- June 17, 2013
- All Indiana Issuing Offices
- Legislative Updates - New Legislation - Mandatory Issuance of Closing Protection Letters in Residential Transactions
The Indiana Legislature has enacted SEA 370* requiring the mandatory issuance of closing protection letters to all parties to a residential real estate transactions for a fee. This bulletin is to inform you of the new law and effective dates in order for you to inform your customers. A supplemental bulletin will be issued providing you with additional guidelines, the approved Stewart Title Guaranty closing protection letter form to be issued, and fees. Bulletin 199 issued by the Indiana Department of Insurance on June 7, 2013 setting forth deadlines for underwriters to file rates and policy forms and closing protection letter forms and fees can be found at the following link: http://www.in.gov/idoi/files/Bulletin_199.pdf.
The new law applies to closings conducted after June 30, 2013, and requires a title company acting as a settlement or closing agent to issue a closing protection letter to a lender, borrower, buyer and seller of the property in all residential real transactions in which a title policy is to be issued. The following note should be added to your title commitments, email, fax and other correspondence stating the following or using substantially similar language in order to alert your customers to the new requirement:
Note for information: Effective July 1, 2013, SEA 370 requires title companies acting as a settlement or closing agent to issue a closing protection letter for a fee to a lender, borrower, buyer and seller in residential real estate transactions in which a title policy is to be issued. The closing protection letter provides coverage against any loss of settlement funds (under the terms and provisions of the closing protection letter) that results from: 1) theft or misappropriation of settlement funds; and 2) failure to comply with written closing instructions agreed to by the title company to the extent that items (1) and (2) relate to the status of title to or the validity, enforceability and priority of the lien of the mortgage on the party’s interest in the land.
*New Indiana Code Section 27-7-3-22 et seq.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
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.