Deadlines for Filing Title Insurance Rates and Forms and Closing Protection Letter Fees Under New Indiana Laws

June 7, 2013 Bulletin 199 DEADLINES FOR FILING TITLE INSURANCE RATES AND FORMS AND CLOSING PROTECTION LETTER FEES UNDER NEW INDIANA LAWS This Bulletin is directed to all companies issuing policies oftitle insurance, as defined at IC 27-7­ 3-2(a), in Indiana, and to all persons selling, soliciting, or negotiating title insurance in Indiana. The purpose ofthis Bulletin is to clarify the deadlines for filing different items under new Indiana Jaw. This year, Jndiana's legislature passed a new Jaw, SEA 370 (P.L. 80-2013), that requires title insurance policies and rates to be filed with the Indiana Department oflnsmance. Additionally, the new Jaw requires closing protection letters (CPLs) to be provided in certain situations, and documentation showing the amount ofthe fee for CPLs must be submitted to and approved by the Depa1tment. The new Jaws become effective on July 1, 2013; however, ce1tain provisions ofthe law are only applicable to title insurance policies issued after June 30, 2014. Currently, most property & casualty forms and rates must be filed in Indiana before they are used; however, the Depmtment does not have to approve the forms or rates before use. This system is commonly referred to as "File and Use." Section 1 of SEA 370 becomes effective July 1, 2013, and incorporates title insurance into the current filing practice. Therefore, as of July 1, 2013, no title insumnce policy may be issued in Indiana unless it has been filed with the Department. Section 2 of SEA 3 70 applies to policies issued after June 30, 2014, and requires title insurance policy fonns and rates to be filed at least thirty days before the proposed effective date ofthe filing. Furthe1more, under Section 2, the Commissioner must approve the filing before it may be used ("File and Approve"). Thus. policies intended for use as of July 1, 2014, or after must be filed with the Department on or before June 1, 2014. Section 4 of SEA 370 requires CPLs to be issued in a residential real estate transaction if(a) a title policy is issued by a title company or by a title insurance producer on behalf ofthe company, and (b) the company or title insurance producer also acts as the settlement or closing agent for the transaction. If the conditions are met, the CPL must be issued to the lender, borrower, buyer, and seller ofthe property. Furthermore, the new law requires that a fee be charged for the CPL. Section 4 is effective July 1, 2013, and requires documentation showing the amount ofthe CPL fee to be submitted to and approved by the Depaitment under IC 27-1-22-28, which is created by Section 2 of SEA 370. IC 27-1-22-28 requires approval before use, and filing 30 days before the intended use. Thirty days prior to July 1, 2013, has already passed; therefore CPL fees must be filed as soon as possible, and in any event on or before June 24, 2013. For any CPL fees filed between the date ofthis Bulletin and June 24, 2013, the Depmtment will approve a fee if it is prima facie reasonable. However, the Department will then conduct a more thorough review and may withdraw such approval. Ifthe Department withdraws approval ofa CPL fee preliminarily approved as prima facie reasonable, the issuer ofthe CPL must immediately switch to a new prima facie reasonable rate or cease closing transactions that require a CPL under the new law. In summary, the new deadlines are as foilows: Item June 1,2013 July 1,2013 June 1~2014 July 1,2014 Title Insurance Policy Form n/a File and use Filing deadJine for policies to be issued after June 30,2014 File and approve Title Insurance Policy Rates n/a File and use Filing deadline for policies to be issued after June 30,2014 File and approve Closing Protection Letters n/a Must be provided in certain situations Requirement continues Requirement continues Closing Protection Letter Fees Statutory deadline for filing Must be charged if a CPL is provided; File and approve Requirement continues Requirement continues Filing instructions can be found on the Department's web site at http://www.in.gov/idoi/2594.htm. The Depat1ment currently audits title insurance producers approximately every two years. The Department will begin auditing for compliance with these new laws immediately after July 1, 2014. Failure to comply with the new requirements could lead to regulatory action. Questions regarding this Bulletin should be directed to Dan Oliver, Director ofthe Title Insurance Division, at (317) 234-5155 and doliverl@idoi.IN.gov, or Kate Kixmiller, Deputy Commissioner of Prope11y & Casualty, at (317) 232-2395 and kkixmiller@idoi.IN.gov. Insurance Commissioner 2