- April 25, 2011
- All Arkansas Issuing Offices
- Arkansas Act 515; Closing Protection
This bulletin is being issued to inform you that Arkansas lawmakers have adopted Act 515 (the Act), which expressly prohibits title insurance agencies from issuing closing protection or title insurance policies as an insurer, and provides that "only a title insurer may issue closing protection or issue as an insurer a title insurance policy."
Please note that the Act changes the definition of "closing" to include "the collection and disbursement of funds and title insurance premiums out of escrow" in connection with a transaction involving either personal or real property and removes from the definition of "title insurance agent" a closing agent "that provides closing services but does not otherwise engage in the title insurance business."
The Act provides that closing agents will now be required to alert parties in a real estate transaction to the availability of closing protection. This function formerly fell to title insurers. Title insurers are also barred from issuing closing protection letters unless they contemplate issuing a title insurance policy. Additionally, the Act amends state rules as they relate to instances when insurers are required to issue closing protection. The measure states that "upon receiving a written request by a party to a closing with a licensed title insurance agency with which the title insurer has an agency contract or closing agent with which the title insurer is in privity of contract, the title insurer shall issue a closing protection letter to the requesting party." Previously, insurers were only required to issue such protection if a written request was made to a "licensed agency."
The full text of the Act can be found by clicking here.
If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
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.