Full Text of SB1317 101st General Assembly
SB1317eng 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Title Insurance Act is amended by changing | 5 | | Sections 3, 5, 12, 14, 14.1, 16, 18, 21, and 23 and by adding | 6 | | Section 18.2 as follows:
| 7 | | (215 ILCS 155/3) (from Ch. 73, par. 1403)
| 8 | | Sec. 3. As used in this Act, the words and phrases | 9 | | following shall
have the following meanings unless the context | 10 | | requires otherwise:
| 11 | | (1) "Title insurance business" or "business of title | 12 | | insurance" means:
| 13 | | (A) Issuing as insurer or offering to issue as insurer | 14 | | title insurance;
and
| 15 | | (B) Transacting or proposing to transact one or more of | 16 | | the following
activities when
conducted or performed in | 17 | | contemplation of or in conjunction with the issuance
of | 18 | | title insurance;
| 19 | | (i) soliciting or negotiating the issuance of | 20 | | title insurance;
| 21 | | (ii) guaranteeing, warranting, or otherwise | 22 | | insuring the correctness of
title
searches for all | 23 | | instruments affecting titles to real property, any |
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| 1 | | interest in
real property, cooperative units and | 2 | | proprietary leases, and for all liens or
charges | 3 | | affecting the same;
| 4 | | (iii) handling of escrows, settlements, or | 5 | | closings;
| 6 | | (iv) executing title insurance policies;
| 7 | | (v) effecting contracts of reinsurance;
| 8 | | (vi) abstracting, searching, or examining titles; | 9 | | or
| 10 | | (vii) issuing insured closing letters or closing | 11 | | protection letters;
| 12 | | (C) Guaranteeing, warranting, or insuring searches or | 13 | | examinations of
title to real property or any interest in | 14 | | real property, with the exception of
preparing an | 15 | | attorney's opinion of title; or
| 16 | | (D) Guaranteeing or warranting the status of title as | 17 | | to ownership of or
liens on real property and personal | 18 | | property by any person other than the
principals to the | 19 | | transaction; or
| 20 | | (E) Doing or proposing to do any business substantially | 21 | | equivalent to any
of the activities listed in this | 22 | | subsection,
provided that the preparation of an attorney's | 23 | | opinion
of title pursuant to paragraph (1)(C) is not | 24 | | intended to be within the
definition of "title insurance | 25 | | business" or "business of title insurance".
| 26 | | (1.5) "Title insurance" means insuring, guaranteeing, |
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| 1 | | warranting, or
indemnifying owners of real or personal property | 2 | | or the holders of liens or
encumbrances thereon or others | 3 | | interested therein against loss or damage
suffered by reason of | 4 | | liens, encumbrances upon, defects in, or the
unmarketability of | 5 | | the title to the property; the invalidity or
unenforceability | 6 | | of any liens or encumbrances thereon; or doing any business in
| 7 | | substance equivalent to any of the foregoing.
"Warranting" for | 8 | | purpose of this provision shall not
include any warranty | 9 | | contained in instruments of encumbrance or conveyance.
Title | 10 | | insurance is a single line form of insurance, also known as | 11 | | monoline. An attorney's opinion of title pursuant to paragraph | 12 | | (1)(C) is not intended to
be within the definition of "title | 13 | | insurance".
| 14 | | (2) "Title insurance company" means any domestic company | 15 | | organized under
the laws of this State for the purpose of | 16 | | conducting the business of
title insurance and any title | 17 | | insurance
company organized under the laws of another State, | 18 | | the District of Columbia
or foreign government and authorized | 19 | | to transact the business of
title insurance in this State.
| 20 | | (3) "Title insurance agent" means a person, firm, | 21 | | partnership,
association, corporation or other legal entity | 22 | | licensed under this Act registered by a title
insurance company | 23 | | and authorized by a title insurance such company to determine | 24 | | insurability
of title in accordance with generally acceptable | 25 | | underwriting rules and
standards in reliance on either the | 26 | | public records or a search package
prepared from a title plant, |
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| 1 | | or both, and authorized by such title insurance company in | 2 | | addition to do any
of the following: act as an escrow agent | 3 | | pursuant to subsections (f), (g), and (h) of Section 16 of this | 4 | | Act, solicit title insurance, collect
premiums, or issue title | 5 | | insurance commitments,
policies, and endorsements of the title | 6 | | insurance company; provided, however, the term "title | 7 | | insurance agent"
shall not include officers and salaried | 8 | | employees of any title insurance
company.
| 9 | | (4) "Producer of title business" is any person, firm, | 10 | | partnership,
association, corporation or other legal entity | 11 | | engaged in this State in the
trade, business, occupation or | 12 | | profession of (i) buying or selling
interests in real property, | 13 | | (ii) making loans secured by interests in real
property, or | 14 | | (iii) acting as broker, agent, attorney, or representative of
| 15 | | natural persons or other legal entities that buy or sell | 16 | | interests in real
property or that lend money with such | 17 | | interests as security.
| 18 | | (5) "Associate" is any firm, association, partnership, | 19 | | corporation or
other legal entity organized for profit in which | 20 | | a producer of title
business is a director, officer, or partner | 21 | | thereof, or owner of a
financial interest, as defined herein, | 22 | | in such entity; any legal entity
that controls, is controlled | 23 | | by, or is under common control with a producer
of title | 24 | | business; and any natural person or legal entity with whom a
| 25 | | producer of title business has any agreement, arrangement, or | 26 | | understanding
or pursues any course of conduct the purpose of |
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| 1 | | which is to evade the
provisions of this Act.
| 2 | | (6) "Financial interest" is any ownership interest, legal | 3 | | or beneficial,
except ownership of publicly traded stock.
| 4 | | (7) "Refer" means to place or cause to be placed, or to | 5 | | exercise any
power or influence over the placing of title | 6 | | business, whether or not the
consent or approval of any other | 7 | | person is sought or obtained with respect
to the referral.
| 8 | | (8) "Escrow Agent" means any title insurance company or any | 9 | | title
insurance agent, including independent contractors of | 10 | | either, acting on behalf of a title insurance company, which
| 11 | | receives deposits, in trust, of funds or documents, or both, | 12 | | for the purpose
of effecting the sale, transfer, encumbrance or | 13 | | lease of real property to
be held by such escrow agent until | 14 | | title to the real property that is the
subject of the escrow is | 15 | | in a prescribed condition. An escrow agent conducting closings | 16 | | shall be subject to the provisions of paragraphs (1) through | 17 | | (4) of subsection (e) of Section 16 of this Act.
| 18 | | (9) "Independent Escrowee" means any firm, person, | 19 | | partnership,
association, corporation or other
legal entity, | 20 | | other than a title insurance company or a title insurance
| 21 | | agent, which receives deposits, in trust, of funds or | 22 | | documents, or both, for
the purpose of effecting the sale, | 23 | | transfer, encumbrance or lease of real
property to be held by | 24 | | such escrowee until title to the real property that
is the | 25 | | subject of the escrow is in a prescribed condition. Federal and
| 26 | | State chartered banks, savings and loan associations, credit |
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| 1 | | unions,
mortgage bankers, banks or trust companies authorized | 2 | | to do business under
the Illinois Corporate Fiduciary Act, | 3 | | licensees under the Consumer
Installment Loan Act, real estate | 4 | | brokers licensed pursuant to the Real
Estate License Act of | 5 | | 2000, as such Acts are now or hereafter amended, and
licensed | 6 | | attorneys when engaged in the attorney-client relationship are
| 7 | | exempt from the escrow provisions of this Act. "Independent | 8 | | Escrowee" does not include employees or independent | 9 | | contractors of a title insurance company or title insurance | 10 | | agent authorized by a title insurance company to perform | 11 | | closing, escrow, or settlement services.
| 12 | | (10) "Single risk" means the insured amount of any title | 13 | | insurance
policy, except that where 2 or more title insurance | 14 | | policies are issued
simultaneously covering different estates | 15 | | in the same real property, "single
risk" means the sum of the | 16 | | insured amounts of all such title insurance
policies. Any title | 17 | | insurance policy insuring a mortgage interest, a claim
payment | 18 | | under which reduces the insured amount of a fee or leasehold | 19 | | title
insurance policy, shall be excluded in computing the | 20 | | amount of a single
risk to the extent that the insured amount | 21 | | of the mortgage title insurance
policy does not exceed the | 22 | | insured amount of the fee or leasehold title
insurance policy.
| 23 | | (11) "Department" means the Department of Financial and | 24 | | Professional Regulation.
| 25 | | (12) "Secretary" means the Secretary
of Financial and | 26 | | Professional Regulation.
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| 1 | | (13) "Insured closing letter" or "closing protection | 2 | | letter" means
an indemnification or undertaking to a party to a | 3 | | real property transaction, from
a principal such as a title | 4 | | insurance company, setting forth
in writing the extent of the | 5 | | principal's responsibility for intentional
misconduct or | 6 | | errors in closing the real property transaction on the part of | 7 | | a
settlement agent, such as a title insurance agent or other | 8 | | settlement service
provider, or an indemnification or | 9 | | undertaking given by a title insurance company or an | 10 | | independent escrowee setting forth in writing the extent of the | 11 | | title insurance company's or independent escrowee's | 12 | | responsibility to a party to a real property transaction which | 13 | | indemnifies the party against the intentional misconduct or | 14 | | errors in closing the real property transaction on the part of | 15 | | the title insurance company or independent escrowee and | 16 | | includes protection afforded pursuant to subsections (f), (g), | 17 | | and (h) of Section 16, Section 16.1, subsection (h) of Section | 18 | | 17, and Section 17.1 of this Act even if such protection is | 19 | | afforded by contract.
| 20 | | (14) "Residential real property" means a building or | 21 | | buildings consisting of one to 4 residential units or a | 22 | | residential condominium unit where at least one of the | 23 | | residential units or condominium units is occupied or intended | 24 | | to be occupied as a residence by the purchaser or borrower, or | 25 | | in the event that the purchaser or borrower is the trustee of a | 26 | | trust, by a beneficiary of that trust.
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| 1 | | (15) "Financial institution" means any bank subject to the | 2 | | Illinois Banking Act, any savings and loan association subject | 3 | | to the Illinois Savings and Loan Act of 1985, any savings bank | 4 | | subject to the Savings Bank Act, any credit union subject to | 5 | | the Illinois Credit Union Act, and any federally chartered | 6 | | commercial bank, savings and loan association, savings bank, or | 7 | | credit union organized and operated in this State pursuant to | 8 | | the laws of the United States. | 9 | | (Source: P.A. 100-485, eff. 9-8-17.)
| 10 | | (215 ILCS 155/5) (from Ch. 73, par. 1405)
| 11 | | Sec. 5. Certificate of authority required to engage in | 12 | | activities under this Act .
| 13 | | (a) It is unlawful for any company
to engage or to continue | 14 | | in the business of title insurance without first procuring from | 15 | | the Secretary a certificate of
authority stating that the
| 16 | | company has complied with the requirements of
Section 4 of this | 17 | | Act. An insurer that transacts any class of insurance other | 18 | | than title insurance anywhere in the United States is not | 19 | | eligible for the issuance of a certificate of authority to | 20 | | transact title insurance in this State nor for a renewal of a | 21 | | certificate of authority.
| 22 | | (b) It is unlawful for any person, firm, partnership, | 23 | | association, corporation, or other legal entity to act as or | 24 | | hold itself out to be a title insurance agent unless first | 25 | | procuring from the Secretary a certificate of authority subject |
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| 1 | | to the conditions of subsection (a) of Section 16. | 2 | | (Source: P.A. 94-893, eff. 6-20-06.)
| 3 | | (215 ILCS 155/12) (from Ch. 73, par. 1412)
| 4 | | Sec. 12. Examinations; compliance.
| 5 | | (a) The Secretary or his authorized representative shall | 6 | | have
the power and authority, and it shall be his duty, to | 7 | | cause to be visited
and examined annually any title insurance | 8 | | company doing business under this
Act, and to verify and compel | 9 | | compliance with the provisions of law governing it.
| 10 | | (b) The Secretary or his authorized representative agent | 11 | | shall have power and authority to
compel compliance with the | 12 | | provisions of this Act and may visit and shall, only upon the
| 13 | | showing of good cause, require a title insurance agent or | 14 | | independent escrowee to make appropriate records any title | 15 | | insurance company to take all legal means to obtain the
| 16 | | appropriate records of its registered agents and make them | 17 | | available for
examination at a time and place designated by the | 18 | | Secretary. Expenses incurred in
the course of such examinations | 19 | | will be the responsibility of the title insurance
company. In | 20 | | the event that a present or former registered agent or its | 21 | | successor refuses or is unable to cooperate with a title | 22 | | insurance company in furnishing the records requested by the | 23 | | Secretary or his or her authorized agent, then the Secretary or | 24 | | his or her authorized agent shall have the power and authority | 25 | | to obtain those records directly from the registered agent.
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| 1 | | (c) The Secretary or the Secretary's authorized | 2 | | representative shall have power and authority to compel an | 3 | | independent escrowee's compliance with the provisions of this | 4 | | Act pursuant to subsection (f) of Section 17 of this Act. | 5 | | (Source: P.A. 94-893, eff. 6-20-06.)
| 6 | | (215 ILCS 155/14) (from Ch. 73, par. 1414)
| 7 | | Sec. 14. Fees.
| 8 | | (a)
Every title insurance company and
every independent
| 9 | | escrowee subject to this Act shall pay the following fees:
| 10 | | (1) for filing the original application for a | 11 | | certificate of authority
and receiving the deposit | 12 | | required under this Act, $500;
| 13 | | (2) for the certificate of authority, $10;
| 14 | | (3) for every copy of a paper filed in the Department | 15 | | under this Act,
$1 per folio;
| 16 | | (4) for affixing the seal of the Department and | 17 | | certifying a copy, $2; and
| 18 | | (5) for filing the annual statement, $50.
| 19 | | (b)
Each title insurance company shall remit , for all of | 20 | | its title
insurance agents subject to this Act for filing an | 21 | | annual registration of
its agents, an amount equal to $3 for | 22 | | each policy issued by
all
of its title insurance
agents
in the | 23 | | immediately preceding calendar year.
| 24 | | (c) Every title insurance agent subject to this Act shall | 25 | | pay the following fees: |
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| 1 | | (1) for a resident of the State, filing the original | 2 | | application for a certification of authority and for the | 3 | | certificate of authority, $80; | 4 | | (2) for a nonresident of the State, filing the original | 5 | | application for a certification of authority and for the | 6 | | certificate of authority, $120; | 7 | | (3) for a resident and nonresident of the State, filing | 8 | | for renewal of a certificate, $80; and | 9 | | (4) for a resident and nonresident of the State, filing | 10 | | for reinstatement of a lapsed certificate, $120. | 11 | | (Source: P.A. 99-104, eff. 1-1-16 .)
| 12 | | (215 ILCS 155/14.1)
| 13 | | Sec. 14.1. Financial Institution Fund.
All moneys received | 14 | | by the Department of Financial and Professional Regulation
| 15 | | under this Act shall be deposited in the Financial Institution | 16 | | Fund created
under Section 6z-26 of the State Finance Act for | 17 | | expenses incurred in administering this Act .
| 18 | | (Source: P.A. 98-463, eff. 8-16-13.)
| 19 | | (215 ILCS 155/16) (from Ch. 73, par. 1416)
| 20 | | Sec. 16. Title insurance agents.
| 21 | | (a) No person, firm, partnership, association, corporation | 22 | | or other
legal entity shall act as or hold itself out to be a | 23 | | title insurance agent
unless it has been issued a certificate | 24 | | of authority by duly registered by a title insurance company |
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| 1 | | with the Secretary. Every title insurance agent registration | 2 | | before or after the effective date of this amendatory Act of | 3 | | the 101st General Assembly shall satisfy the requirements for a | 4 | | certificate of authority under this amendatory Act of the 101st | 5 | | General Assembly until January 1 of the calendar year | 6 | | immediately following the adoption of such rules that the | 7 | | Secretary shall adopt as may be necessary for the | 8 | | administration of granting of the certificates of authority for | 9 | | title insurance agents under this amendatory Act of the 101st | 10 | | General Assembly, and until the related application is either | 11 | | approved or disapproved; the continued recognition of such | 12 | | title insurance agent registrations during this period does not | 13 | | relieve title insurance agents and title insurance companies of | 14 | | their other obligations under this Act before the effective | 15 | | date of this amendatory Act of the 101st General Assembly.
| 16 | | (b) Each application for a certificate of authority | 17 | | registration shall be made on a form specified
by the Secretary | 18 | | and prepared by each title insurance agent company
which the | 19 | | agent represents . The title insurance agent and company | 20 | | authorizing the agent shall retain the
copy of the application | 21 | | and issued certificate of authority forward a copy to the | 22 | | Secretary .
| 23 | | (c) Every applicant for a certificate of authority | 24 | | registration , except a firm, partnership,
association, limited | 25 | | liability company, or corporation, must be 18 years or more of | 26 | | age. |
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| 1 | | (1) Every applicant for a certificate of authority that | 2 | | is a firm, partnership, association, corporation, or other | 3 | | legal entity shall designate and name at least one | 4 | | individual who (i) has a financial or other beneficial | 5 | | interest in the licensee and (ii) is authorized by at least | 6 | | one title insurance company to determine insurability of | 7 | | title. | 8 | | (2) Included in every application for a certificate of | 9 | | authority registration of a title insurance agent, | 10 | | including a firm, partnership,
association, limited | 11 | | liability company, or corporation, shall be an affidavit of | 12 | | the applicant title insurance agent, signed and notarized | 13 | | in front
of a notary public, affirming that the applicant | 14 | | and every owner, officer, director, principal, member, or
| 15 | | manager of the applicant has never been convicted or pled | 16 | | guilty to any felony or misdemeanor involving a crime of
| 17 | | theft or dishonesty or otherwise accurately disclosing any | 18 | | such felony or misdemeanor involving a crime of
theft or | 19 | | dishonesty. No person who has had a conviction or pled | 20 | | guilty to any felony or
misdemeanor involving theft or | 21 | | dishonesty may be registered by a title insurance agent | 22 | | company without a written notification to the Secretary | 23 | | disclosing the conviction or plea, and no such
person may | 24 | | serve as an owner, officer, director, principal, or manager | 25 | | of any registered title insurance
agent without the written | 26 | | permission of the Secretary.
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| 1 | | (3) An applicant for a certificate of authority of a | 2 | | title insurance agent, including a firm, partnership, | 3 | | association, limited liability company, or corporation, | 4 | | shall include an affidavit of the applicant, signed and | 5 | | notarized in front of a notary public, affirming that the | 6 | | applicant is authorized by one or more title insurance | 7 | | companies to determine insurability of title, stating the | 8 | | title insurance company or companies with which it is | 9 | | authorized, and listing the individuals authorized. | 10 | | (4) Every applicant shall obtain and maintain errors | 11 | | and omissions insurance, or its equivalent, in an amount | 12 | | acceptable to the title insurance company authorizing the | 13 | | agent, but in no event in an amount less than $250,000 per | 14 | | claim and an aggregate limit of $500,000 with a deductible | 15 | | no greater than $25,000. A title insurance company shall | 16 | | not provide the insurance directly or indirectly on behalf | 17 | | of a title insurance agent. In the event errors and | 18 | | omissions insurance is unavailable generally, the | 19 | | Department shall adopt rules for alternative methods to | 20 | | comply with this paragraph. | 21 | | (d) A certificate of authority Registration shall be | 22 | | renewed on January 1 every 2 years made annually by a filing | 23 | | with the Secretary;
supplemental filings registrations for a | 24 | | new agency agreement with a title insurance company agents to | 25 | | be added
between certificate of authority renewal annual | 26 | | filings shall be made by the title insurance agent from time to |
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| 1 | | time in the manner
provided by the Secretary; certificates of | 2 | | authority registrations shall remain in effect unless
revoked | 3 | | or suspended by the Secretary or
voluntarily withdrawn by the | 4 | | title insurance agent,
registrant or the title insurance agent | 5 | | no longer has any agency agreement with a title insurance | 6 | | company.
| 7 | | (e) Funds deposited in connection with any escrows, | 8 | | settlements, or closings shall be deposited in a separate | 9 | | fiduciary trust account or accounts in a bank or other | 10 | | financial institution insured by an agency of the federal | 11 | | government unless the instructions provide otherwise. The | 12 | | funds shall be the property of the person or persons entitled | 13 | | thereto under the provisions of the escrow, settlement, or | 14 | | closing and shall be segregated by escrow, settlement, or | 15 | | closing in the records of the escrow agent. The funds shall not | 16 | | be subject to any debts of the escrowee and shall be used only | 17 | | in accordance with the terms of the individual escrow, | 18 | | settlement, or closing under which the funds were accepted. | 19 | | Interest received on funds deposited with the escrow agent | 20 | | in connection with any escrow, settlement, or closing shall be | 21 | | paid to the depositing party unless the instructions provide | 22 | | otherwise. | 23 | | The escrow agent shall maintain separate records of all | 24 | | receipts and disbursements of escrow, settlement, or closing | 25 | | funds. | 26 | | The escrow agent shall comply with any rules adopted by the |
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| 1 | | Secretary pertaining to escrow, settlement, or closing | 2 | | transactions. | 3 | | (f) A title insurance agent shall not act as an escrow | 4 | | agent in a nonresidential real property transaction where the | 5 | | amount of settlement funds on deposit with the escrow agent is | 6 | | less than $2,000,000 or in a residential real property | 7 | | transaction unless the title insurance agent, title insurance | 8 | | company, or another authorized title insurance agent has | 9 | | committed for the issuance of title insurance in that | 10 | | transaction and the title insurance agent is authorized to act | 11 | | as an escrow agent on behalf of the title insurance company for | 12 | | which the commitment for title insurance has been issued. The | 13 | | authorization under the preceding sentence shall be given | 14 | | either (1) by an agency contract with the title insurance | 15 | | company which contract, in compliance with the requirements set | 16 | | forth in subsection (g) of this Section, authorizes the title | 17 | | insurance agent to act as an escrow agent on behalf of the | 18 | | title insurance company or (2) by a closing protection letter | 19 | | in compliance with the requirements set forth in Section 16.1 | 20 | | of this Act, issued by the title insurance company to the | 21 | | seller, buyer, borrower, and lender. A closing protection | 22 | | letter shall not be issued by a title insurance agent. The | 23 | | provisions of this subsection (f) shall not apply to the | 24 | | authority of a title insurance agent to act as an escrow agent | 25 | | under subsection (g) of Section 17 of this Act. | 26 | | (g) If an agency contract between the title insurance |
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| 1 | | company and the title insurance agent is the source of the | 2 | | authority under subsection (f) of this Section for a title | 3 | | insurance agent to act as escrow agent for a real property | 4 | | transaction, then the agency contract shall provide for no less | 5 | | protection from the title insurance company to all parties to | 6 | | the real property transaction than the title insurance company | 7 | | would have provided to those parties had the title insurance | 8 | | company issued a closing protection letter in conformity with | 9 | | Section 16.1 of this Act. | 10 | | (h) A title insurance company shall be liable for the acts | 11 | | or omissions of its title insurance agent as an escrow agent if | 12 | | the title insurance company has authorized the title insurance | 13 | | agent under subsections (f) and (g) of this Section 16 and only | 14 | | to the extent of the liability undertaken by the title | 15 | | insurance company in the agency agreement or closing protection | 16 | | letter. The liability, if any, of the title insurance agent to | 17 | | the title insurance company for acts and omissions of the title | 18 | | insurance agent as an escrow agent shall not be limited or | 19 | | otherwise modified because the title insurance company has | 20 | | provided closing protection to a party or parties to a real | 21 | | property transaction escrow, settlement, or closing. The | 22 | | escrow agent shall not charge a fee for protection provided by | 23 | | a title insurance company to parties to real property | 24 | | transactions under subsections (f) and (g) of this Section 16 | 25 | | and Section 16.1, but shall collect from the parties the fee | 26 | | charged by the title insurance company and shall promptly remit |
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| 1 | | the fee to the title insurance company. The title insurance | 2 | | company may charge the parties a reasonable fee for protection | 3 | | provided pursuant to subsections (f) and (g) of this Section 16 | 4 | | and Section 16.1 and shall not pay any portion of the fee to | 5 | | the escrow agent. The payment of any portion of the fee to the | 6 | | escrow agent by the title insurance company, shall be deemed a | 7 | | prohibited inducement or compensation in violation of Section | 8 | | 24 of this Act. | 9 | | (i) The Secretary shall adopt and amend such rules as may | 10 | | be required for the proper administration and enforcement of | 11 | | this Section 16 consistent with the federal Real Estate | 12 | | Settlement Procedures Act and Section 24 of this Act. | 13 | | (Source: P.A. 98-398, eff. 1-1-14; 98-832, eff. 1-1-15; 99-104, | 14 | | eff. 1-1-16 .)
| 15 | | (215 ILCS 155/18) (from Ch. 73, par. 1418)
| 16 | | Sec. 18. Disclosure of financial interests No referral | 17 | | payments; kickbacks .
| 18 | | (a) Application of this Section is limited to residential
| 19 | | properties of 4 or fewer units, at least one of which units is | 20 | | occupied or
to be occupied by an owner, legal or beneficial.
| 21 | | (b) No title insurance company, independent escrowee, or
| 22 | | title insurance agent may issue a title insurance
policy to, or | 23 | | provide services to an applicant if it knows or has reason
to | 24 | | believe that the applicant was referred to it by any producer | 25 | | of title
business or by any associate of such producer, where |
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| 1 | | the producer, the
associate, or both, have a financial interest | 2 | | in the title insurance
company, independent escrowee, or title | 3 | | insurance agent to which business
is referred unless the | 4 | | producer has disclosed to any party paying for the
products or | 5 | | services, or his representative, the financial interest of the
| 6 | | producer of title business or associate referring the title | 7 | | business and a
disclosure of an estimate of those charges to be | 8 | | paid as described in
Section 19. Such disclosure must be made | 9 | | in writing on forms prescribed by
the Secretary prior to the | 10 | | time that the commitment for title insurance is
issued. The | 11 | | title insurance company, independent escrowee, or title
| 12 | | insurance agent shall maintain the disclosure forms for a | 13 | | period of 3 years.
| 14 | | (c)
Each title insurance company, independent escrowee, | 15 | | and title
insurance agent shall file with the Secretary, on | 16 | | forms prescribed by the
Secretary, reports setting forth the | 17 | | names and addresses of those persons,
if any, who have had a | 18 | | financial interest in the title insurance company,
independent | 19 | | escrowee, or title insurance agent during the calendar year,
| 20 | | who are known or reasonably believed by the title insurance | 21 | | company,
independent escrowee, or title insurance agent to be | 22 | | producers of title
business or associates of producers.
| 23 | | (1)
Each title insurance company and independent | 24 | | escrowee shall file the
report required under this | 25 | | subsection with its application for a
certificate of | 26 | | authority and at any time there is a change in the
|
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| 1 | | information provided in the last report.
| 2 | | (2)
Each title insurance agent shall file the report | 3 | | required under
this subsection with its title insurance | 4 | | company for inclusion with its
application for | 5 | | registration and at any time there is a change in the
| 6 | | information provided in its last report.
| 7 | | (3)
Each title insurance company, independent | 8 | | escrowee, or title
insurance agent doing business on the | 9 | | effective date of this Act shall file
the report required | 10 | | under this subsection within 90 days after such
effective | 11 | | date.
| 12 | | (Source: P.A. 94-893, eff. 6-20-06.)
| 13 | | (215 ILCS 155/18.2 new) | 14 | | Sec. 18.2. Rate and service fee filings. | 15 | | (a) Rate and service fee filing requirements. | 16 | | (1) Every title insurance company shall file with the | 17 | | Secretary every manual of classifications, rules, plans, | 18 | | forms, and schedules of fees and every modification of any | 19 | | of the foregoing relating to the rates that it proposes to | 20 | | use. Every such filing shall state the proposed effective | 21 | | date and shall indicate the character and extent of the | 22 | | coverage contemplated. Every title insurance company and | 23 | | independent escrowee shall file with the Secretary the | 24 | | specification of services and schedule of fees for each fee | 25 | | intended to be charged to the parties to a transaction |
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| 1 | | pursuant to paragraph (5) of subsection (k) of this | 2 | | Section. | 3 | | (2) A title insurance company may satisfy its | 4 | | obligations to make such filings by becoming a member of, | 5 | | or a subscriber to, a licensed rating organization that | 6 | | makes such filings and by authorizing the Secretary to | 7 | | accept such filings on its behalf. | 8 | | (3) The Secretary shall make such review of the filings | 9 | | as may be necessary to carry out the provisions of this Act | 10 | | and either approve or disapprove a filing or any part of a | 11 | | filing, including the proposed effective date. | 12 | | (4) Subject to the provisions of paragraphs (5) and (6) | 13 | | and either approval or disapproval of the Secretary, each | 14 | | filing shall be on file for a period of 30 days before it | 15 | | can become effective only by approval of the Secretary. The | 16 | | Secretary may, upon written notice to the person making the | 17 | | filing within the 30-day period, extend the period no more | 18 | | than 30 days to enable the Secretary to complete the review | 19 | | of the filing. Further extensions of the waiting period may | 20 | | be made with the consent of the title insurance company or | 21 | | rating organization making the filing. Upon written | 22 | | application by the title insurance company or rating | 23 | | organization making the filing, the Secretary may | 24 | | authorize a filing or any part of a filing to become | 25 | | effective before the expiration of the waiting period or | 26 | | any extension. |
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| 1 | | (5) When the Secretary finds that any rate for a | 2 | | particular kind or class of risk cannot practicably be | 3 | | filed before it is used, or any contract or kind of title | 4 | | insurance, by reason of rarity or peculiar circumstances, | 5 | | does not lend itself to advance determination and filing of | 6 | | rates, the Secretary may permit the rates to be used | 7 | | without a previous filing and waiting period, and such | 8 | | rates can be effective only by approval of the Secretary. | 9 | | (6) A rate in excess of a filing may be used on any | 10 | | specific risk upon the written consent of the insured, | 11 | | filed with the Secretary, explaining the applicability of | 12 | | the rate to the specific risk; the rate becomes effective | 13 | | when the consent is filed. | 14 | | (b) Justification for rates. A rate filing shall be | 15 | | accompanied by a statement of the title insurance company or | 16 | | rating organization making the filing setting forth the basis | 17 | | upon which the rate was fixed and the fees are to be computed. | 18 | | Any filing may be justified by: | 19 | | (1) the experience or judgment of the title insurance | 20 | | company or rating organization making the filing; | 21 | | (2) the experience of other title insurance companies | 22 | | or rating organizations; or | 23 | | (3) any other factors that the title insurance company | 24 | | or rating organization deems relevant. | 25 | | (c) Making of rates. | 26 | | (1) In making rates, due consideration shall be given |
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| 1 | | to past and prospective loss experience, to exposure to | 2 | | loss, to underwriting practice and judgment, to the extent | 3 | | appropriate, to past and prospective expenses, the | 4 | | expenses incurred by title insurance companies, to a | 5 | | reasonable margin for profit and contingencies, and to all | 6 | | other relevant factors both within and outside of this | 7 | | State. | 8 | | (2) Rates shall not be inadequate or unfairly | 9 | | discriminatory, nor shall rates be excessive; that is, such | 10 | | as to permit title insurance companies to earn a greater | 11 | | profit, after payment of all taxes upon all income, than is | 12 | | necessary to enable them to earn over the years sufficient | 13 | | amounts to pay their actual expenses and losses arising in | 14 | | the conduct of their title insurance business, including | 15 | | the actual costs of maintaining a title plant, plus a | 16 | | reasonable profit. | 17 | | (3) In ascertaining the estimated future earnings of | 18 | | title insurance companies, the Secretary shall utilize a | 19 | | properly weighted cross section of title insurance | 20 | | companies operating in this State representative of the | 21 | | average of normally efficiently operated title insurance | 22 | | companies including on a weighted basis, both title | 23 | | insurance companies having their own title plants, and | 24 | | those not operating upon the title plant system. In | 25 | | ascertaining what is a reasonable profit after payment of | 26 | | all taxes on such income, the Secretary shall give due |
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| 1 | | consideration to the following matters: | 2 | | (A) the average rates of profit after payment of | 3 | | taxes on all income earned by other industry generally; | 4 | | (B) the desirability for stability of rate | 5 | | structure; | 6 | | (C) the necessity of insuring through growth in | 7 | | assets in times of high business activity, the | 8 | | financial solvency of title insurance companies in | 9 | | times of economic depression; and | 10 | | (D) The necessity for earning sufficient dividends | 11 | | on the stock of title insurance companies to induce | 12 | | capital to be invested in title insurance companies. | 13 | | (4) The systems of expense provisions and the amount of | 14 | | expense charged against each class of contract or policy | 15 | | may vary between title insurance companies. Rates may, in | 16 | | the discretion of any title insurance company, be less than | 17 | | the cost of performing the work in the case of smaller | 18 | | insurances, and the excess may be charged against the | 19 | | larger insurances without rendering the rates unfairly | 20 | | discriminatory. | 21 | | (d) Disapproval of filings. If the Secretary finds that the | 22 | | filing or a part of the filing does not meet the requirements | 23 | | of this Act, the Secretary shall issue an order specifying in | 24 | | what respects it fails to meet the requirements of this Act. If | 25 | | the filing or part of the filing already has become effective, | 26 | | the order shall also state when, within a reasonable period, |
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| 1 | | such filing or part shall be deemed no longer effective. A | 2 | | title insurance company or rating organization shall have the | 3 | | right at any time to withdraw a filing or a part of the filing, | 4 | | subject to the provisions of subsection (f) of this Section | 5 | | regarding deviations. Copies of the order shall be sent to | 6 | | every such title insurance company and rating organization. The | 7 | | order shall not affect any contract or policy made or issued | 8 | | prior to the expiration of the period set forth in the order. | 9 | | (e) Rating organizations. | 10 | | (1) A corporation, an unincorporated association, a | 11 | | partnership, or an individual, whether located within or | 12 | | outside this State, may make
application to the Secretary | 13 | | for a license as a rating organization for title insurance | 14 | | companies. | 15 | | (A) An entity seeking a license as a rating | 16 | | organization shall file: | 17 | | (i) a copy of its constitution, its articles of | 18 | | agreement or association or its certificate of | 19 | | incorporation, and of its bylaws, rules, and | 20 | | regulations governing the conduct of its business; | 21 | | (ii) a list of its members and subscribers; | 22 | | (iii) the name and address of a resident of | 23 | | this State upon whom notices or orders of the | 24 | | Secretary or process affecting such rating | 25 | | organization may be served; and | 26 | | (iv) a statement of its qualifications as a |
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| 1 | | rating organization. | 2 | | (B) If the Secretary finds that the applicant is | 3 | | competent, trustworthy, and otherwise qualified to act | 4 | | as a rating organization, and that its constitution, | 5 | | articles of agreement or association or certificate of | 6 | | incorporation, and its bylaws, rules, and regulations | 7 | | governing the conduct of its business conforms to the | 8 | | requirements of law, the Secretary shall issue a | 9 | | license authorizing the applicant to act as a rating | 10 | | organization for title insurance. Every such | 11 | | application shall be granted or denied in whole or in | 12 | | part by the Secretary within 60 days after the date of | 13 | | its filing. Licenses issued under this Section shall | 14 | | remain in effect for 3 years unless sooner suspended or | 15 | | revoked by the Secretary or withdrawn by the licensee. | 16 | | The fee for the license shall be $25. Licenses issued | 17 | | under this Section may be suspended or revoked by the | 18 | | Secretary, after hearing upon notice, in the event the | 19 | | rating organization ceases to meet the requirements of | 20 | | this subsection. | 21 | | (C) Every rating organization shall notify the | 22 | | Secretary promptly of every change in: | 23 | | (i) its constitution, its articles of | 24 | | agreement or association or its certificate of | 25 | | incorporation, and its bylaws, rules, and | 26 | | regulations governing the conduct of its business; |
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| 1 | | (ii) its list of members and subscribers; and | 2 | | (iii) the name and address of the resident of | 3 | | this State designated by it upon whom notices or | 4 | | orders of the Secretary or process affecting such | 5 | | rating organization may be served. | 6 | | (2) Subject to rules adopted by the Secretary, each | 7 | | rating organization shall permit any title insurance | 8 | | company not a member to be a subscriber to its rating | 9 | | services. Each rating organization shall furnish its | 10 | | rating services without discrimination to its members and | 11 | | subscribers. The furnishing of rating services without | 12 | | discrimination to its members and subscribers, or the | 13 | | refusal of any rating organization to admit a title | 14 | | insurance company as a subscriber, shall, at the request of | 15 | | any subscriber or any such title insurance company, be | 16 | | reviewed by the Secretary at a hearing held upon at least | 17 | | 10 days' written notice to such rating organization and to | 18 | | such subscriber or title insurance company. If the | 19 | | Secretary finds that the actions of the rating organization | 20 | | were discriminatory, the Secretary shall order that such | 21 | | actions cease. If the rating organization fails to grant or | 22 | | reject an application of a title insurance company for | 23 | | subscribership within 30 days after it was made, the title | 24 | | insurance company may request a review by the Secretary as | 25 | | if the application had been rejected. If the Secretary | 26 | | finds that the title insurance company has been refused |
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| 1 | | admittance to the rating organization as a subscriber | 2 | | without justification, the Secretary shall order the | 3 | | rating organization to admit the title insurance company as | 4 | | a subscriber. If the Secretary finds that the action of the | 5 | | rating organization was justified, the Secretary shall | 6 | | make an order affirming its action. | 7 | | (3) Cooperation among rating organizations, or among | 8 | | rating organizations and title insurance companies, and | 9 | | concert of action among title insurance companies under the | 10 | | same general management and control in rate making or in | 11 | | other matters within the scope of this Act is hereby | 12 | | authorized, provided that the filings are subject to all | 13 | | the provisions of this Act that are applicable to filings | 14 | | generally. The Secretary may review such activities and | 15 | | practices and if, after a hearing, the Secretary finds that | 16 | | any such activity or practice is unfair or unreasonable or | 17 | | otherwise inconsistent with the provisions of this Act, the | 18 | | Secretary may issue a written order specifying in what | 19 | | respects such activity or practice is unfair or | 20 | | unreasonable or otherwise inconsistent with the provisions | 21 | | of this Act and requiring the discontinuance of such | 22 | | activity or practice. | 23 | | (f) Deviations. Every member of or subscriber to a rating | 24 | | organization shall adhere to the filings made on its behalf by | 25 | | such organization, except that any title insurance company that | 26 | | is a member of or subscriber to a rating organization may file |
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| 1 | | with the Secretary a decrease or increase to be applied to any | 2 | | or all elements of the fees produced by the rating system so | 3 | | filed for a class of title insurance that is found by the | 4 | | Secretary to be a proper rating unit for the application of | 5 | | such uniform decrease or increase, or to be applied to the | 6 | | rates for a particular area. Such deviation filing shall | 7 | | specify the basis for the modification and shall be accompanied | 8 | | by the data or historical pattern upon which the applicant | 9 | | relies. A copy of the filing and data shall be sent | 10 | | simultaneously to such rating organization. Any such deviation | 11 | | filing shall be on file for a waiting period of 30 days before | 12 | | it becomes effective. The Secretary shall make such review of | 13 | | the deviation filing as may be necessary to carry out the | 14 | | provisions of this Act, and either approve or disapprove the | 15 | | filing or any part of the filing, including the proposed | 16 | | effective date. Extension of the waiting period may be made in | 17 | | the same manner that the period is extended in the case of rate | 18 | | filings. Upon written application of the person making the | 19 | | filing, the Secretary may authorize a deviation filing or any | 20 | | part of the filing to become effective before the expiration of | 21 | | the waiting period or any extension. Deviation filings shall be | 22 | | subject to the provisions of subsection (d) of this Section. | 23 | | Each deviation shall be effective for at least one year after | 24 | | the date such deviation is approved unless terminated sooner | 25 | | with the approval of the Secretary, or in accordance with the | 26 | | provisions of subsection (d) of this Section. |
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| 1 | | (g) Examinations of rating organizations. The Secretary | 2 | | shall, at least once in 5 years, make or cause to be made an | 3 | | examination of a rating organization licensed under this Act in | 4 | | this State. The reasonable costs of the examination shall be | 5 | | paid by the rating organization examined upon presentation to | 6 | | it of a detailed account of such costs. The officers, managers, | 7 | | agents, and employees of the rating organization may be | 8 | | examined at any time under oath and shall exhibit all books, | 9 | | records, accounts, documents, or agreements governing its | 10 | | method of operation. The Secretary shall furnish 2 copies of | 11 | | the examination report to the organization examined and shall | 12 | | notify such organization that it may, within 20 days, request a | 13 | | hearing on the report or on any facts or recommendations | 14 | | contained in the report. Before filing the report for public | 15 | | inspection, the Secretary shall grant a hearing to the | 16 | | organization examined. The report of the examination, when | 17 | | filed for public inspection, shall be admissible in evidence in | 18 | | any action or proceeding brought by the Secretary against the | 19 | | organization examined, or its officers or agents, and shall be | 20 | | prima facie evidence of facts stated in the report. The | 21 | | Secretary may withhold the report of the examination from | 22 | | public inspection for such time as the Secretary may deem | 23 | | proper. In lieu of the examination, the Secretary may accept | 24 | | the report of an examination made by the title insurance | 25 | | supervisory official of another state pursuant to the laws of | 26 | | that state. |
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| 1 | | (h) Rate administration. | 2 | | (1) The Secretary shall adopt reasonable rules and | 3 | | statistical plans, reasonably adapted to each of the rating | 4 | | systems on file with the Secretary, which may be modified | 5 | | from time to time, and which shall be used by each title | 6 | | insurance company in the recording and reporting of the | 7 | | composition of its business, its loss and countrywide | 8 | | expense experience and those of its title insurance | 9 | | underwriters in order that the experience of all title | 10 | | insurance companies may be made available, at least | 11 | | annually, in such form and detail as may be necessary to | 12 | | aid the Secretary in determining whether rating systems | 13 | | comply with the standards set forth in this Act. The rules | 14 | | and plans may also provide for the recording and reporting | 15 | | of expense experience items that are specially applicable | 16 | | to this State and are not susceptible of determination by a | 17 | | prorating of countrywide expense experience. In adopting | 18 | | the rules and plans, the Secretary shall give due | 19 | | consideration to the rating systems on file with the | 20 | | Secretary, and in order that the rules and plans may be as | 21 | | uniform as is practicable among the several states, to the | 22 | | rules and to form of the plans used for such rating systems | 23 | | in other states. The rules and plans shall not place an | 24 | | unreasonable burden of expense on any title insurance | 25 | | company. No title insurance company shall be required to | 26 | | record or report its expense and loss experience on a |
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| 1 | | classification basis that is inconsistent with the rating | 2 | | system filed by it, nor shall any title insurance company | 3 | | be required to report its experience to any agency of which | 4 | | it is not a member or subscriber. The Secretary may | 5 | | designate one or more rating organizations or other | 6 | | agencies to assist the Secretary in gathering such | 7 | | experience and making compilations, and such compilations | 8 | | shall be made available, subject to reasonable rules | 9 | | adopted by the Secretary, to title insurance companies and | 10 | | rating organizations. | 11 | | (2) Reasonable rules and plans may be adopted by the | 12 | | Secretary for the interchange of data necessary for the | 13 | | application of rating plans. | 14 | | (3) In order to further uniform administration of rate | 15 | | regulatory laws, the Secretary and every title insurance | 16 | | company and rating organization may exchange information | 17 | | and experience data with title insurance supervisory | 18 | | officials, title insurance companies, and title insurance | 19 | | rating organizations in other states, and may consult with | 20 | | them with respect to rate making and the application of | 21 | | rating systems. | 22 | | (4) In addition to any powers expressly enumerated in | 23 | | this Act, the Secretary shall have full power and | 24 | | authority, and it shall be their duty, to enforce and carry | 25 | | out by rules, orders, or otherwise the provisions of this | 26 | | Act and the full intent. The Secretary may adopt rules |
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| 1 | | consistent with this Act as may be necessary or proper in | 2 | | the exercise of his or her powers or for the performance of | 3 | | his or her duties under this Act. | 4 | | (i) False or misleading information. No person or | 5 | | organization shall willfully withhold information from or | 6 | | knowingly give false or misleading information to the | 7 | | Secretary, any statistical agency designated by the Secretary, | 8 | | any rating organization, or any title insurance company that | 9 | | will affect the rates or fees chargeable under this Act. | 10 | | (j) Penalties. | 11 | | (1) The Secretary may, if the Secretary finds that any | 12 | | person or organization has violated any provision of this | 13 | | Section, impose a penalty of not more than $500 for each | 14 | | such violation, but if the Secretary finds such violation | 15 | | to be willful, the Secretary may impose a penalty of not | 16 | | more than $5,000 for each such violation. Such penalties | 17 | | may be in addition to any other penalty provided by law. | 18 | | (2) The Secretary may suspend the license of a rating | 19 | | organization or the certificate of authority of a title | 20 | | insurance company that fails to comply with an order of the | 21 | | Secretary within the time limited by such order, or any | 22 | | extension that the Secretary may grant. The Secretary shall | 23 | | not suspend the license of any rating organization or the | 24 | | certificate of authority of a title insurance company for | 25 | | failure to comply with an order until the time prescribed | 26 | | for an appeal has expired or, if an appeal has been taken, |
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| 1 | | until such order has been affirmed. The Secretary may | 2 | | determine when a suspension of license shall become | 3 | | effective, and it shall remain in effect for the period | 4 | | fixed by the Secretary, unless the Secretary modifies or | 5 | | rescinds the suspension, or until the order upon which the | 6 | | suspension is based is modified, rescinded, or reversed. | 7 | | (3) No penalty shall be imposed and no license or | 8 | | certificate of authority shall be suspended or revoked | 9 | | pursuant to this Section except upon a written order of the | 10 | | Secretary stating his or her findings made after a hearing | 11 | | held upon not less than 10 days' written notice to the | 12 | | holder specifying the alleged violation. | 13 | | (4) All hearings provided for in this Section shall be | 14 | | conducted, and the decision of the Secretary on the issue | 15 | | or filing involved shall be rendered, in accordance with | 16 | | the Administrative Review Law. | 17 | | (k) In all circumstances, whether involving rates filed by | 18 | | a rating organization or title insurance company: | 19 | | (1) separate filings shall be provided for the 2 | 20 | | following geographic zones: | 21 | | (A) Zone 1 comprising the counties of Cook, Lake, | 22 | | DuPage, McHenry, Kane, Will, Grundy, and Kendall; and | 23 | | (B) Zone 2 comprising all other counties within the | 24 | | State. | 25 | | The Secretary shall submit a report to the Governor and | 26 | | General Assembly no later than January 1, 2023 as to |
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| 1 | | whether multiple zones are justified based on differences | 2 | | in costs between the zones. | 3 | | (2) Rates shall be separated into classes based on | 4 | | monetary insurance ranges without distinction of | 5 | | commercial or residential use of the property. | 6 | | (3) From the owner's policy premium, loan policy | 7 | | premium, and residential real property endorsement | 8 | | charges, which does not include closing protection letter | 9 | | charges, a title agent shall retain 80% and remit 20% to a | 10 | | title insurance company if services are performed by the | 11 | | title insurance agent to at least (i) determine | 12 | | insurability of title, which includes title examination | 13 | | and title clearance, and (ii) issue title insurance | 14 | | commitments, policies, and endorsements. For endorsement | 15 | | charges that are not for residential real property as | 16 | | defined in Section 3 of this Act, which does not include | 17 | | closing protection letter charges, a title agent shall | 18 | | retain 80% and remit 20% to a title insurance company | 19 | | provided the title agent is authorized pursuant to its | 20 | | agency contract to issue the endorsement and completes the | 21 | | work necessary to issue the endorsement. If the title agent | 22 | | is not authorized pursuant to its agency agreement to issue | 23 | | the endorsement and does not complete the work necessary to | 24 | | issue the endorsement, the title agent shall retain 0% and | 25 | | remit 100% of the charge to a title insurance company. | 26 | | (4) Any fees charged to the parties to the transaction |
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| 1 | | other than the owner's policy premium, loan policy premium, | 2 | | and endorsement charges shall not be retained or remitted | 3 | | between a title insurance company and title insurance | 4 | | agent, or with any other entity or individual, unless the | 5 | | charges are being retained or remitted in an amount | 6 | | directly related to services actually performed. | 7 | | (5) Subject to all other provisions of this Section | 8 | | regarding rate filing requirements, a filing shall also | 9 | | include a specification of services to be performed and | 10 | | schedule of fees for each fee intended to be charged to the | 11 | | parties to the transaction, which includes, but is not | 12 | | limited to, closing fees, escrow fees, settlement fees, | 13 | | closing protection letter fees subject to Section 16.1 of | 14 | | this Act, and like charges, and is applicable to services | 15 | | provided by an independent escrowee, which must similarly | 16 | | file a specification of services and schedule of fees with | 17 | | the Secretary.
| 18 | | (215 ILCS 155/21) (from Ch. 73, par. 1421)
| 19 | | Sec. 21. Regulatory action.
| 20 | | (a) The Secretary may refuse to grant, and may suspend or
| 21 | | revoke, any certificate of authority, registration,
or license | 22 | | issued
pursuant to this Act or may impose a fine for a | 23 | | violation of this Act if he determines that the holder of or | 24 | | applicant for
such certificate, registration , or license:
| 25 | | (1) has intentionally made a material misstatement or |
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| 1 | | fraudulent
misrepresentation in relation to a matter | 2 | | covered by this Act;
| 3 | | (2) has misappropriated or tortiously converted to its | 4 | | own use, or
illegally withheld, monies held in a fiduciary | 5 | | capacity;
| 6 | | (3) has demonstrated untrustworthiness or incompetency | 7 | | in transacting
the business of guaranteeing titles to real | 8 | | estate in such a manner as to
endanger the public;
| 9 | | (4) has materially misrepresented the terms or | 10 | | conditions of contracts
or agreements to which it is a | 11 | | party;
| 12 | | (5) has paid any commissions, discounts or any part of | 13 | | its premiums,
fees or other charges to any person in | 14 | | violation of any State or federal
law or regulations or | 15 | | opinion letters issued under the federal Real Estate
| 16 | | Settlement Procedures Act of 1974;
| 17 | | (5.1) has accepted or referred a title order or | 18 | | performed title services with knowledge that the order was | 19 | | placed in exchange for the express or implicit promise that | 20 | | a consumer has been or will be referred to that provider | 21 | | for services; | 22 | | (5.2) has given or accepted any portion of any charge | 23 | | made or received for the rendering of a real estate | 24 | | settlement service in connection with a transaction other | 25 | | than for services actually performed; | 26 | | (5.3) has disbursed funds prior to the actual delivery |
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| 1 | | of funds acceptable to the closing and settlement services | 2 | | agent; | 3 | | (5.4) has disbursed of closing and settlement services | 4 | | funds before all necessary conditions of the transaction | 5 | | have been met; | 6 | | (5.5) has paid for, furnished or offered to pay for or | 7 | | furnish any reward or compensation for any past, present, | 8 | | or future title insurance business or closing and | 9 | | settlement services or any other title business, | 10 | | including, but not limited to, the payment of a fee to an | 11 | | attorney for the referral of title business; | 12 | | (5.6) has paid or offered to pay any fee to a producer | 13 | | of title business for making an inspection or appraisal of | 14 | | property; | 15 | | (5.7) has received securities of the title insurance | 16 | | company, title insurance agent, or independent escrowee at | 17 | | prices below the normal market price, or bonds or | 18 | | debentures that guarantee a higher than normal interest | 19 | | rate, whether or not the consummation of the transaction is | 20 | | directly or indirectly related to the number of closing and | 21 | | settlement services or title orders coming to the title | 22 | | insurance company, title insurance agent or independent | 23 | | escrowee through the efforts of that person; | 24 | | (5.8) has furnished to any producer of title business | 25 | | or associate of a producer reports containing publicly | 26 | | recorded information, appraisals, estimates of income |
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| 1 | | production potential, information kits, or similar | 2 | | packages containing information about one or more parcels | 3 | | of real property helpful to any producer of title business | 4 | | without making a charge that is commensurate with the | 5 | | actual cost of the work performed and the material | 6 | | furnished; Additionally: | 7 | | (A) There must be a written service agreement | 8 | | between a title agent and any entity providing any | 9 | | closing, title, or ancillary related services on | 10 | | behalf of a title agent. Pursuant to this written | 11 | | service agreement, a service fee must be charged to the | 12 | | title agent and paid by the title agent to the service | 13 | | provider. The service fee charge is in addition to any | 14 | | search fee charged to the title agent and cannot be | 15 | | added on to the charges to the seller, buyer, borrower, | 16 | | or lender. The charge for a service fee shall be no | 17 | | less than $350; and | 18 | | (B) Pursuant to an agency agreement or service | 19 | | agreement, the cost of searches procured on behalf of | 20 | | the title agent must be charged to the title agent and | 21 | | paid by the title agent to the provider of such | 22 | | searches in an amount commensurate with the actual cost | 23 | | of the work performed and the material furnished. The | 24 | | search fee charge is in addition to any service fee | 25 | | charged to the title agent and cannot be added on to | 26 | | the charges to the seller, buyer, borrower, or lender. |
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| 1 | | (5.9) has made or guaranteed or has offered to make or | 2 | | guarantee, either directly or indirectly, any loan to any | 3 | | producer of title business or associate of a producer with | 4 | | terms more favorable than otherwise available to the | 5 | | producer; | 6 | | (5.10) has guaranteed, or offered to guarantee the | 7 | | proper performance of closing and settlement services or | 8 | | undertakings that are to be performed by any producer of | 9 | | title business, except as authorized pursuant to Sections | 10 | | 16 and 16.1 of this Act; | 11 | | (5.11) has provided, or offered to provide, either | 12 | | directly or indirectly, a compensating balance or deposit | 13 | | in a lending institution either for the express or implied | 14 | | purpose of influencing the placement or channeling of title | 15 | | insurance business by the lending institution; this | 16 | | provision does not prohibit the maintenance by a title | 17 | | insurance company, title agent, or independent escrowee of | 18 | | demand deposits or escrow deposits that are reasonably | 19 | | necessary for use in the ordinary course of the business of | 20 | | the title insurance company, title agent, or independent | 21 | | escrowee; | 22 | | (5.12) has paid for or offered to pay for the fees or | 23 | | charges of an outside professional, such as an attorney, | 24 | | engineer, appraiser, or surveyor, whose services are | 25 | | required by any producer of title business to structure or | 26 | | complete a particular transaction; |
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| 1 | | (5.13) has provided or offered to provide non-title | 2 | | services, such as computerized bookkeeping, forms | 3 | | management, computer programming, or any similar benefit, | 4 | | without a charge that is commensurate with the actual cost | 5 | | to any producer of title business or to any associate of a | 6 | | producer of title business; | 7 | | (5.14) has furnished or offered to furnish all or any | 8 | | part of the time or productive effort of any employee of | 9 | | the title insurance company, title insurance agent, or | 10 | | independent escrowee, such as office manager, escrow | 11 | | officer, secretary, clerk, or messenger, to any producer of | 12 | | the title business or associate of a producer of title | 13 | | business; | 14 | | (5.15) has paid for or offered to pay for all or any | 15 | | part of the salary of an employee of any producer of title | 16 | | business; | 17 | | (5.16) has paid for or offered to pay for the salary or | 18 | | any part of the salary of a relative of any producer of | 19 | | title business if that payment is in excess of the | 20 | | reasonable value of work performed by the relative on | 21 | | behalf of the title insurance company, title insurance | 22 | | agent or independent escrowee; | 23 | | (5.17) has paid for or offered to pay for services by | 24 | | any producer of title business that are ordinarily to be | 25 | | performed by the producer of title business in his or her | 26 | | licensed capacity as a real estate or mortgage broker or |
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| 1 | | salesman or agent; | 2 | | (5.18) has furnished or offered to furnish, or paid for | 3 | | or offered to pay for, furniture, office supplies, | 4 | | telephones, facsimile machines, equipment, or automobiles | 5 | | to any producer of title business, or has paid for or | 6 | | offered to pay for any portion of the cost of renting, | 7 | | leasing, operating or maintaining any of these items; | 8 | | (5.19) has paid for, furnished, or waived, or offered | 9 | | to pay for, furnish, or waive, all or any part of the rent | 10 | | for space occupied by any producer of title business; | 11 | | (5.20) has rented or offered to rent space from any | 12 | | producer of title business, regardless of the purpose, at a | 13 | | rent that is excessive when compared with rents for | 14 | | comparable space in the geographic area, or has paid or | 15 | | offered to pay rent based in whole or in part on the volume | 16 | | of business generated by any producer of title business; | 17 | | (5.21) has paid for or offered to pay for gifts, | 18 | | vacations, business trips, convention expenses, travel | 19 | | expenses, membership fees, registration fees, lodging, or | 20 | | meals on behalf of a producer of title insurance, directly | 21 | | or indirectly, or supplied letters of credit, credit cards, | 22 | | or any such benefits; | 23 | | (5.22) has paid for or offered to pay for the | 24 | | cancellation fee for a title report or other fee on behalf | 25 | | of any producer of title business either before or after | 26 | | inducing the producer of title business to cancel an order |
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| 1 | | with another title insurance company, title insurance | 2 | | agent, or independent escrowee; | 3 | | (5.23) has paid for, furnished, or offered to pay for | 4 | | or furnish any business form to any producer of title | 5 | | business, other than a form regularly used in the conduct | 6 | | of the title insurance company's business, that is | 7 | | furnished for the convenience of the title insurance | 8 | | company and does not constitute a direct monetary benefit | 9 | | to any producer of title business; | 10 | | (5.24) has given trading stamps, cash redemption | 11 | | coupons, or similar items to any producer of title | 12 | | business;
| 13 | | (6) has failed to comply with the deposit and reserve | 14 | | requirements of
this Act or any other requirements of this | 15 | | Act; | 16 | | (7) has committed fraud or misrepresentation in | 17 | | applying for or procuring any certificate of authority, | 18 | | registration, or license issued pursuant to this Act; | 19 | | (8) has a conviction or plea of guilty or plea of nolo | 20 | | contendere in this State or any other jurisdiction to (i) | 21 | | any felony or (ii) a misdemeanor, an essential element of | 22 | | which is dishonesty or fraud or larceny, embezzlement, or | 23 | | obtaining money, property, or credit by false pretenses or | 24 | | by means of a confidence game; | 25 | | (9) has been disciplined by another state, the District | 26 | | of Columbia, a territory, foreign nation, a governmental |
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| 1 | | agency, or any entity authorized to impose discipline if at | 2 | | least one of the grounds for that discipline is the same as | 3 | | or equivalent to one of the grounds for which a title | 4 | | insurance company, title insurance agent, or independent | 5 | | escrowee may be disciplined under this Act or if at least | 6 | | one of the grounds for that discipline involves dishonesty; | 7 | | a certified copy of the record of the action by the other | 8 | | state or jurisdiction shall be prima facie evidence | 9 | | thereof; | 10 | | (10) has advertising that is inaccurate, misleading, | 11 | | or contrary to the provisions of this Act; | 12 | | (11) has knowingly and willfully made any substantial | 13 | | misrepresentation or untruthful advertising; | 14 | | (12) has made any false promises of a character likely | 15 | | to influence, persuade, or induce; | 16 | | (13) has knowingly failed to account for or remit any | 17 | | money or documents coming into the possession of a title | 18 | | insurance company, title insurance agent, or independent | 19 | | escrowee that belong to others; | 20 | | (14) has engaged in dishonorable, unethical, or | 21 | | unprofessional conduct of a character likely to deceive, | 22 | | defraud, or harm the public; | 23 | | (15) has violated the terms of a disciplinary order | 24 | | issued by the Department; | 25 | | (16) has disregarded or violated any provision of this | 26 | | Act or the published rules adopted by the Department to |
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| 1 | | enforce this Act or has aided or abetted any individual, | 2 | | partnership, registered limited liability partnership, | 3 | | limited liability company, or corporation in disregarding | 4 | | any provision of this Act or the published rules; or | 5 | | (17) has acted as a title insurance company, title | 6 | | insurance agent, or independent escrowee without a | 7 | | certificate of authority, registration, or license after | 8 | | the title insurance company, title insurance agent, or | 9 | | independent escrowee's certificate of authority, | 10 | | registration, or license was inoperative.
| 11 | | (a-1) Nothing in subsection (a) shall be construed as | 12 | | prohibiting: | 13 | | (1) publishing or printing and disseminating any | 14 | | educational information, notwithstanding that the | 15 | | information may be of benefit to a producer of title | 16 | | business; | 17 | | (2) distributing information, whether printed or oral, | 18 | | advertising novelties, and gift items not to exceed $25 in | 19 | | value that bear the name of the giver (but not the name of | 20 | | the recipient) to producers of title business; | 21 | | (3) providing reasonable promotional and educational | 22 | | activities that are not conditioned on the referral of | 23 | | business and that do not involve the defraying of expenses | 24 | | that otherwise would be incurred by persons in a position | 25 | | to refer settlement services or business incident to those | 26 | | services, such as a reception by a title company, seminars |
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| 1 | | on title matters offered to professionals, furnishing | 2 | | property descriptions and names of record owners without | 3 | | charge to lenders, real estate brokers, attorneys, or | 4 | | others, or distribution of calendars and other promotional | 5 | | material that do not exceed $25 in value; | 6 | | (4) the payment of a fee: | 7 | | (A) that bears a reasonable relationship to the | 8 | | value of the services rendered or performed: | 9 | | (i) by any person or party to attorneys at law | 10 | | for services actually rendered; | 11 | | (ii) by a title company to its duly appointed | 12 | | agent for services actually performed in the | 13 | | issuance of a policy of title insurance; or | 14 | | (iii) by a lender to its duly appointed agent | 15 | | for services actually performed in the making of a | 16 | | loan; and | 17 | | (B) to a settlement service provider for services | 18 | | outside of the normal scope of that provider's services | 19 | | to the parties to the transaction; | 20 | | (5) the payment of a bona fide salary or compensation | 21 | | or other payment for goods or facilities actually furnished | 22 | | or for services actually performed, so long as the salary, | 23 | | compensation, or other payment bears a reasonable | 24 | | relationship to the value of the services, goods, or | 25 | | facilities; | 26 | | (6) proportionate returns on an ownership or franchise |
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| 1 | | interest; | 2 | | (7) ordinary and customary business entertainment or | 3 | | promotional activities with reasonable frequency not to | 4 | | exceed $100 in value per person, per event by title | 5 | | insurance companies, title insurance agents, or | 6 | | independent escrowees that are not directly or indirectly | 7 | | consideration as an inducement or compensation for the | 8 | | referral of title business or for the referral of any | 9 | | escrow or other service from a title insurance company, | 10 | | title insurance agent, or independent escrowee. | 11 | | (b) In every case where a registration or certificate is | 12 | | suspended or
revoked, or an application for a registration or | 13 | | certificate or renewal
thereof is refused, the Secretary shall | 14 | | serve notice of his action,
including a statement of the | 15 | | reasons for his action, as provided by this Act. When a notice | 16 | | of suspension or revocation of a certificate of authority is | 17 | | given to a title insurance company, the Secretary shall also | 18 | | notify all the registered agents of that title insurance | 19 | | company of the Secretary's action.
| 20 | | (c) In the case of a refusal to issue or renew a | 21 | | certificate or accept a
registration, the applicant or | 22 | | registrant may request in writing, within 30
days after the | 23 | | date of service, a hearing. In the case of a
refusal to renew, | 24 | | the expiring registration or certificate shall be deemed
to | 25 | | continue in force until 30 days after the service of the notice | 26 | | of
refusal to renew, or if a hearing is requested during that |
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| 1 | | period, until a
final order is entered pursuant to such | 2 | | hearing.
| 3 | | (d) The suspension or revocation of a registration or | 4 | | certificate shall
take effect upon service of notice thereof. | 5 | | The holder of any such
suspended registration or certificate | 6 | | may request in writing, within 30
days of such service, a | 7 | | hearing.
| 8 | | (e) In cases of suspension or revocation of registration | 9 | | pursuant to
subsection (a), the Secretary may, in the public | 10 | | interest, issue an order of
suspension or revocation which | 11 | | shall take effect upon service of
notification thereof. Such | 12 | | order shall become final 60 days from the date
of service | 13 | | unless the registrant requests in writing, within such 60 days,
| 14 | | a formal hearing thereon. In the event a hearing is requested, | 15 | | the order
shall remain temporary until a final order is entered | 16 | | pursuant to such hearing.
| 17 | | (f) Hearing shall be held at such time and place as may be | 18 | | designated by
the Secretary either in the City of Springfield, | 19 | | the City of Chicago, or in
the county in which the principal | 20 | | business office of the affected
registrant or certificate | 21 | | holder is located.
| 22 | | (g) The suspension or revocation of a registration or | 23 | | certificate or the
refusal to issue or renew a registration or | 24 | | certificate shall not in any
way limit or terminate the | 25 | | responsibilities of any registrant or
certificate holder | 26 | | arising under any policy or contract of title insurance
to |
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| 1 | | which it is a party. No new contract or policy of title | 2 | | insurance may
be issued, nor may any existing policy or | 3 | | contract to title insurance be
renewed by any registrant or | 4 | | certificate holder during any period of
suspension or | 5 | | revocation of a registration or certificate.
| 6 | | (h) The Secretary may issue a cease and desist order to a | 7 | | title insurance
company, agent, or other entity doing business | 8 | | without the required license or
registration, when in the | 9 | | opinion of the Secretary, the company, agent, or other
entity | 10 | | is violating or is about to violate any provision of this Act | 11 | | or any
law or of
any
rule or condition imposed in writing by | 12 | | the Department.
| 13 | | The Secretary may issue the cease and desist order without | 14 | | notice and before a
hearing.
| 15 | | The Secretary shall have the authority to prescribe rules | 16 | | for the
administration of this Section.
| 17 | | If it is determined that the Secretary had the authority to | 18 | | issue the cease
and desist order, he may issue such orders as | 19 | | may be reasonably necessary to
correct, eliminate or remedy | 20 | | such conduct.
| 21 | | Any person or company subject to an order pursuant to this | 22 | | Section is
entitled to judicial review of the order in | 23 | | accordance with the provisions of
the Administrative Review | 24 | | Law.
| 25 | | The powers vested in the Secretary by this Section are | 26 | | additional to any and
all other powers and remedies vested in |
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| 1 | | the Secretary by law, and nothing in
this Section shall be | 2 | | construed as requiring that the Secretary
shall employ the
| 3 | | powers conferred in this Section instead of or as a condition | 4 | | precedent to the
exercise of any other power or remedy vested | 5 | | in the Secretary.
| 6 | | (Source: P.A. 98-398, eff. 1-1-14.)
| 7 | | (215 ILCS 155/23) (from Ch. 73, par. 1423)
| 8 | | Sec. 23. Violation; penalties ; actual damages; injunctive | 9 | | relief .
| 10 | | (a) Any violation of any of the provisions of this Act and, | 11 | | beginning January 1, 2013, any violation of any of the | 12 | | provisions of Article 3 of the Residential Real Property | 13 | | Disclosure Act shall
constitute a business offense and shall | 14 | | subject the party violating the
same to a penalty of $1000 for | 15 | | each offense.
| 16 | | (b) A violation of paragraphs (5.1) through (5.24) of | 17 | | subsection (a) of Section 21 is a Class A misdemeanor. | 18 | | (c) A person who violates the prohibitions or limitations | 19 | | of subsection (a) of Section 21 shall be liable to the person | 20 | | or persons charged for the settlement service involved in the | 21 | | violation for actual damages. | 22 | | (d) A title insurance company, a title insurance agent, or | 23 | | an independent escrowee who violates the prohibitions or | 24 | | limitations of subsection (a) of Section 21 shall be subject to | 25 | | injunctive relief. If a permanent injunction is granted, the |
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| 1 | | court may award actual damages. Reasonable attorney's fees and | 2 | | costs may be awarded to the prevailing party. | 3 | | (e) (b) Nothing contained in this Section shall affect the | 4 | | right of the Secretary to revoke or suspend a title insurance | 5 | | company's , title insurance agent's, or independent escrowee's | 6 | | certificate of authority or a title insurance agent's | 7 | | registration under any other Section of this Act. | 8 | | (Source: P.A. 97-891, eff. 8-3-12.)
| 9 | | (215 ILCS 155/19 rep.)
| 10 | | (215 ILCS 155/24 rep.)
| 11 | | (215 ILCS 155/25 rep.)
| 12 | | Section 10. The Title Insurance Act is amended by repealing | 13 | | Sections 19, 24, and 25.
| 14 | | Section 99. Effective date. This Act takes effect upon | 15 | | becoming law, except that Section 18.2 of the Title Insurance | 16 | | Act takes effect September 1, 2020. |
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