives a commission, rebate, discount, or other thing of value for soliciting or referring title insurance business in violation of Section 2502.051 is engaging in the unauthorized business of insurance.
(b)  After notice and opportunity for hearing, a person who makes or receives a payment described by Subsection (a) is liable for a monetary forfeiture in an amount not less than the value of or more than three times the value of the payment.
(c)  A monetary forfeiture under Subsection (b) is in addition to any other penalty provided by law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle A - General Provisions › Chapter 2502 - Prohibited Conduct › Subchapter B. Rebates and Discounts › Section 2502.057. Certain Compensatory Payments Related to Certain Electric Energy Projects Permitted

Sec. 2502.057.  CERTAIN COMPENSATORY PAYMENTS RELATED TO CERTAIN ELECTRIC ENERGY PROJECTS PERMITTED.  (a)  This section applies with respect to a utility project that is:
(1)  designed to produce, generate, transmit, distribute, sell, or furnish electric energy; and
(2)  valued on completion at more than $25 million.
(b)  A payment for furnishing title evidence for the issuance of a title insurance policy related to a project described by Subsection (a) may be:
(1)  a flat fee or fee calculated on an hourly basis that:
(A)  is payable on the date the title evidence is furnished; and
(B)  does not exceed $25,000; or
(2)  a portion of the title insurance premium:
(A)  based on the percentage established by the commissioner for payment by a title insurance company, title insurance agent, or direct operation for services performed by another title insurance company, title insurance agent, or direct operation; and
(B)  payable on the date of the issuance of the policy for which the evidence is furnished.
(c)  The payment must be:
(1)  made by the proposed insured to the title insurance company, title insurance agent, or direct operation that furnishes the title evidence; and
(2)  credited against the title insurance premium charged for the issuance of the title insurance policy for which the evidence is furnished.
(d)  Nothing in this section may be construed to allow the payment of an amount in violation of the premium rates promulgated or the division of premium established by the commissioner.
(e)  This section does not apply to a payment to a reinsurer for the assumption of reinsurance described by Subchapter G, Chapter 2551.
Added by Acts 2013, 83rd Leg., R.S., Ch. 1056 (H.B. 3106), Sec. 1, eff. September 1, 2013.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter A. General Provisions › Section 2551.001. Applicability of Title and Other Law

Sec. 2551.001.  APPLICABILITY OF TITLE AND OTHER LAW.  (a)  Except as provided by Subsection (c) and unless the business of title insurance or title insurance companies are expressly mentioned, the provisions of this code other than this title do not apply to:
(1)  a corporation incorporated or engaging in business exclusively under this title;  or
(2)  any title insurance business engaged in by a corporation created under:
(A)  Subdivision 57, Article 1302, Revised Statutes;
(B)  Chapter 861;  or
(C)  any other law.
(b)  A law enacted after September 7, 1951, does not apply to a title insurance company or title insurance business described by Subsection (a) unless the law expressly states that it applies.
(c)  To the extent applicable, the following provisions of this code apply to a title insurance company:
(1)  Articles 1.09-1 and 21.47;
(2)  Subsection (b), Article 1.04D;
(3)  Chapters 33, 82, 83, 84, 86, 102, 261, 281, 401, 402, 493, 494, 541, 547, 555, 701, 801, 802, 824, 828, 1805, and 2204;
(4)  Chapter 31, other than Section 31.005;
(5)  Chapter 32, other than Section 32.022(b);
(6)  Chapter 36, other than Sections 36.003, 36.004, and 36.101-36.106;
(7)  Subchapter A, Chapter 38;
(8)  Subchapters A-G, Chapter 101;
(9)  Chapter 982, other than Sections 982.003, 982.051, 982.101, 982.105, 982.106(b), 982.109, and 982.113; and
(10)  Sections 37.052, 39.001, 39.002, 81.001, 81.002, 81.004, 201.004, 201.005, 201.051, 201.055, 403.001, 403.051, 403.101, 521.002-521.004, 805.021, 822.001, 822.051, 822.052(1), (2), and (3), 822.053, 822.057, except Subsection (a)(4), 822.058, 822.059, 822.060, 822.155, 822.157, 822.158, except Subsection (a)(5), 841.004, 841.251, 841.252(a)-(c), and 4001.103.
(d)  This title governs in any conflict between a provision listed by Subsection (c) and a provision of this title.
(e)  This title does not regulate the practice of law by an attorney.  The actions of an attorney in examining title, in examining records regarding an interest insured under Chapter 2751, or in closing a real property or personal property transaction, regardless of whether a title insurance policy is issued, does not constitute the business of title insurance, unless the attorney elects to be licensed as an escrow officer.
(f)  Subsection (e) does not prohibit the commissioner from promulgating a premium for title insurance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 543 (S.B. 1153), Sec. 4, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2I.001, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch. 447 (H.B. 2353), Sec. 1, eff. September 1, 2009.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter A. General Provisions › Section 2551.002. Applicability of Law Governing Corporations

Sec. 2551.002.  APPLICABILITY OF LAW GOVERNING CORPORATIONS.  A title insurance company is subject to the Texas Business Corporation Act, the Texas Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq., Vernon's Texas Civil Statutes), and any other law of this state that governs corporations in general, to the extent those laws are not inconsistent with this title.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter A. General Provisions › Section 2551.003. Rulemaking; Authority of Department and Commissioner

Sec. 2551.003.  RULEMAKING;  AUTHORITY OF DEPARTMENT AND COMMISSIONER.  (a)  The commissioner may adopt and enforce rules:
(1)  that prescribe underwriting standards and practices on which a title insurance contract must be issued;
(2)  that define risks that may not be assumed under a title insurance contract, including risks that may not be assumed because of the insolvency of the parties to the transaction;  and
(3)  that the commissioner determines are necessary to accomplish the purposes of this title.
(b)  With respect to a company operating under this title that engages in the kinds of business described by Section 2551.051(b)(1) or (2) in a manner that might subject the company to another regulatory statute of this state, all examination and regulation shall be exercised by the department rather than any other state agency named in the other regulatory statute, as long as the corporation engages in the business of title insurance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.051. Formation; General Purposes and Powers

Sec. 2551.051.  FORMATION;  GENERAL PURPOSES AND POWERS.  (a)  A private corporation may be created and licensed under this title for the following purposes:
(1)  to compile and own or lease, or to acquire and own or lease, records or abstracts of title to real property or interests in real property in this state or other jurisdictions, to insure titles to that real property or interests in that real property, and to indemnify the owners of that real property, or the holders of interests in or liens on that real property, against loss or damage resulting from an encumbrance on or defect in the title to the real property or interests in the real property;
(2)  in transactions in which title insurance is to be or is being issued, to supervise or approve the signing of legal instruments affecting the interest to be insured, disbursement of money, prorations, delivery of legal instruments, closing of transactions, or issuance of commitments for title insurance specifying the requirements for title insurance and the defects in title necessary to be cured or corrected; and
(3)  to issue personal property title insurance under Chapter 2751.
(b)  A corporation described by Subsection (a) may exercise any of the following powers by including the power in the corporation's charter:
(1)  to make and sell abstracts of title in any county of this state or another state;
(2)  to accumulate and lend money and to purchase, sell or deal in notes, bonds, and securities, but without banking privileges;
(3)  to act as trustee under a lawful trust committed to the corporation by contract or will or by appointment by a court as trustee, receiver, or guardian;  and
(4)  to act as executor or guardian under the terms of a will or as an administrator of a decedent's estate under the appointment of a court.
(c)  Notwithstanding any other provision of this section, a corporation described by Subsection (a) is not authorized to practice law, as that term is defined by the courts of this state.  A corporation described by Subsection (a) is not authorized to prepare a legal instrument described by Subsection (a)(2).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 543 (S.B. 1153), Sec. 5, eff. September 1, 2007.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.052. Name

Sec. 2551.052.  NAME.  (a)  The name of a corporation chartered or operating under this title may contain the words "Title and Trust Company."
(b)  The name of a corporation chartered or operating under this title may not contain the word "Trust" alone.  If the word "Trust" appears in the corporation's letterhead or literature, the corporation shall include the words "Without Banking Privileges."
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.053. Stock and Surplus Requirements

Sec. 2551.053.  STOCK AND SURPLUS REQUIREMENTS.  (a)  A title insurance company must have a paid-up capital of at least $1 million and a surplus of at least $1 million.
(b)  The capital stock and minimum surplus requirements of a title insurance company must be maintained intact over and above all outstanding liabilities, except contingent liabilities on title insurance policies.
(c)  If a title insurance company suffers the impairment of its capital stock or minimum surplus requirements, the company shall immediately report the impairment to the department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 967 (S.B. 2065), Sec. 5.007, eff. September 1, 2017.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.054. Purchase of Own Stock

Sec. 2551.054.  PURCHASE OF OWN STOCK.  (a)  Subject to Section 2551.053(a) and the Texas Business Corporation Act, a title insurance company may purchase its own shares of stock.  A purchase of its own shares is not considered an investment and does not constitute a violation of a provision of this code relating to admissible investments.
(b)  A title insurance company that purchases its own shares must, not later than the 10th day after the date of purchase, file with the commissioner a statement listing:
(1)  the name of each shareholder from whom the shares have been purchased;  and
(2)  the amount paid for the shares.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.055. Charter of Corporation Engaging in Business of Title Insurance

Sec. 2551.055.  CHARTER OF CORPORATION ENGAGING IN BUSINESS OF TITLE INSURANCE.  (a)  The incorporators of a corporation engaging in the business of title insurance and incorporated under this title, Subdivision 57, Article 1302, Revised Statutes, Chapter 40, Acts of the 41st Legislature, Regular Session, 1929 (Article 1302a, Vernon's Texas Civil Statutes), or any other law shall file the corporation's original charter only with the department and shall certify the charter only to the department.
(b)  Only the department may collect from a company described by this section any filing fees required by law.
(c)  A corporation described by this section is not subject to another law to the extent that the law conflicts with this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter B. Formation › Section 2551.056. Regulation of Certain Corporations

Sec. 2551.056.  REGULATION OF CERTAIN CORPORATIONS.  (a)  A corporation incorporated under Subdivision 57, Article 1302, Revised Statutes, before February 27, 1929, and engaging in business in this state on February 27, 1929:
(1)  may continue to engage in business;
(2)  is subject to this title;  and
(3)  shall comply with the requirements of this title regarding investments and deposits.
(b)  A shareholder in a company acting under this title is not liable in the event of default in the payment of any debt or liability of the company beyond the shareholder's subscription for stock.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter C. Authority to Engage in Business › Section 2551.101. Certificate of Authority Required

Sec. 2551.101.  CERTIFICATE OF AUTHORITY REQUIRED.  A title insurance company may not engage in the business of title insurance in this state unless the company holds a certificate of authority issued under this title.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter C. Authority to Engage in Business › Section 2551.102. Issuance of Certificate of Authority

Sec. 2551.102.  ISSUANCE OF CERTIFICATE OF AUTHORITY.  (a)  Subject to Subsection (c), the department shall issue a certificate of authority to engage in the business of title insurance if, following any examination the department considers proper, the department makes a determination favorable to the title insurance company with respect to:
(1)  the payment of capital stock and surplus as required by this title;  and
(2)  the value of the assets used to pay the capital stock and surplus.
(b)  The title insurance company shall pay the expense of any examination conducted under Subsection (a).
(c)  Issuance of a certificate of authority to a foreign corporation is governed by Section 2553.001.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter D. General Powers and Duties › Section 2551.152. Annual Statement

Sec. 2551.152.  ANNUAL STATEMENT.  (a)  Not later than March 1 of each year, each title insurance company shall file with the commissioner a verified statement.
(b)  The statement must be in a form required by the commissioner and must:
(1)  provide a statement of the business engaged in by the title insurance company during the preceding year;  and
(2)  describe the condition of the company's affairs on December 31 of the preceding year.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter D. General Powers and Duties › Section 2551.153. Fees

Sec. 2551.153.  FEES.  The general laws applicable to payment of a filing fee by a corporation having capital stock apply to a corporation subject to this title.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter D. General Powers and Duties › Section 2551.154. Transfer of Certain Business to State Banks or Trust Companies

Sec. 2551.154.  TRANSFER OF CERTAIN BUSINESS TO STATE BANKS OR TRUST COMPANIES.  (a)  This section applies to a corporation chartered under Section 2551.051, or its antecedents, Article 9.01, Texas Insurance Code, or Chapter 40, Acts of the 41st Legislature, Regular Session, 1929 (Article 1302a, Vernon's Texas Civil Statutes), and empowered to act as:
(1)  trustee under a lawful trust committed to the corporation by contract or will or by appointment by a court as trustee, receiver, or guardian;  and
(2)  executor or guardian under the terms of a will or as an administrator of a decedent's estate under the appointment of the court.
(b)  A corporation described by Subsection (a) may transfer and assign to one of the following entities all of the corporation's fiduciary business in which the corporation is named or acts as guardian, trustee, executor, or administrator or in any other fiduciary capacity:
(1)  a state bank created under Subtitle A, Title 3, Finance Code, or a predecessor to that law;  or
(2)  a state trust company created under Chapter 181, Finance Code, or a predecessor to that law.
(c)  On a corporation's transfer or assignment to a state bank or trust company under this section, the state bank or trust company shall, without the necessity of any action in a court of this state or any action by the creator or beneficiary of the trust or estate:
(1)  continue the guardianship, trust, executorship, administration, or other fiduciary relationship related to the trust or estate;
(2)  perform all of the duties and obligations of the corporation related to the trust or estate;  and
(3)  exercise any powers and authority:
(A)  related to the trust or estate;  and
(B)  exercised by the corporation at the time of the transfer or assignment.
(d)  A transfer or assignment by a corporation under this section is not a resignation or refusal by the corporation to act on behalf of the guardianship, trust, executorship, administration, or other fiduciary relationship.
(e)  On a corporation's transfer or assignment to a state bank or trust company under this section, the naming or designation by a testator or the creator of a living trust of the corporation to act as trustee, guardian, or executor or in any other fiduciary capacity includes the naming or designation of the state bank or trust company and authorizes the state bank or trust company to act in that capacity.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter E. Required Deposit › Section 2551.201. Deposit Required; Amount

Sec. 2551.201.  DEPOSIT REQUIRED;  AMOUNT.  (a)  Except as provided by Section 2551.202, a title insurance company shall deposit and maintain in the state treasury, or other depository in this state named by the company and approved by the department, either:
(1)  cash;  or
(2)  securities described by Section 2551.151.
(b)  A title insurance company's deposit under this section must be in an amount equal to the lesser of:
(1)  one-fourth of the authorized capital of the company;  or
(2)  $100,000.
(c)  A deposit under this section is for the benefit of all policyholders.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter E. Required Deposit › Section 2551.202. Exception: Foreign Title Insurance Company

Sec. 2551.202.  EXCEPTION:  FOREIGN TITLE INSURANCE COMPANY.  (a)  A foreign title insurance company is not required to make a deposit under Section 2551.201 if the company has on deposit with insurance regulatory bodies in the United States an aggregate amount of deposit that:
(1)  is equal to the amount required by Section 2551.201;  and
(2)  secures all policyholders of the company, regardless of their location.
(b)  The foreign title insurance company must file with the department a certificate of deposit under the hand and seal of each insurance regulatory body holding a deposit of the company.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter E. Required Deposit › Section 2551.203. Withdrawal and Substitution of Deposit

Sec. 2551.203.  WITHDRAWAL AND SUBSTITUTION OF DEPOSIT.  A title insurance company may withdraw the deposit of securities made under Section 2551.201, or any portion of the deposit, after substituting other securities of a sufficient value to maintain the amount of deposit required under that section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter E. Required Deposit › Section 2551.204. Use of Deposit

Sec. 2551.204.  USE OF DEPOSIT.  (a)  Except as otherwise provided by Subsection (e), a deposit made under this subchapter may be used only to pay an obligation connected with title insurance.
(b)  On the insolvency or dissolution of a title insurance company, the company's deposit shall be used to protect title insurance policyholders even if no accrued title insurance claims exist and other unpaid obligations do exist, except as permitted by Subsection (e).
(c)  A title insurance company's deposit must be applied to:
(1)  the complete payment of any obligations and liabilities of the company connected with title insurance business;  and
(2)  the establishment of adequate reserves or reinsurance to protect any subsequently accruing or maturing title insurance obligations and liabilities.
(d)  The amount, handling, and distribution of any reserves required under Subsection (c)(2) are subject to the control and discretion of the department and are reviewable in judicial proceedings governed by rules applicable to review of rates under Subchapters D and E, Chapter 2703.
(e)  Any deposit amount remaining after payments under Subsection (c) must be applied to:
(1)  payment of other obligations and liabilities of the title insurance company;  or
(2)  distribution to shareholders.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter F. Reserves › Section 2551.251. Statutory Premium Reserve Required

Sec. 2551.251.  STATUTORY PREMIUM RESERVE REQUIRED.  (a)  Each domestic title insurer shall establish and maintain a statutory premium reserve.  The reserve is cumulative.  The reserve must consist of the amounts required under Sections 2551.252-2551.260 and must be established and maintained during the period and for the uses and purposes provided by those sections.
(b)  The reserve required under this section:
(1)  is considered to be unearned portions of the original premium;  and
(2)  must be charged as a reserve liability of the title insurer in determining the insurer's financial condition.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle B - Organization of Title Insurance Companies › Chapter 2551 - Title Insurers › Subchapter F. Reserves › Section 2551.252. Amounts Added to Reserve for Calendar Year 1997; Reductions

Sec. 2551.252.  AMOUNTS ADDED TO RESERVE FOR CALENDAR YEAR 1997;  REDUCTIONS.  (a)  The total charges of a domestic title insurer for title insurance policies written or assumed on or after January 1, 1997, and before January 1, 1998, are computed by adding the following, as described in the insurer's annual statement:
(1)  the direct premium written by the insurer;
(2)  the escrow and settlement service fees paid directly to and collected by the insurer;
(3)  other title fees and service charges paid directly to and collected by the insurer, including fees for closing protection letters;  and
(4)  premiums for any reinsurance assumed by the insurer, less premiums for reinsurance ceded by the insurer during that year.
(b)  The amount a domestic title insurer must set aside in the statutory premium reserve for the 1997 calendar year is computed by multiplying the total charges computed under Subsection (a) by:
(1)  6-1/5 percent if the insurer had $250 million or more in direct premium written for the year 1996;  or
(2)  3-1/2 percent if the insurer had less than $250 million in direct premium written for the year 1996.
(c)  A domestic title insurer shall reduce additions to the statutory premium reserve set aside for title insurance policies written or assumed during the year 1997 over a 20-year period beginning in the year after the year in which the policies are written or assumed, as provided by Subsection (d), by:
(1)  26 percent of the additions in the first year following the year of addition;
(2)  20 percent of the additions in the second year following the year of addition;
(3)  10 percent of the additions in the third year following the year of addition;
(4)  nine percent of the additions in the fourth year following the year of addition;
(5)  five percent of the additions in the fifth and sixth years following the year of addition;
(6)  three percent of the additions in the seventh, eighth, and ninth years following the year of addition;
(7)  two percent of the additions in the 10th through 14th years following the year of addition;  and
(8)  one percent of the additions in the last six years of the 20-year period.
(d)  A domestic title insurer shall make the annual reductions under Subsection (c) in increments of one-fourth of the appropriate percentage of the additions each on March 31, June 30, September 30, and December 31 of each year.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.