- December 22, 1992
- All Underwritten Companies
- Closing Protection Letters
The Insurance Department has issued Circular Letter No. 18 (1992) dated December 14, 1992, prohibiting title insurers from issuing closing protection letters in New York State. The department states "that title insurers lack authority to issue a CPL to a lender insofar as that lender's attorney is concerned, because its purported protection falls beyond the scope of the monoline title insurer's license and writing authority that is exclusively confined to Section 1113 (a)(18) of the Insurance Law." This restates the position of Stewart Title Insurance Company regarding Closing Protection Letters and lender's counsel. All title insurers are now specifically prohibited from issuing these letters for lenders counsel and further must rescind all existing letters as to future transactions. The letter does allow for a title insurer to "issue an appropriate agent authorization letter confined to the title insurer's liability as principal for the acts of its agent within the scope of that agent's authority on the title insurer's behalf."
Please be advised that we will strictly adhere to the conditions of the department's letter in processing any new requests for letters and will be rescinding any existing Closing Protection Letters pursuant to the Insurance Department's requirements.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 3.20 Closing Protection Letters
- Exceptions Manual: