Effective – 28 Aug 2016, 2 histories
381.058. License required for insurer to transact business of title insurance, exclusive to other types of insurance business, limitations — closing or settlement protection authorized. — 1. No insurer that transacts any class, type, or kind of business other than title insurance shall be eligible for the issuance or renewal of a license to transact the business of title insurance in this state nor shall title insurance be transacted, underwritten, or issued by any insurer transacting or licensed to transact any other class, type, or kind of business.
2. A title insurer shall not engage in the business of guaranteeing payment of the principal or the interest of bonds or mortgages.
3. (1) Notwithstanding subsection 1 of this section or anything else to the contrary in sections 381.011 to 381.405, a title insurer is expressly authorized to issue closing or settlement protection letters (and to collect a fee for such issuance) in all transactions where its title insurance policies are issued and where its issuing agent or agency is performing settlement services and shall do so in favor of the applicable buyer, lender, or seller in all residential real estate transactions. Such closing or settlement protection letter form shall be filed with the director under section 381.085 and shall conform to the terms of coverage and form of instrument as required by rule of the director and shall indemnify a buyer, lender, or seller solely against losses not to exceed the amount of the settlement funds only because of the following acts of the title insurer’s named issuing title agency or title agent:
(a) Acts of theft of settlement funds or fraud with regard to settlement funds; and
(b) Failure to comply with written closing instructions by the proposed insured when agreed to by the title agency or title agent relating to title insurance coverage.
(2) The rate for issuance of a closing or settlement protection letter in a residential real estate transaction indemnifying a lessee or purchaser of an interest in land, a borrower, or a lender secured by a mortgage, including any other security instrument, of an interest in land shall be filed as a rate with the director.
(3) The rate for issuance of a closing or settlement protection letter in a residential real estate transaction indemnifying a seller of an interest in land shall be filed as a separate rate with the director.
(4) Such filed rate shall not be excessive or inadequate. The entire rate for the closing or settlement protection letter shall be retained by the title insurer.
(5) Except as provided under this section or section 381.403, a title insurer shall not provide any other coverage which purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services.
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(L. 2000 S.B. 894, A.L. 2007 S.B. 66, A.L. 2016 S.B. 833)