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1 | | AN ACT concerning insurance.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Title Insurance Act is amended by changing |
5 | | Sections 3 and 26 as follows:
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6 | | (215 ILCS 155/3) (from Ch. 73, par. 1403)
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7 | | Sec. 3. As used in this Act, the words and phrases |
8 | | following shall
have the following meanings unless the context |
9 | | requires otherwise:
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10 | | (1) "Title insurance business" or "business of title |
11 | | insurance" means:
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12 | | (A) Issuing as insurer or offering to issue as insurer |
13 | | title insurance;
and
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14 | | (B) Transacting or proposing to transact one or more of |
15 | | the following
activities when
conducted or performed in |
16 | | contemplation of or in conjunction with the issuance
of |
17 | | title insurance;
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18 | | (i) soliciting or negotiating the issuance of |
19 | | title insurance;
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20 | | (ii) guaranteeing, warranting, or otherwise |
21 | | insuring the correctness of
title
searches for all |
22 | | instruments affecting titles to real property, any |
23 | | interest in
real property, cooperative units and |
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1 | | proprietary leases, and for all liens or
charges |
2 | | affecting the same;
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3 | | (iii) handling of escrows, settlements, or |
4 | | closings;
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5 | | (iv) executing title insurance policies;
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6 | | (v) effecting contracts of reinsurance;
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7 | | (vi) abstracting, searching, or examining titles; |
8 | | or
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9 | | (vii) issuing insured closing letters or closing |
10 | | protection letters;
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11 | | (C) Guaranteeing, warranting, or insuring searches or |
12 | | examinations of
title to real property or any interest in |
13 | | real property, with the exception of
preparing an |
14 | | attorney's opinion of title; or
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15 | | (D) Guaranteeing or warranting the status of title as |
16 | | to ownership of or
liens on real property and personal |
17 | | property by any person other than the
principals to the |
18 | | transaction; or
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19 | | (E) Doing or proposing to do any business substantially |
20 | | equivalent to any
of the activities listed in this |
21 | | subsection,
provided that the preparation of an attorney's |
22 | | opinion
of title pursuant to paragraph (1)(C) is not |
23 | | intended to be within the
definition of "title insurance |
24 | | business" or "business of title insurance".
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25 | | (1.5) "Title insurance" means insuring, guaranteeing, |
26 | | warranting, or
indemnifying owners of real or personal property |
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1 | | or the holders of liens or
encumbrances thereon or others |
2 | | interested therein against loss or damage
suffered by reason of |
3 | | liens, encumbrances upon, defects in, or the
unmarketability of |
4 | | the title to the property; the invalidity or
unenforceability |
5 | | of any liens or encumbrances thereon; or doing any business in
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6 | | substance equivalent to any of the foregoing.
"Warranting" for |
7 | | purpose of this provision shall not
include any warranty |
8 | | contained in instruments of encumbrance or conveyance.
Title |
9 | | insurance is a single line form of insurance, also known as |
10 | | monoline. An attorney's opinion of title pursuant to paragraph |
11 | | (1)(C) is not intended to
be within the definition of "title |
12 | | insurance".
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13 | | (2) "Title insurance company" means any domestic company |
14 | | organized under
the laws of this State for the purpose of |
15 | | conducting the business of
title insurance and any title |
16 | | insurance
company organized under the laws of another State, |
17 | | the District of Columbia
or foreign government and authorized |
18 | | to transact the business of
title insurance in this State.
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19 | | (3) "Title insurance agent" means a person, firm, |
20 | | partnership,
association, corporation or other legal entity |
21 | | registered by a title
insurance company and authorized by such |
22 | | company to determine insurability
of title in accordance with |
23 | | generally acceptable underwriting rules and
standards in |
24 | | reliance on either the public records or a search package
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25 | | prepared from a title plant, or both, and authorized by such |
26 | | title insurance company in addition to do any
of the following: |
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1 | | act as an escrow agent pursuant to subsections (f), (g), and |
2 | | (h) of Section 16 of this Act, solicit title insurance, collect
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3 | | premiums, or issue title insurance commitments,
policies, and |
4 | | endorsements of the title insurance company; provided, |
5 | | however, the term "title insurance agent"
shall not include |
6 | | officers and salaried employees of any title insurance
company.
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7 | | (4) "Producer of title business" is any person, firm, |
8 | | partnership,
association, corporation or other legal entity |
9 | | engaged in this State in the
trade, business, occupation or |
10 | | profession of (i) buying or selling
interests in real property, |
11 | | (ii) making loans secured by interests in real
property, or |
12 | | (iii) acting as broker, agent, attorney, or representative of
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13 | | natural persons or other legal entities that buy or sell |
14 | | interests in real
property or that lend money with such |
15 | | interests as security.
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16 | | (5) "Associate" is any firm, association, partnership, |
17 | | corporation or
other legal entity organized for profit in which |
18 | | a producer of title
business is a director, officer, or partner |
19 | | thereof, or owner of a
financial interest, as defined herein, |
20 | | in such entity; any legal entity
that controls, is controlled |
21 | | by, or is under common control with a producer
of title |
22 | | business; and any natural person or legal entity with whom a
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23 | | producer of title business has any agreement, arrangement, or |
24 | | understanding
or pursues any course of conduct the purpose of |
25 | | which is to evade the
provisions of this Act.
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26 | | (6) "Financial interest" is any ownership interest, legal |
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1 | | or beneficial,
except ownership of publicly traded stock.
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2 | | (7) "Refer" means to place or cause to be placed, or to |
3 | | exercise any
power or influence over the placing of title |
4 | | business, whether or not the
consent or approval of any other |
5 | | person is sought or obtained with respect
to the referral.
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6 | | (8) "Escrow Agent" means any title insurance company or any |
7 | | title
insurance agent, including independent contractors of |
8 | | either, acting on behalf of a title insurance company, which
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9 | | receives deposits, in trust, of funds or documents, or both, |
10 | | for the purpose
of effecting the sale, transfer, encumbrance or |
11 | | lease of real property to
be held by such escrow agent until |
12 | | title to the real property that is the
subject of the escrow is |
13 | | in a prescribed condition. An escrow agent conducting closings |
14 | | shall be subject to the provisions of paragraphs (1) through |
15 | | (4) of subsection (e) of Section 16 of this Act.
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16 | | (9) "Independent Escrowee" means any firm, person, |
17 | | partnership,
association, corporation or other
legal entity, |
18 | | other than a title insurance company or a title insurance
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19 | | agent, which receives deposits, in trust, of funds or |
20 | | documents, or both, for
the purpose of effecting the sale, |
21 | | transfer, encumbrance or lease of real
property to be held by |
22 | | such escrowee until title to the real property that
is the |
23 | | subject of the escrow is in a prescribed condition. Federal and
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24 | | State chartered banks, savings and loan associations, credit |
25 | | unions,
mortgage bankers, banks or trust companies authorized |
26 | | to do business under
the Illinois Corporate Fiduciary Act, |
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1 | | licensees under the Consumer
Installment Loan Act, real estate |
2 | | brokers licensed pursuant to the Real
Estate License Act of |
3 | | 2000, as such Acts are now or hereafter amended, and
licensed |
4 | | attorneys when engaged in the attorney-client relationship are
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5 | | exempt from the escrow provisions of this Act. "Independent |
6 | | Escrowee" does not include employees or independent |
7 | | contractors of a title insurance company or title insurance |
8 | | agent authorized by a title insurance company to perform |
9 | | closing, escrow, or settlement services.
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10 | | (10) "Single risk" means the insured amount of any title |
11 | | insurance
policy, except that where 2 or more title insurance |
12 | | policies are issued
simultaneously covering different estates |
13 | | in the same real property, "single
risk" means the sum of the |
14 | | insured amounts of all such title insurance
policies. Any title |
15 | | insurance policy insuring a mortgage interest, a claim
payment |
16 | | under which reduces the insured amount of a fee or leasehold |
17 | | title
insurance policy, shall be excluded in computing the |
18 | | amount of a single
risk to the extent that the insured amount |
19 | | of the mortgage title insurance
policy does not exceed the |
20 | | insured amount of the fee or leasehold title
insurance policy.
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21 | | (11) "Department" means the Department of Financial and |
22 | | Professional Regulation.
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23 | | (12) "Secretary" means the Secretary
of Financial and |
24 | | Professional Regulation.
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25 | | (13) "Insured closing letter" or "closing protection |
26 | | letter" means
an indemnification or undertaking to a party to a |
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1 | | real property transaction, from
a principal such as a title |
2 | | insurance company, setting forth
in writing the extent of the |
3 | | principal's responsibility for intentional
misconduct or |
4 | | errors in closing the real property transaction on the part of |
5 | | a
settlement agent, such as a title insurance agent or other |
6 | | settlement service
provider, and includes protection afforded |
7 | | pursuant to subsections (f), (g), and (h) of Section 16 and |
8 | | Section 16.1 of this Act even if such protection is afforded by |
9 | | contract.
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10 | | (14) "Residential real property" means a building or |
11 | | buildings consisting of one to 4 residential units or a |
12 | | residential condominium unit where at least one of the |
13 | | residential units or condominium units is occupied or intended |
14 | | to be occupied as a residence by the purchaser or borrower, or |
15 | | in the event that the purchaser or borrower is the trustee of a |
16 | | trust, by a beneficiary of that trust.
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17 | | (15) "Financial institution" means any bank subject to the |
18 | | Illinois Banking Act, any savings and loan association subject |
19 | | to the Illinois Savings and Loan Act of 1985, any savings bank |
20 | | subject to the Savings Bank Act, any credit union subject to |
21 | | the Illinois Credit Union Act, and any federally chartered |
22 | | commercial bank, savings and loan association, savings bank, or |
23 | | credit union organized and operated in this State pursuant to |
24 | | the laws of the United States. |
25 | | (Source: P.A. 95-570, eff. 8-31-07; 96-1454, eff. 1-1-11.)
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1 | | (215 ILCS 155/26) |
2 | | Sec. 26. Settlement funds. |
3 | | (a) A title insurance company, title insurance agent, or |
4 | | independent escrowee shall not make disbursements in |
5 | | connection with any escrows, settlements, or closings out of a |
6 | | fiduciary trust account or accounts unless the funds in the |
7 | | aggregate amount of $50,000 or greater received from any single |
8 | | party to the transaction are good funds as defined in |
9 | | paragraphs (2), (6), or (7) of subsection (c) of this Section; |
10 | | or are collected funds as defined in subsection (d) of this |
11 | | Section. |
12 | | For the purposes of this subsection (a), where funds in the |
13 | | aggregate amount of $50,000 or greater are received from any |
14 | | purchaser of residential real property, as defined in paragraph |
15 | | (14) of Section 3 of this Act, the aggregate amount may consist |
16 | | of good funds of less than $50,000 per paragraph, as defined in |
17 | | paragraphs (3) and (5) of subsection (c) of this Section and of |
18 | | up to $5,000 in good funds, as defined in paragraph (4) of |
19 | | subsection (c) of this Section. |
20 | | (a-5) In addition to the good funds disbursement |
21 | | authorization set forth in subsection (a) of this Section, a |
22 | | title insurance company, title insurance agent, or independent |
23 | | escrowee is authorized to make disbursements in connection with |
24 | | any escrows, settlements, or closings out of a fiduciary trust |
25 | | account or accounts where the funds in the aggregate amount of |
26 | | $50,000 or greater are received from any single party to the |
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1 | | transaction if: |
2 | | (1) the funds are transferred by a cashier's check, |
3 | | teller's check, or certified check, as defined in the |
4 | | Uniform Commercial Code, that is drawn on or issued by a |
5 | | financial institution, as defined in this Act; |
6 | | (2) the title insurance company, title insurance |
7 | | agent, or independent escrowee and the financial |
8 | | institution, as defined in this Act, are known to each |
9 | | other and agree to the use of cashier's checks, teller's |
10 | | checks, or certified checks as good funds under item (3) of |
11 | | subsection (c) of this Section; and |
12 | | (3) the cashier's check, teller's check, or certified |
13 | | check is delivered to the title insurance company, title |
14 | | insurance agent, or independent escrowee in sufficient |
15 | | time for the check to be deposited into the title insurance |
16 | | company's, title insurance agent's, or independent |
17 | | escrowee's fiduciary trust account prior to disbursement |
18 | | from the fiduciary trust account of the title insurance |
19 | | company, title insurance agent, or independent escrowee. |
20 | | The provisions of this subsection (a-5) are inoperative on |
21 | | and after January 1, 2015. |
22 | | (b) A title insurance company or title insurance agent |
23 | | shall not make disbursements in connection with any escrows, |
24 | | settlements, or closings out of a fiduciary trust account or |
25 | | accounts unless the funds in the amount of less than $50,000 |
26 | | received from any single party to the transaction are collected |
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1 | | funds or good funds as defined in subsection (c) of this |
2 | | Section. |
3 | | (c) "Good funds" means funds in one of the following forms: |
4 | | (1) lawful money of the United States; |
5 | | (2) wired funds unconditionally held by and credited to |
6 | | the fiduciary trust account of the title insurance company, |
7 | | the title insurance agent, or independent escrowee; |
8 | | (3) cashier's checks, certified checks, bank money
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9 | | orders, official bank checks, or teller's checks drawn on
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10 | | or issued by a financial institution chartered under the
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11 | | laws of any state or the United States and unconditionally
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12 | | held by the title insurance company, title insurance agent,
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13 | | or independent escrowee; |
14 | | (4) a personal check or checks in an aggregate amount |
15 | | not exceeding $5,000 per closing, provided that the title |
16 | | insurance company, title insurance agent, or independent |
17 | | escrowee has reasonable grounds to believe that sufficient |
18 | | funds are available for withdrawal in the account upon |
19 | | which the check is drawn at the time of disbursement; |
20 | | (5) a check drawn on the trust account of any lawyer or |
21 | | real estate broker licensed under the laws of any state, |
22 | | provided that the title insurance company, title insurance |
23 | | agent, or independent escrowee has reasonable grounds to |
24 | | believe that sufficient funds are available for withdrawal |
25 | | in the account upon which the check is drawn at the time of |
26 | | disbursement; |
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1 | | (6) a check issued by this State, the United States, or |
2 | | a political subdivision of this State or the United States; |
3 | | or |
4 | | (7) a check drawn on the fiduciary trust account of a |
5 | | title insurance company or title insurance agent, provided |
6 | | that the title insurance company, title insurance agent, or |
7 | | independent escrowee has reasonable grounds to believe |
8 | | that sufficient funds are available for withdrawal in the |
9 | | account upon which the check is drawn at the time of |
10 | | disbursement. |
11 | | (d) "Collected funds" means funds deposited, finally |
12 | | settled, and credited to the title insurance company, title |
13 | | insurance agent, or independent escrowee's fiduciary trust |
14 | | account.
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15 | | (e) A purchaser, a seller, or a lender is each considered a |
16 | | single party to the transaction for the purposes of this |
17 | | Section, regardless of the number of people or entities making |
18 | | up the purchaser, seller, or lender. |
19 | | (Source: P.A. 96-645, eff. 1-1-10; 96-1457, eff. 1-1-11.)
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