HB1545 EnrolledLRB098 04054 RPM 34075 b

1    AN ACT concerning insurance.
 
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
5Sections 16 and 21 as follows:
 
6    (215 ILCS 155/16)  (from Ch. 73, par. 1416)
7    Sec. 16. Title insurance agents.
8    (a) No person, firm, partnership, association, corporation
9or other legal entity shall act as or hold itself out to be a
10title insurance agent unless duly registered by a title
11insurance company with the Secretary.
12    (b) Each application for registration shall be made on a
13form specified by the Secretary and prepared in duplicate by
14each title insurance company which the agent represents. The
15title insurance company shall retain the copy of the
16application and forward the original to the Secretary with the
17appropriate fee.
18    (c) Every applicant for registration, except a firm,
19partnership, association, limited liability company, or
20corporation, must be 18 years or more of age. Included in every
21application for registration of a title insurance agent,
22including a firm, partnership, association, limited liability
23company, or corporation, shall be an affidavit of the applicant

 

 

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1title insurance agent, signed and notarized in front of a
2notary public, affirming that the applicant and every owner,
3officer, director, principal, member, or manager of the
4applicant has never been convicted or pled guilty to any felony
5or misdemeanor involving a crime of theft or dishonesty. No
6person who has had a conviction or pled guilty to any felony or
7misdemeanor involving theft or dishonesty may be registered by
8a title insurance company without a separate written
9notification to the Secretary disclosing the conviction or
10plea, and no such person may serve as an owner, officer,
11director, principal, or manager of any registered title
12insurance agent without the written permission of the
13Secretary.
14    (d) Registration shall be made annually by a filing with
15the Secretary; supplemental registrations for new title
16insurance agents to be added between annual filings shall be
17made from time to time in the manner provided by the Secretary;
18registrations shall remain in effect unless revoked or
19suspended by the Secretary or voluntarily withdrawn by the
20registrant or the title insurance company.
21    (e) Funds deposited in connection with any escrows,
22settlements, or closings shall be deposited in a separate
23fiduciary trust account or accounts in a bank or other
24financial institution insured by an agency of the federal
25government unless the instructions provide otherwise. The
26funds shall be the property of the person or persons entitled

 

 

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1thereto under the provisions of the escrow, settlement, or
2closing and shall be segregated by escrow, settlement, or
3closing in the records of the escrow agent. The funds shall not
4be subject to any debts of the escrowee and shall be used only
5in accordance with the terms of the individual escrow,
6settlement, or closing under which the funds were accepted.
7    Interest received on funds deposited with the escrow agent
8in connection with any escrow, settlement, or closing shall be
9paid to the depositing party unless the instructions provide
10otherwise.
11    The escrow agent shall maintain separate records of all
12receipts and disbursements of escrow, settlement, or closing
13funds.
14    The escrow agent shall comply with any rules adopted by the
15Secretary pertaining to escrow, settlement, or closing
16transactions.
17    (f) A title insurance agent shall not act as an escrow
18agent in a nonresidential real property transaction where the
19amount of settlement funds on deposit with the escrow agent is
20less than $2,000,000 or in a residential real property
21transaction unless the title insurance agent, title insurance
22company, or another authorized title insurance agent has
23committed for the issuance of title insurance in that
24transaction and the title insurance agent is authorized to act
25as an escrow agent on behalf of the title insurance company for
26which the commitment for title insurance has been issued. The

 

 

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1authorization under the preceding sentence shall be given
2either (1) by an agency contract with the title insurance
3company which contract, in compliance with the requirements set
4forth in subsection (g) of this Section, authorizes the title
5insurance agent to act as an escrow agent on behalf of the
6title insurance company or (2) by a closing protection letter
7in compliance with the requirements set forth in Section 16.1
8of this Act, issued by the title insurance company to the
9seller, buyer, borrower, and lender. A closing protection
10letter shall not be issued by a title insurance agent. The
11provisions of this subsection (f) shall not apply to the
12authority of a title insurance agent to act as an escrow agent
13under subsection (g) of Section 17 of this Act.
14    (g) If an agency contract between the title insurance
15company and the title insurance agent is the source of the
16authority under subsection (f) of this Section for a title
17insurance agent to act as escrow agent for a real property
18transaction, then the agency contract shall provide for no less
19protection from the title insurance company to all parties to
20the real property transaction than the title insurance company
21would have provided to those parties had the title insurance
22company issued a closing protection letter in conformity with
23Section 16.1 of this Act.
24    (h) A title insurance company shall be liable for the acts
25or omissions of its title insurance agent as an escrow agent if
26the title insurance company has authorized the title insurance

 

 

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1agent under subsections (f) and (g) of this Section 16 and only
2to the extent of the liability undertaken by the title
3insurance company in the agency agreement or closing protection
4letter. The liability, if any, of the title insurance agent to
5the title insurance company for acts and omissions of the title
6insurance agent as an escrow agent shall not be limited or
7otherwise modified because the title insurance company has
8provided closing protection to a party or parties to a real
9property transaction escrow, settlement, or closing. The
10escrow agent shall not charge a fee for protection provided by
11a title insurance company to parties to real property
12transactions under subsections (f) and (g) of this Section 16
13and Section 16.1, but shall collect from the parties the fee
14charged by the title insurance company and shall promptly remit
15the fee to the title insurance company. The title insurance
16company may charge the parties a reasonable fee for protection
17provided pursuant to subsections (f) and (g) of this Section 16
18and Section 16.1 and shall not pay any portion of the fee to
19the escrow agent. The payment of any portion of the fee to the
20escrow agent by the title insurance company, shall be deemed a
21prohibited inducement or compensation in violation of Section
2224 of this Act.
23    (i) The Secretary shall adopt and amend such rules as may
24be required for the proper administration and enforcement of
25this Section 16 consistent with the federal Real Estate
26Settlement Procedures Act and Section 24 of this Act.

 

 

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1(Source: P.A. 96-1454, eff. 1-1-11.)
 
2    (215 ILCS 155/21)  (from Ch. 73, par. 1421)
3    Sec. 21. Regulatory action.
4    (a) The Secretary may refuse to grant, and may suspend or
5revoke, any certificate of authority, registration, or license
6issued pursuant to this Act or may impose a fine for a
7violation of this Act if he determines that the holder of or
8applicant for such certificate, registration or license:
9        (1) has intentionally made a material misstatement or
10    fraudulent misrepresentation in relation to a matter
11    covered by this Act;
12        (2) has misappropriated or tortiously converted to its
13    own use, or illegally withheld, monies held in a fiduciary
14    capacity;
15        (3) has demonstrated untrustworthiness or incompetency
16    in transacting the business of guaranteeing titles to real
17    estate in such a manner as to endanger the public;
18        (4) has materially misrepresented the terms or
19    conditions of contracts or agreements to which it is a
20    party;
21        (5) has paid any commissions, discounts or any part of
22    its premiums, fees or other charges to any person in
23    violation of any State or federal law or regulations or
24    opinion letters issued under the federal Real Estate
25    Settlement Procedures Act of 1974; or

 

 

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1        (6) has failed to comply with the deposit and reserve
2    requirements of this Act or any other requirements of this
3    Act; .
4        (7) has committed fraud or misrepresentation in
5    applying for or procuring any certificate of authority,
6    registration, or license issued pursuant to this Act;
7        (8) has a conviction or plea of guilty or plea of nolo
8    contendere in this State or any other jurisdiction to (i)
9    any felony or (ii) a misdemeanor, an essential element of
10    which is dishonesty or fraud or larceny, embezzlement, or
11    obtaining money, property, or credit by false pretenses or
12    by means of a confidence game;
13        (9) has been disciplined by another state, the District
14    of Columbia, a territory, foreign nation, a governmental
15    agency, or any entity authorized to impose discipline if at
16    least one of the grounds for that discipline is the same as
17    or equivalent to one of the grounds for which a title
18    insurance company, title insurance agent, or independent
19    escrowee may be disciplined under this Act or if at least
20    one of the grounds for that discipline involves dishonesty;
21    a certified copy of the record of the action by the other
22    state or jurisdiction shall be prima facie evidence
23    thereof;
24        (10) has advertising that is inaccurate, misleading,
25    or contrary to the provisions of this Act;
26        (11) has knowingly and willfully made any substantial

 

 

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1    misrepresentation or untruthful advertising;
2        (12) has made any false promises of a character likely
3    to influence, persuade, or induce;
4        (13) has knowingly failed to account for or remit any
5    money or documents coming into the possession of a title
6    insurance company, title insurance agent, or independent
7    escrowee that belong to others;
8        (14) has engaged in dishonorable, unethical, or
9    unprofessional conduct of a character likely to deceive,
10    defraud, or harm the public;
11        (15) has violated the terms of a disciplinary order
12    issued by the Department;
13        (16) has disregarded or violated any provision of this
14    Act or the published rules adopted by the Department to
15    enforce this Act or has aided or abetted any individual,
16    partnership, registered limited liability partnership,
17    limited liability company, or corporation in disregarding
18    any provision of this Act or the published rules; or
19        (17) has acted as a title insurance company, title
20    insurance agent, or independent escrowee without a
21    certificate of authority, registration, or license after
22    the title insurance company, title insurance agent, or
23    independent escrowee's certificate of authority,
24    registration, or license was inoperative.
25    (b) In every case where a registration or certificate is
26suspended or revoked, or an application for a registration or

 

 

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1certificate or renewal thereof is refused, the Secretary shall
2serve notice of his action, including a statement of the
3reasons for his action, as provided by this Act. When a notice
4of suspension or revocation of a certificate of authority is
5given to a title insurance company, the Secretary shall also
6notify all the registered agents of that title insurance
7company of the Secretary's action.
8    (c) In the case of a refusal to issue or renew a
9certificate or accept a registration, the applicant or
10registrant may request in writing, within 30 days after the
11date of service, a hearing. In the case of a refusal to renew,
12the expiring registration or certificate shall be deemed to
13continue in force until 30 days after the service of the notice
14of refusal to renew, or if a hearing is requested during that
15period, until a final order is entered pursuant to such
16hearing.
17    (d) The suspension or revocation of a registration or
18certificate shall take effect upon service of notice thereof.
19The holder of any such suspended registration or certificate
20may request in writing, within 30 days of such service, a
21hearing.
22    (e) In cases of suspension or revocation of registration
23pursuant to subsection (a), the Secretary may, in the public
24interest, issue an order of suspension or revocation which
25shall take effect upon service of notification thereof. Such
26order shall become final 60 days from the date of service

 

 

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1unless the registrant requests in writing, within such 60 days,
2a formal hearing thereon. In the event a hearing is requested,
3the order shall remain temporary until a final order is entered
4pursuant to such hearing.
5    (f) Hearing shall be held at such time and place as may be
6designated by the Secretary either in the City of Springfield,
7the City of Chicago, or in the county in which the principal
8business office of the affected registrant or certificate
9holder is located.
10    (g) The suspension or revocation of a registration or
11certificate or the refusal to issue or renew a registration or
12certificate shall not in any way limit or terminate the
13responsibilities of any registrant or certificate holder
14arising under any policy or contract of title insurance to
15which it is a party. No new contract or policy of title
16insurance may be issued, nor may any existing policy or
17contract to title insurance be renewed by any registrant or
18certificate holder during any period of suspension or
19revocation of a registration or certificate.
20    (h) The Secretary may issue a cease and desist order to a
21title insurance company, agent, or other entity doing business
22without the required license or registration, when in the
23opinion of the Secretary, the company, agent, or other entity
24is violating or is about to violate any provision of this Act
25or any law or of any rule or condition imposed in writing by
26the Department.

 

 

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1    The Secretary may issue the cease and desist order without
2notice and before a hearing.
3    The Secretary shall have the authority to prescribe rules
4for the administration of this Section.
5    If it is determined that the Secretary had the authority to
6issue the cease and desist order, he may issue such orders as
7may be reasonably necessary to correct, eliminate or remedy
8such conduct.
9    Any person or company subject to an order pursuant to this
10Section is entitled to judicial review of the order in
11accordance with the provisions of the Administrative Review
12Law.
13    The powers vested in the Secretary by this Section are
14additional to any and all other powers and remedies vested in
15the Secretary by law, and nothing in this Section shall be
16construed as requiring that the Secretary shall employ the
17powers conferred in this Section instead of or as a condition
18precedent to the exercise of any other power or remedy vested
19in the Secretary.
20(Source: P.A. 94-893, eff. 6-20-06.)
 
21    Section 99. Effective date. This Act takes effect January
221, 2014.