Bill Text: CT SB00277 | 2014 | General Assembly | Comm Sub
Bill Title: An Act Concerning The Issuance Of Closing Protection Letters.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2014-04-09 - Referred by Senate to Committee on Banks [SB00277 Detail]
Download: Connecticut-2014-SB00277-Comm_Sub.html
General Assembly |
Raised Bill No. 277 | ||
February Session, 2014 |
LCO No. 1477 | ||
*_____SB00277INS___032014____* | |||
Referred to Committee on INSURANCE AND REAL ESTATE |
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Introduced by: |
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(INS) |
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AN ACT CONCERNING THE ISSUANCE OF CLOSING PROTECTION LETTERS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 38a-404 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
(a) No person subject to sections 38a-400 to 38a-425, inclusive, shall engage in activities prohibited to corporations under section 38a-45, except that such persons may guarantee their obligations and the obligations of their agents and their affiliates in the normal course of business by issuing closing protection letters.
(b) A closing protection letter issued by a title insurer shall be required for any loan insurance policy issued that insures a lender's interest in a residential building containing four units or less.
(c) Nothing in this section shall prohibit a title insurer from issuing a closing protection letter for any loan insurance policy issued that insures a lender's interest in any other type of residential or commercial real property.
(d) A title insurer may impose a fee, approved by the commissioner, for the issuance of a closing protection letter.
Sec. 2. Section 38a-415 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
(a) Nothing in sections 38a-400 to 38a-425, inclusive, shall be construed as prohibiting the division of premiums and charges between or among a title insurer and its title agent, two or more title insurers and their title agents, two or more title insurers, one or more title insurers and one or more title agents, or two or more title agents, provided such division of premiums and charges does not constitute (1) an unlawful rebate or inducement under the provisions of said sections or (2) payment of a forwarding fee or finder's fee.
(b) Notwithstanding subsection (a) of this section, (1) for any title insurance policy issued after October 1, 1990, no title insurer shall pay to any title insurance agent or permit such agent to retain any amount exceeding sixty per cent of the gross premium for any policy of the title insurer issued by such agent. The maximum commission to a title insurance agent shall not be increased directly or indirectly by an insurer providing anything of value, including services, to an agent for less than the actual cost or fair market value, and (2) for any closing protection letter issued on or after October 1, 2014, for which a title insurer receives a fee pursuant to subsection (d) of section 38a-404, as amended by this act, no title insurer shall pay to any title insurance agent or permit such agent to retain any amount of such fee.
Sec. 3. Section 38a-421 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
(a) A title insurer shall file with the commissioner all forms it proposes to use in this state, including (1) title insurance policies, including standard form endorsements, [and] (2) commitments, binders or any other reports issued prior to the issuance of a title insurance policy, and (3) closing protection letters. If the commissioner finds in [his] the commissioner's review of a filing that it does not violate section 38a-422, [he] the commissioner shall approve the form within thirty days of filing. Prior to such approval, the commissioner may conduct public hearings with respect to the filing. Filings that the commissioner has failed to approve or disapprove within thirty days of filing shall be deemed approved. Upon notice to the insurer, the period for review of a form filing may be extended for an additional thirty days.
(b) A title insurer need not file reinsurance contracts and agreements.
(c) No title insurer may issue, directly or through a title agent, any policy after October 1, 1990, unless the policy form has been approved pursuant to this section. The commissioner may provide by regulation for interim use of forms in effect prior to October 1, 1990.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2014 |
38a-404 |
Sec. 2 |
October 1, 2014 |
38a-415 |
Sec. 3 |
October 1, 2014 |
38a-421 |
INS |
Joint Favorable |