DAR File No. 44175

Insurance, Title and Escrow Commission

Rule R592-11

Title Insurance Producer Annual and Controlled Business Reports

Notice of Proposed Rule

(Amendment)

DAR File No.: 44175
Filed: 11/01/2019 11:24:13 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

S.B. 121, passed during the 2019 General Session, eliminated the prohibition on controlled business, which eliminated the need to report controlled business information to the Department of Insurance (Department). This amendment eliminates the requirement to report controlled business. It also eliminates requirements to provide unnecessary commercial financial information in the annual report.

Summary of the rule or change:

Controlled business information is no longer required in the annual report. A title insurance agency's commercial financial information is no longer required in the annual report. A streamlined report form is provided for title insurance agencies to use.

Statutory or constitutional authorization for this rule:

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

Anticipated cost or savings to:

the state budget:

The Department spent a very small amount of time reviewing controlled business and commercial financial information. There may be minimal cost savings because the statute no longer requires the Department to review that information.

local governments:

There is no anticipated cost or savings to local governments. This rule change governs only the relationship between the Department and its title insurance licensees.

small businesses:

Title insurance agencies may have incurred costs in gathering and reporting controlled business and commercial financial information to the Department. This amendment eliminates the need to incur those costs.

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

There is no anticipated cost or savings to any other persons. This rule change governs only the relationship between the Department and its title insurance licensees.

Compliance costs for affected persons:

There are no compliance costs for any affected persons. This amendment requires no additional work or reporting. If anything, affected persons may see a slight reduction in costs as a result of this amendment.

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

After conducting a thorough analysis, it was determined that this proposed rule amendment will not result in a fiscal impact to businesses.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office 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 sgooch@utah.gov

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:

12/16/2019

This rule may become effective on:

12/23/2019

Authorized by:

Steve Gooch, Information Specialist

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

This rule amendment is not expected to have any fiscal impact on non-small businesses' revenues or expenditures because it requires no additional work or reporting. This amendment was required by S.B.121 (2019), which eliminated the prohibition on controlled business, and hence the need to report controlled business information to the Department. If a business incurred costs when gathering and reporting such information, they will no longer need to incur those costs. The Department has no way of knowing how many businesses would fit that description, nor the amount of costs that could have been incurred. The Department expects that there will be no fiscal impact for the vast majority of affected businesses.

 

The head of the Insurance Department, Todd E. Kiser, has reviewed and approved this fiscal analysis.

 

 

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 certain title insurance producers to file an annual report[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]3) 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 t]This rule [is to ]establishes the [form]requirements of 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]include:

(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]the number and location of each title or escrow trust account;

([c]b) proof of financial protection [that complies with ]required by 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]c) the name of the individual title insurance producer designated as the "qualifying licensee," as provided in 31A-23a-204;[ and]

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

(e) the physical address of each Utah branch office maintained by the agency title insurance producer or individual title insurance producer.

(3) A title insurance producer may comply with Subsection R592-11-3[-(2)(c) does not apply to an attorney exempted under 31A-23a-204(8)]by completing and submitting [.

(4) T]the Title Insurance Producer Annual Report Form that is available on the department's website[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 using the Insurance Department's[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 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]5. Enforcement Date.

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

 

R592-11-[8]6. Severability.

If any provision [or clause ]of this rule or its application to any person or situation is held to be 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: [April 15, 2016]2019

Notice of Continuation: June 15, 2016

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