Bill Text: IL HB2702 | 2017-2018 | 100th General Assembly | Engrossed


Bill Title: Amends the Podiatric Medical Practice Act of 1987. Makes a technical change in a Section concerning the short title.

Spectrum: Moderate Partisan Bill (Democrat 13-3)

Status: (Engrossed) 2017-05-30 - Senate Floor Amendment No. 1 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee; 006-000-000 [HB2702 Detail]

Download: Illinois-2017-HB2702-Engrossed.html



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1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Title Insurance Act is amended by changing
5Section 3 and by adding Section 17.1 as follows:
6 (215 ILCS 155/3) (from Ch. 73, par. 1403)
7 Sec. 3. As used in this Act, the words and phrases
8following shall have the following meanings unless the context
9requires otherwise:
10 (1) "Title insurance business" or "business of title
11insurance" means:
12 (A) Issuing as insurer or offering to issue as insurer
13 title insurance; and
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;
18 (i) soliciting or negotiating the issuance of
19 title insurance;
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;
3 (iii) handling of escrows, settlements, or
4 closings;
5 (iv) executing title insurance policies;
6 (v) effecting contracts of reinsurance;
7 (vi) abstracting, searching, or examining titles;
8 or
9 (vii) issuing insured closing letters or closing
10 protection letters;
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
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
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".
25 (1.5) "Title insurance" means insuring, guaranteeing,
26warranting, or indemnifying owners of real or personal property

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1or the holders of liens or encumbrances thereon or others
2interested therein against loss or damage suffered by reason of
3liens, encumbrances upon, defects in, or the unmarketability of
4the title to the property; the invalidity or unenforceability
5of any liens or encumbrances thereon; or doing any business in
6substance equivalent to any of the foregoing. "Warranting" for
7purpose of this provision shall not include any warranty
8contained in instruments of encumbrance or conveyance. Title
9insurance is a single line form of insurance, also known as
10monoline. An attorney's opinion of title pursuant to paragraph
11(1)(C) is not intended to be within the definition of "title
12insurance".
13 (2) "Title insurance company" means any domestic company
14organized under the laws of this State for the purpose of
15conducting the business of title insurance and any title
16insurance company organized under the laws of another State,
17the District of Columbia or foreign government and authorized
18to transact the business of title insurance in this State.
19 (3) "Title insurance agent" means a person, firm,
20partnership, association, corporation or other legal entity
21registered by a title insurance company and authorized by such
22company to determine insurability of title in accordance with
23generally acceptable underwriting rules and standards in
24reliance on either the public records or a search package
25prepared from a title plant, or both, and authorized by such
26title insurance company in addition to do any of the following:

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1act as an escrow agent pursuant to subsections (f), (g), and
2(h) of Section 16 of this Act, solicit title insurance, collect
3premiums, or issue title insurance commitments, policies, and
4endorsements of the title insurance company; provided,
5however, the term "title insurance agent" shall not include
6officers and salaried employees of any title insurance company.
7 (4) "Producer of title business" is any person, firm,
8partnership, association, corporation or other legal entity
9engaged in this State in the trade, business, occupation or
10profession 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
13natural persons or other legal entities that buy or sell
14interests in real property or that lend money with such
15interests as security.
16 (5) "Associate" is any firm, association, partnership,
17corporation or other legal entity organized for profit in which
18a producer of title business is a director, officer, or partner
19thereof, or owner of a financial interest, as defined herein,
20in such entity; any legal entity that controls, is controlled
21by, or is under common control with a producer of title
22business; and any natural person or legal entity with whom a
23producer of title business has any agreement, arrangement, or
24understanding or pursues any course of conduct the purpose of
25which is to evade the provisions of this Act.
26 (6) "Financial interest" is any ownership interest, legal

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1or beneficial, except ownership of publicly traded stock.
2 (7) "Refer" means to place or cause to be placed, or to
3exercise any power or influence over the placing of title
4business, whether or not the consent or approval of any other
5person is sought or obtained with respect to the referral.
6 (8) "Escrow Agent" means any title insurance company or any
7title insurance agent, including independent contractors of
8either, acting on behalf of a title insurance company, which
9receives deposits, in trust, of funds or documents, or both,
10for the purpose of effecting the sale, transfer, encumbrance or
11lease of real property to be held by such escrow agent until
12title to the real property that is the subject of the escrow is
13in a prescribed condition. An escrow agent conducting closings
14shall be subject to the provisions of paragraphs (1) through
15(4) of subsection (e) of Section 16 of this Act.
16 (9) "Independent Escrowee" means any firm, person,
17partnership, association, corporation or other legal entity,
18other than a title insurance company or a title insurance
19agent, which receives deposits, in trust, of funds or
20documents, or both, for the purpose of effecting the sale,
21transfer, encumbrance or lease of real property to be held by
22such escrowee until title to the real property that is the
23subject of the escrow is in a prescribed condition. Federal and
24State chartered banks, savings and loan associations, credit
25unions, mortgage bankers, banks or trust companies authorized
26to do business under the Illinois Corporate Fiduciary Act,

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1licensees under the Consumer Installment Loan Act, real estate
2brokers licensed pursuant to the Real Estate License Act of
32000, as such Acts are now or hereafter amended, and licensed
4attorneys when engaged in the attorney-client relationship are
5exempt from the escrow provisions of this Act. "Independent
6Escrowee" does not include employees or independent
7contractors of a title insurance company or title insurance
8agent authorized by a title insurance company to perform
9closing, escrow, or settlement services.
10 (10) "Single risk" means the insured amount of any title
11insurance policy, except that where 2 or more title insurance
12policies are issued simultaneously covering different estates
13in the same real property, "single risk" means the sum of the
14insured amounts of all such title insurance policies. Any title
15insurance policy insuring a mortgage interest, a claim payment
16under which reduces the insured amount of a fee or leasehold
17title insurance policy, shall be excluded in computing the
18amount of a single risk to the extent that the insured amount
19of the mortgage title insurance policy does not exceed the
20insured amount of the fee or leasehold title insurance policy.
21 (11) "Department" means the Department of Financial and
22Professional Regulation.
23 (12) "Secretary" means the Secretary of Financial and
24Professional Regulation.
25 (13) "Insured closing letter" or "closing protection
26letter" means an indemnification or undertaking to a party to a

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1real property transaction, from a principal such as a title
2insurance company, setting forth in writing the extent of the
3principal's responsibility for intentional misconduct or
4errors in closing the real property transaction on the part of
5a settlement agent, such as a title insurance agent or other
6settlement service provider, or a similar undertaking given by
7a title insurance company or an independent escrowee to a party
8to a real property transaction which indemnifies the party
9against the intentional misconduct or errors in closing the
10real property transaction on the part of the title insurance
11company or independent escrowee and includes protection
12afforded pursuant to subsections (f), (g), and (h) of Section
1316, and Section 16.1, and Section 17.1 of this Act even if such
14protection is afforded by contract.
15 (14) "Residential real property" means a building or
16buildings consisting of one to 4 residential units or a
17residential condominium unit where at least one of the
18residential units or condominium units is occupied or intended
19to be occupied as a residence by the purchaser or borrower, or
20in the event that the purchaser or borrower is the trustee of a
21trust, by a beneficiary of that trust.
22 (15) "Financial institution" means any bank subject to the
23Illinois Banking Act, any savings and loan association subject
24to the Illinois Savings and Loan Act of 1985, any savings bank
25subject to the Savings Bank Act, any credit union subject to
26the Illinois Credit Union Act, and any federally chartered

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1commercial bank, savings and loan association, savings bank, or
2credit union organized and operated in this State pursuant to
3the laws of the United States.
4(Source: P.A. 98-387, eff. 8-16-13.)
5 (215 ILCS 155/17.1 new)
6 Sec. 17.1. Independent escrowee prohibitions;
7indemnification under a closing protection letter.
8 (a) Notwithstanding the provisions of item (iii) of
9paragraph (B) of subsection (1) and subsection (9) of Section 3
10of this Act, an independent escrowee is not authorized to act
11pursuant to subsection (9) of Section 3 of this Act in a
12nonresidential real property transaction where the amount of
13settlement funds on deposit with the escrow agent is less than
14$2,000,000 or in a residential real property transaction
15unless, as part of the same transaction, closing protection
16letters protecting the buyer's or borrower's, lender's, and
17seller's interests have been issued by the independent
18escrowee.
19 (b) Unless otherwise agreed to between an independent
20escrowee and a protected person or entity, a closing protection
21letter under this Section shall indemnify all parties to a real
22property transaction against actual loss, not to exceed the
23amount of the settlement funds deposited with the independent
24escrowee. The closing protection letter shall in any event
25indemnify all parties to a real property transaction when such

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1losses arise out of:
2 (1) failure of the independent escrowee to comply with
3 written closing instructions to the extent that they relate
4 to (A) the status of the title to an interest in land or
5 the validity, enforceability, and priority of the lien of a
6 mortgage on an interest in land, including the obtaining of
7 documents and the disbursement of funds necessary to
8 establish the status of title or lien or (B) the obtaining
9 of any other document specifically required by a party to
10 the real property transaction, but only to the extent that
11 the failure to obtain such other document affects the
12 status of the title to an interest in land or the validity,
13 enforceability, and priority of the lien of a mortgage on
14 an interest in land; or
15 (2) fraud, dishonesty, or negligence of the
16 independent escrowee in handling funds or documents in
17 connection with closings to the extent that the fraud,
18 dishonesty, or negligence relates to the status of the
19 title to the interest in land or to the validity,
20 enforceability, and priority of the lien of a mortgage on
21 an interest in land or, in the case of a seller, to the
22 extent that the fraud, dishonesty, or negligence relates to
23 funds paid to or on behalf of, or which should have been
24 paid to or on behalf of, the seller.
25 (c) The indemnification under a closing protection letter
26may include limitations on the liability of the independent

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1escrowee for any of the following:
2 (1) Failure of the independent escrowee to comply with
3 closing instructions that require title insurance
4 protection inconsistent with that set forth in the title
5 insurance commitment for the real property transaction.
6 Instructions that require the removal of specific
7 exceptions to title or compliance with the requirements
8 contained in the title insurance commitment shall not be
9 deemed to be inconsistent.
10 (2) Loss or impairment of funds in the course of
11 collection or while on deposit with a bank due to bank
12 failure, insolvency, or suspension, except such as shall
13 result from failure of the independent escrowee closer to
14 comply with written closing instructions to deposit the
15 funds in a bank that is designated by name by a party to
16 the real property transaction.
17 (3) Mechanics' and materialmen's liens in connection
18 with sale, purchase, lease, or construction loan
19 transactions, except to the extent that protection against
20 such liens is afforded by a title insurance commitment or
21 policy issued by the title insurance agent or title
22 insurance company.
23 (4) Failure of the independent escrowee to comply with
24 written closing instructions to the extent that such
25 instructions require a determination by the independent
26 escrowee of the validity, enforceability, or effectiveness

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1 of any document described in item (B) of paragraph (1) of
2 subsection (b) of this Section.
3 (5) Fraud, dishonesty, or negligence of an employee,
4 agent, attorney, or broker, who is not also the independent
5 escrowee or an independent contract closer of the
6 independent escrowee, of the indemnified party to the real
7 property transaction.
8 (6) The settlement or release of any claim by the
9 indemnified party to the real property transaction without
10 the written consent of the independent escrowee.
11 (7) Any matters created, suffered, assumed, or agreed
12 to by, or known to, the indemnified party to the real
13 property transaction without the written consent of the
14 independent escrowee.
15 The closing protection letter may also include reasonable
16additional provisions concerning the dollar amount of
17protection, provided the limit is no less than the amount
18deposited with the independent escrowee, arbitration,
19subrogation, claim notices, and other conditions and
20limitations that do not materially impair the protection
21required by this Section.
22 (d) Notwithstanding any provision of this Act to the
23contrary, an independent escrowee that issues a closing
24protection letter pursuant to this Section shall, in addition
25to the deposits required by Section 4 of this Act, file with
26and have approved by the Secretary proof of a fidelity bond in

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1the minimum amount of $2,000,000.
2 (e) The Secretary shall adopt and amend rules as may be
3required for the proper administration and enforcement of this
4Section consistent with the federal Real Estate Settlement
5Procedures Act and Section 24 of this Act.
6 Section 99. Effective date. This Act takes effect upon
7becoming law.
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