First Regular Session 118th General Assembly (2013)
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SENATE ENROLLED ACT No. 370
AN ACT to amend the Indiana Code concerning insurance.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 27-1-22-2; (13)SE0370.1.1. -->
SECTION 1. IC 27-1-22-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 2. (a) This chapter
applies to all forms of casualty insurance including fidelity, surety, and
guaranty bonds, to all forms of motor vehicle insurance, to all forms of
fire, marine, and inland marine insurance,
to all forms of title
insurance, and to any and all combinations of the foregoing or parts
thereof, on risks or operations in this state, except:
(1) reinsurance, other than joint reinsurance to the extent stated
in section 14 of this chapter;
(2) accident and health insurance;
(3) insurance of vessels or craft, their cargoes, marine builders'
risks, marine protection and indemnity, or other risks commonly
insured under marine, as distinguished from inland marine,
insurance policies;
(4) insurance against loss or damage to aircraft or against liability
arising out of the ownership, maintenance, or use of aircraft;
and
(5) worker's compensation insurance.
and
(6) abstract and title insurance.
(b) Inland marine insurance includes insurance defined by statute,
or by interpretation of statute, or if not so defined or interpreted, by
ruling of the commissioner of insurance (referred to as the
commissioner), or as established by general custom of the business, as
inland marine insurance.
SOURCE: IC 27-1-22-28; (13)SE0370.1.2. -->
SECTION 2. IC 27-1-22-28 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2013]:
Sec. 28. (a) This section applies to a title policy issued
after June 30, 2014. To the extent that this section conflicts with
any other provision of this chapter, this section is controlling.
(b) The definitions in IC 27-7-3 apply throughout this section.
(c) For purposes of this section, "form", when used in reference
to a title policy:
(1) includes:
(A) a commitment for title insurance and a title policy or
guaranty; and
(B) the terms and conditions of the title insurance or title
policy or guaranty; and
(2) excludes:
(A) a reinsurance contract or agreement;
(B) an exception:
(i) that is included in a commitment or title policy; and
(ii) for specific defects in a title that may be ascertained
from an examination of a specific risk;
(C) an affirmative assurance of a company, through
endorsement or otherwise, with respect to a defect
described in clause (B); and
(D) any other exception from coverage due to:
(i) a limitation on the examination of the risk imposed by
a particular applicant for title insurance; or
(ii) failure of a particular applicant for title insurance to
provide the data necessary for determination of
insurability.
(d) A company doing business in Indiana shall, at least thirty
(30) days before the proposed effective date of the filing, file with
the commissioner all of the following that the company proposes to
use, including the proposed effective date and an indication of the
character and extent of the coverage contemplated:
(1) The form of a title policy, endorsement, manual, rating
schedule or rating plan, and other rating rule.
(2) A modification of any filing described in subdivision (1).
If the commissioner does not, within a thirty (30) day waiting
period beginning on the date of filing, disapprove a filing made
under this subsection, the filing is considered approved.
(e) If a company is a member of or a subscriber to a rating
organization that is licensed under section 8 of this chapter, the
filing requirement of subsection (d) may be satisfied by a filing
made:
(1) by the rating organization; and
(2) on behalf of all of the rating organization's members and
subscribers;
in accordance with subsection (f).
(f) A rating organization that makes a filing described in
subsection (e) shall, at least thirty (30) days before the proposed
effective date of the filing, file with the commissioner for review
and approval or disapproval all of the following that the company
proposes to use, including the proposed effective date and an
indication of the character and extent of the coverage
contemplated:
(1) The form of a title policy, endorsement, manual, rating
schedule or rating plan, and other rating rule.
(2) A modification of any filing described in subdivision (1).
(g) The commissioner shall, within a thirty (30) day waiting
period beginning on the date of filing, approve or disapprove a
filing made under subsection (f). However, the commissioner may
do the following:
(1) Upon written notice to the rating organization making the
filing within the initial thirty (30) day period, extend the
waiting period for not more than an additional thirty (30)
days to enable the commissioner to complete the review of the
filing.
(2) With the consent of the rating organization making the
filing, extend the waiting period for additional thirty (30) day
periods.
(3) Upon receiving a written request by the rating
organization making the filing, approve the filing or a part of
the filing that the commissioner has reviewed to become
effective before the expiration of a waiting period described
in subdivision (1) or (2).
(h) If the commissioner, during a waiting period described in
subsection (g), determines that a filing made by a rating
organization under this section:
(1) meets the requirements of this chapter, the commissioner
shall approve the filing and send to the rating organization
written notice of the approval; or
(2) does not meet the requirements of this chapter, the
commissioner shall disapprove the filing and send to the
rating organization written notice of the disapproval,
including the following:
(A) The notice must specify the manner in which the filing
does not meet the requirements of this chapter.
(B) The notice must specify that the filing will not become
effective.
(i) If the commissioner, at any time after approval under
subsection (d), (g), or (h), determines that the filing does not
comply with this chapter, the commissioner shall, after a hearing
held on ten (10) days written notice:
(1) sent to the person making the filing; and
(2) specifying the matters to be considered at the hearing;
issue an order specifying the manner in which the filing does not
comply with this chapter and the date on which the filing will no
longer be effective.
(j) The commissioner shall send a copy of an order issued under
subsection (i) to the person making the filing. The order does not
affect a title policy made or issued before the date specified in the
order on which the filing is no longer effective.
(k) The commissioner may not disapprove a filing described in
subsection (d) or (f) if the rates produced by the filing comply with
this chapter.
(l) A rating organization that receives notice of a hearing or a
copy of an order under subsection (i) shall promptly notify all of
the rating organization's members or subscribers that would be
affected by the hearing or order. For purposes of subsection (i),
notice to a rating organization is considered to be notice to the
rating organization's members or subscribers.
(m) If:
(1) a filing is not accompanied by the information on which
the filing is based; and
(2) the commissioner does not have sufficient information to
determine whether the filing complies with this chapter;
the commissioner shall require the person making the filing to
furnish to the commissioner the information on which the filing is
based, and the waiting period described in subsection (d) or (g)
begins on the date on which all required information is received by
the commissioner.
(n) Information furnished under subsection (m) may include the
following:
(1) The experience or judgment of the company or the rating
organization making the filing.
(2) The company's or rating organization's interpretation of
any statistical data relied on by the company or rating
organization.
(3) The experience of other title insurance companies or
rating organizations.
(4) Any other factor that the commissioner considers relevant.
(o) After approval of a filing under subsection (d), (g), or (h), the
filing and information furnished in support of the filing is a public
record for purposes of IC 5-14-3.
SOURCE: IC 27-7-3-2; (13)SE0370.1.3. -->
SECTION 3. IC 27-7-3-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 2. As used in this chapter and
unless a different meaning appears from the context:
(a) The term "title insurance" means a contract of insurance against
loss or damage on account of encumbrances upon or defects in the title
to real estate.
(b) The term "closing protection letter" means a written
indemnification of or undertaking to a party to a real estate
transaction by a principal that specifies the extent to which the
principal is responsible for intentional or unintentional misconduct
or errors of an agent of the principal in connection with the closing
of the real estate transaction.
(b) (c) The term "company" shall mean and include any corporation,
domestic or foreign, to which this chapter is applicable.
(c) (d) The term "department" shall mean the department of
insurance of the state of Indiana.
(d) (e) The term "commissioner" shall mean the insurance
commissioner.
(e) (f) The term "public record" has the meaning set forth in
IC 5-14-3-2.
(g) The term "title policy" means a policy issued by a company
that:
(1) is authorized to do business as a title insurance company
under section 3 of this chapter; and
(2) insures or indemnifies persons with an interest in real
property against loss or damage caused by a lien on, an
encumbrance on, a defect in, or the unmarketability of the
title to the real property.
(f) (h) The term "title search" means a search and examination of
the public records sufficient to determine:
(1) ownership of;
(2) encumbrances on;
(3) liens on; and
(4) defects in the title to;
the real estate that is the subject of the search.
SOURCE: IC 27-7-3-22; (13)SE0370.1.4. -->
SECTION 4. IC 27-7-3-22 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2013]:
Sec. 22. (a) In a residential real estate transaction
described in section 15.5(a) and 15.5(b) of this chapter in which:
(1) a title policy is issued by a company or title insurance
producer on behalf of a company; and
(2) the company or title insurance producer will also act as a
settlement or closing agent;
the company or title insurance producer shall issue a closing
protection letter to the lender, borrower, buyer, and seller of the
property. A company authorized to do business under section 3 of
this chapter shall charge a fee approved under subsection (e) to
each party receiving the benefit of a closing protection letter.
(b) In a nonresidential real estate transaction in which:
(1) a title policy is issued by a company or title insurance
producer on behalf of a company; and
(2) the company or title insurance producer will also act as a
settlement or closing agent;
the company or title insurance producer may issue a closing
protection letter to the lender, borrower, buyer, and seller of the
property on request.
(c) A closing protection letter issued under this section must
indemnify the party to which the closing protection letter is issued
against any loss of settlement funds (under the terms and
conditions of the closing protection letter) that results from the
following acts of the company or title insurance producer that
issues the closing protection letter:
(1) Theft or misappropriation of settlement funds in
connection with a transaction in which the title policy is
issued, only to the extent that the theft or misappropriation
relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the
mortgage on;
the party's interest in land.
(2) Failure to comply with the written closing instructions
agreed to by the company or title insurance producer acting
as the settlement agent, only to the extent that the failure
relates to the:
(A) status of title to; or
(B) validity, enforceability, and priority of the lien of the
mortgage on;
the party's interest in land.
(d) The issuance of a closing protection letter under this section
in contemplation of or in conjunction with the issuance of a title
insurance policy is part of the business of title insurance for
purposes of section 3 of this chapter.
(e) The amount of the fee that a company authorized to do
business under section 3 of this chapter charges to each party
receiving the benefits of a closing protection letter:
(1) must be submitted to and approved by the commissioner
under IC 27-1-22-28; and
(2) is not subject to an agreement requiring a division of fees
or premiums collected on behalf of the company.
SEA 370 _ Concur
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