License Requirements

“Promoting a healthy economy and strong communities” BULLETIN B 03-13 TO: ALL TITLE INSURERS AND TITLE INSURANCE LIMITED PRODUCERS AUTHORIZED TO TRANSACT TITLE INSURANCE IN THE STATE OF ALASKA AND OTHER INTERESTED PARTIES RE: LICENSE REQUIREMENTS Under Alaska Statute (AS) 21.66.270, title insurance limited producers are to be “licensed in the manner provided for in AS 21.27.” The definition of a “title insurance limited producer” is “a person, firm, association, trust, corporation, cooperative, joint-stock company, or other legal entity authorized in writing by a title insurance company to solicit title insurance, collect premiums, determine insurability in accordance with the underwriting rules and standards prescribed by the title insurance company that the licensee represents, and issue policies in its behalf; however, the term “title insurance limited producer” does not include officers and salaried employees of the title insurance company.” AS 21.66.480(8) Recently, the division has received inquiries seeking clarification as to which employees of a title insurance agency must obtain a title insurance limited producer license to operate in compliance with Alaska laws. To assist you in determining which employees of a title insurance agency need to be licensed as a title insurance limited producer, we have developed lists of standard functions that may occur within an agency, indicating which functions require licensure. These lists are for informational purposes only and are not intended to be exhaustive lists of functions that may be performed within an agency. Functions performed by a person that DO NOT require a license: ♦ Coordinate escrow closing activities with sellers, buyers, real estate agents or brokers, lenders, builders, lien holders, or other interested parties ♦ Interpret and prepare or order documents for an escrow closing from information in an earnest money agreement or other documents provided by the parties involved in the transaction ♦ Compile data, including obtaining payoffs of existing mortgages, taxes due, liens, or other balances due to be paid through the closing process; complete a HUD settlement statement for an escrow closing ♦ Obtain a recordable release of any encumbrance necessary to clear the title by coordination with the lien holder and the property owner before the escrow closing ♦ Prepare or order the documents necessary to close a real estate transaction, to transfer the title to the property, or to prioritize liens against the property ♦ Complete an escrow closing by presenting the documents to the necessary parties for signature and notarization when required ♦ Prepare package of appropriate and correctly sequenced documents for recording ♦ Return recorded documents to mortgage holders or other parties as appropriate ♦ Ensure that payment of all appropriate items, such as deeds of trust and other liens, is completed concurrent with or immediately following the recording of the transaction ♦ Forward proof of satisfaction of liens against the property to the people who remove those exceptions from an updated preliminary commitment or the title insurance policy ♦ Clerical proofreading of a preliminary commitment for completeness and accuracy Functions performed by a person that DO require a license: ♦ Determine what items affect a parcel of land, such as liens, assessments, easements, etc. ♦ Execute or issue an insurance policy on behalf of the underwriter or the firm ♦ Transact insurance business; see definition at AS 21.90.900(41) ♦ Review information and construct an abstract of title or a preliminary commitment ♦ Determine which liens or encumbrances in any record that may affect a clear title ♦ Make recommendations to underwriters or communicate or correspond with an insured or the insurance company regarding a title policy ♦ Determine insurability in accordance with insurer’s rules and standards ♦ Collect premiums on behalf of the title insurer ♦ Participate in the determination of risks ♦ Solicit or sell title insurance; see definition at AS 21.90.900(41) ♦ Solicit or make a change to a title insurance policy or order, such as changing a lenders policy to a combined lenders and owners policy ♦ Provide information or explain terms and conditions of a title insurance policy to sellers, buyers, real estate agents or brokers, lenders, builders, lien holders, or other interested parties ♦ Review a preliminary commitment, as defined in 3 AAC 27.399(4), with the buyer or policyholder and explains its terms, limitations, exclusions, or other items Please review Alaska’s insurance code, particularly the laws pertaining to licensing and title insurance, to ensure your compliance when transacting Alaska insurance business. We encourage you to evaluate the duties and responsibilities of each employee of your title insurance agency to determine whether licensure is required for each of these individuals. This bulletin supersedes Bulletin B 97-10, which is now revoked and no longer in effect. Dated this 31st day of December, 2003 at Anchorage, Alaska. Linda S. Hall Director