- November 07, 2003
- All New York State Office Counsel, Managers and Agents
- Section 14 ("TIRSA") Rate Manual
As you know, Section 14 of the Title Insurance Rate Service Association ("TIRSA") Rate Manual provides for the availability of a reduced premium under certain specified circumstances where application is made for a loan policy. Further, Section 14 goes on to state,
"In order to ensure consumer awareness of this Section, each Company shall include the following statement, in bold print, on the face of each application confirmation:
IF THIS IS A REFINANCE WITHIN TEN YEARS, YOU MAY BE ENTITLED TO A REDUCED PREMIUM. CONTACT THIS COMPANY IMMEDIATELY FOR DETAILS. "
Currently, Stewart Title Insurance Company ("Stewart Title") is a defendant in a class action lawsuit, along with other New York licensed title insurers, where the plaintiffs seek damages for Stewart Title's alleged failure to comply with the terms of Section 14 and improperly charging full premiums in circumstances where reduced premiums should have applied. The Court has suggested that action be taken in an effort to notify borrowers of the availability of the reduced rate under Section 14.
Therefore, effective immediately, Stewart Title requires all of its policy issuing offices, both direct and agency operations, to comply with the following process in an effort to make sure that the actual borrower and not just the applicant (to the extent that there is a difference) receives the required disclosure.
1. Within three days of receipt of application for a loan policy, mail a confirmation of the title insurance application to the applicant, at his address, which contains the required statement regarding the potential availability of a reduced premium.
2. Within three days of receipt of application for a loan policy, mail a completed copy of the attached cover letter, on your company letterhead, together with the confirmation of the title insurance application, to the borrower at the address of the premises to be insured or, in the event of an application for insurance on non owner occupied property, at the address for the borrower as provided in your application form.
3. To the extent necessary, application forms must be amended to require the mailing address of both the applicant and the borrower/owner of the premises to be insured to facilitate the process of notification.
Under any and all circumstances where it can be ascertained that the borrower/owner of the premises to be insured under a loan policy is eligible, the applicable reduced rate under Section 14 of the Rate Manual must be charged. In the event of any uncertainty as to whether the reduced rate applies, you must contact the Legal Department or the Agency Department of Stewart Title for guidance. There may be no deviations from this requirement.
If you have any questions regarding either the content of this memo or the criteria for eligibility of reduced rates for loan policies, please call company counsel.
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.
BORROWER COVER LETTER/APPLICATION CONFIRMATION
Re: Title No.
Enclosed please find confirmation of an order for title insurance placed with our office in connection with the above referenced matter. The purpose of this letter is to call your attention specifically to the disclosure on the confirmation form that reads as follows:
IF THIS IS A REFINANCE WITHIN TEN YEARS, YOU MAY BE ENTITLED TO A REDUCED PREMIUM. CONTACT THIS COMPANY IMMEDIATELY FOR DETAILS.
Simply stated, if you first purchased the identical premises that is the subject of this mortgage application, or if you have refinanced an existing mortgage on this identical premises, within the last ten years, you may qualify to pay a reduced premium on the policy to be issued for this transaction. In order to determine if you qualify, please call or write this office with the following information:
1 the name of the title insurance company or agency which insured your most recent transaction and;
2 the policy number or the company&'s file number from that transaction and;
3 the amount you paid for the premises or the current principal balance on your existing mortgage.
If you feel that you may qualify for this reduced premium, please call or write us with the above information as soon as possible. Your failure to provide the requested information could cause you to be charged the full premium rate in this transaction.
Thank you for this opportunity to be of service.