Idaho Administrative Code › Title IDAPA 18 - Insurance, Department of › Rule 18.05.01 - RULES FOR TITLE INSURANCE REGULATION › Section 18.05.01.012 - PROCEDURAL RULES

Current through August 31, 2023
01.
Miscellaneous Reports
. Where an insurer or its agent issues
			 judgment reports, lot book reports or property search reports, each such report
			 will specifically contain the following statement: "This report is based on a
			 search of our tract indexes of the county records. This is not a title or
			 ownership report and no examination of the title to the property described has
			 been made. For this reason, no liability beyond the amount paid for this report
			 is assumed hereunder, and the company is not responsible beyond the amount paid
			 for any errors and omissions contained herein." (3-31-22)
02.
Special Exceptions
. An
			 insurer may insert such special exception(s) as may develop from an examination
			 of the title. A special exception will specifically describe the item excepted
			 to and will not be general in terms. The printed provisions of a filed policy
			 form, including exclusions from coverage, exceptions not insured against and
			 stipulations and conditions will not be deemed special exceptions.
			 (3-31-22)
03.
Liens and
			 Encumbrances, Standards of Insurability and Insuring Around
. The
			 determination of insurability as to liens and encumbrances under Sections
			 41-2708(1)  and
			 the risk disallowed under
			 41-2708 (2), Idaho Code,
			 intentionally omitting an outstanding enforceable recorded lien or encumbrance,
			 are interpreted by the insurance director to mean: (3-31-22)
a. "Intentionally" omitting an outstanding
			 enforceable recorded lien or encumbrance is the issuance of the policy with the
			 intent to conceal information from any person by suppressing or withholding
			 title information, the consequence of which could result in a monetary loss
			 either to the title insurance company or to the insured under the policy or
			 binder. (3-31-22)
b. "Outstanding
			 enforceable recorded lien or encumbrance" and/or "determination of
			 insurability" as to possible liens and encumbrances will not be construed as
			 preventing an insurer from issuing a policy without taking exception to a
			 specific recorded, inchoate, or death tax item when sound underwriting
			 standards and practices allow insurance against the item. Defects of title are
			 not regulated by this provision. Specifically, a policy may be issued without
			 taking exception to the following items on the conditions set out: (3-31-22)
i. Where a lien securing an obligation,
			 though not released of record, to the satisfaction of the insurer has been
			 discharged and the insurer or its agent has documentary evidence in its file
			 that the obligation has been paid in full. (3-31-22)
ii. Where funds are in escrow to pay said
			 item and a recordable release in form for filing is available for recording in
			 the ordinary course of business. (3-31-22)
iii. Where liens, in the opinion of counsel,
			 are barred by the statute of limitations. (3-31-22)
iv. Where inchoate liens may arise from
			 improvements to the described property and may have priority over a mortgage
			 being insured and a sufficient indemnity defined has been delivered to and
			 accepted by the insurer, or sufficient funds, including short term treasury
			 bills and notes, have been deposited with the insurer or its agent to assure
			 ultimate payment and release of such liens; provided, an exception as to such
			 inchoate liens will be shown on the policy with a provision insuring against
			 enforcement. Sufficient indemnity as used herein will mean a direct obligation
			 to pay such liens in an amount judged adequate by the insurer executed by a
			 financial institution regulated by the state or federal government or executed
			 by a responsible person as hereinafter defined. This subsection will also apply
			 to recorded liens being contested if the indemnity is one hundred and fifty
			 percent (150%) of the claim and is by such financial institution or in said
			 funds. (3-31-22)
v. Where the
			 insurer has previously issued a policy without taking exception to the specific
			 item and is called upon to issue an additional policy where it is already
			 obligated under such prior policy and where the new policy will not increase
			 its liability or exposure; provided, an exception as to such item will be shown
			 on the policy with a provision insuring against the enforcement thereof.
			 (3-31-22)
vi. When the mortgage
			 policy issued insures validity and priority of a lien, the insurer need not
			 itemize liens which are subordinate to the lien insured, whether by express
			 subordination or operation of law, unless such subordinated matters are shown
			 to comply with a policy provision, or unless requested by the insured to do so;
			 provided, when issuing a preliminary report, commitment or a binder for a
			 mortgagee's policy all subordinate liens will be shown but a statement may be
			 made that they are subordinate. (3-31-22)
vii. With reference to federal estate taxes
			 and state inheritance taxes which have not been paid, where the insurer has
			 examined a balance sheet of the estate and determined more than adequate funds
			 are on hand to pay such taxes, and the insurer has taken an indemnity from a
			 responsible person protecting itself against such unpaid taxes, or where
			 sufficient moneys or other securities to pay such taxes have been placed in
			 escrow pending the payment thereof or pending receipt of waiver of lien from
			 the taxing authority. (3-31-22)
viii. "Responsible person" is one (1), or
			 more than one (1) if they are jointly and severally liable, each of whose
			 current verified balance sheet upon examination is determined by the insurer to
			 be sufficient for the purpose of the indemnity given. Verified copies of all
			 statements will be retained by the insurer or its agent.
			 (3-31-22)