DAR File No. 40183

Insurance, Title and Escrow Commission

Rule R592-11

Title Insurance Producer Annual and Controlled Business Reports

Notice of Proposed Rule

(Amendment)

DAR File No.: 40183
Filed: 02/01/2016 03:47:57 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The reason for the change is to update the method that title insurance producers must use to submit annual reports.

Summary of the rule or change:

The change removes the email address that was formerly the submission point for annual reports and adds a secure file upload address that shall be used going forward. It also sets forth that annual reports shall be submitted as a PDF and with information in a particular order.

State statutory or constitutional authorization for this rule:

• Section 31A-23a-413
• Subsection 31A-2-404(2)(a)
• Subsection 31A-23a-406(1)(g)
• Subsection 31A-23a-503(8)

Anticipated cost or savings to:

the state budget:

While the changes require that annual reports be uploaded to a secure server, it is a server the department is already using for a similar function with other divisions. Any ongoing costs will be minor and will be spread across many divisions. The Department of Technology Services owns the server, so any costs incurred by the state will be paid to the state.

local governments:

There are no ongoing costs or savings to local government. The rule change governs how title insurance producers file annual reports with the state.

small businesses:

There are no ongoing costs or savings to small businesses. Title insurance producers already file annual reports with the state; this change merely has them file the report in a new location.

persons other than small businesses, businesses, or local governmental entities:

There are no ongoing costs or savings to any other persons. The rule change governs how title insurance producers file annual reports with the state.

Compliance costs for affected persons:

There are no compliance costs for affected persons. The change requires that title insurance producers file their annual reports by using a new method, but there are no associated costs for using said method.

Comments by the department head on the fiscal impact the rule may have on businesses:

There will be no fiscal impact for businesses to comply with the changes in this rule. The Insurance Department is requiring title insurance producers to securely upload their annual reports because it is a more secure method for all involved parties.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Title and Escrow Commission
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/16/2016

This rule may become effective on:

03/23/2016

Authorized by:

Steve Gooch, Information Specialist

R592. Insurance, Title and Escrow Commission.

R592-11. Title Insurance Producer Annual and Controlled Business Reports.

R592-11-1. Authority.

This rule is promulgated pursuant to:

(1) Section 31A-2-404(2)(a), which requires the Title and Escrow Commission (Commission) to make rules related to title insurance;

(2) Section 31A-23a-413, which requires the annual filing of a report containing a verified statement of the financial condition, transactions, and affairs by an agency title insurance producer and an individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency title insurance producer;

(3) Subsection 31A-23a-503(8), which requires the annual filing of a controlled business report; and

(4) Subsection 31A-23a-406(1)(g), which requires the maintenance of a physical address in Utah.

 

R592-11-2. Purpose and Scope.

(1) The purpose of this rule is to establish the form and filing deadline for the Title Insurance Producer Annual Report and Controlled Business Report required by Section 31A-23a-413 and Subsection 31A-23a-503(8)(a).

(2) This rule applies to an agency title insurance producer and an individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency title insurance producer.

 

R592-11-3. Title Insurance Producer Annual Report.

(1) The following shall file a Title Insurance Producer Annual Report not later than April 30 of each year if they have conducted title insurance business in the State of Utah within the time period described in R592-11-3(4):

(a) an agency title insurance producer; and

(b) an individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency title insurance producer.

(2) A Title Insurance Producer Annual Report shall consist of:

(a) a balance sheet and an income and expense statement prepared and presented in conformity with generally accepted accounting principles;

(i) title premium, including endorsement income and expenses, shall be reported separately from the escrow income and expenses;

(b) the name and address of each financial institution where a title or escrow trust account is maintained;

(c) proof of financial protection that complies with Subsection 31A-23a-204(2) shall consist of one or more of the following:

(i) a copy of the declarations page of a fidelity bond;

(ii) a copy of the declarations page of a professional liability insurance policy; or

(iii) a copy of the commissioner's approval of equivalent financial protection approved by the commissioner;

(d) the name of the individual title insurance producer designated as the "qualifying licensee," as provided in 31A-23a-204; and

(e) the physical address in Utah maintained by the agency title insurance producer or individual title insurance producer, pursuant to 31A-23a-406(1)(g).

(3) Subsection R592-11-3-(2)(c) does not apply to an attorney exempted under 31A-23a-204(8).

(4) The Title Insurance Producer Annual Report period shall be the preceding calendar year.

(5) A Title Insurance Producer Annual Report will be considered protected data if the producer submitting the report requests classification as a protected record in accordance with Sections 63G-2-305 and 63G-2-309.

 

R592-11-4. Controlled Business Report.

(1) The following that conduct title insurance business in the State during the time period described in R592-11-4(2)(a) shall file an annual Controlled Business Report not later than April 30 of each year:

(a) an agency title insurance producer; and

(b) an individual title insurance producer who is not an employee of a title insurer or who has not been designated to an agency title insurance producer.

(2)(a) The Controlled Business Report period shall be the preceding calendar year and shall contain the information required in Subsection 31A-23a-503(8)(a); and

(b) contain the name, address, and percentage of ownership of each owner.

(3) A Controlled Business Report is a public record upon filing.

 

R592-11-5. Electronic Filing of Title Insurance Producer Annual Report and Controlled Business Report.

(1) The Title Insurance Producer Annual Report and the Controlled Business Report shall be submitted together electronically [via email to [email protected]]using the Department of Insurance's secure file upload site located at https://forms.uid.utah.gov/insurance/fileUploads/.

(a) Registration may be required.

(2) The Title Insurance Producer Annual Report and the Controlled Business Report shall be submitted not later than April 30 of each year as attachments to the Title Insurance Agency Annual Reports Transmittal Form.

(3) The following report forms, which are available on the department's website, shall be used to submit the Title Insurance Producer Annual Report and the Controlled Business Report:

(a) Title Insurance Producer Annual and Controlled Business Reports Transmittal form; and

(b) Controlled Business Report form.

(4) Actual copies of the forms may be used or may be adapted to a particular word processing system, however, if adapted, the content, size, and font[, and format] shall be similar and shall be:

(a) converted to one portable document format or PDF prior to submission; and

(b) submitted in the order listed on the Annual Report Checklist located at http://insurance.utah.gov/agent/title/agency-reports-information.php.

 

R592-11-6. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R592-11-7. Enforcement Date.

The commissioner will begin enforcing this rule 45 days from the rule's effective date.

 

R592-11-8. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, that invalidity shall not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: title insurance

Date of Enactment or Last Substantive Amendment: [November 2, 2015]2016

Notice of Continuation: June 15, 2011

Authorizing, and Implemented or Interpreted Law: 31A-2-404(2)(a); 31A-23a-406(1)(g); 31A-23a-413; 31A-23a-503(8)