- August 12, 2014
- All Florida Issuing Offices
- UNDERWRITING - Policy Surcharge
The Office of Insurance Regulation (O. I. R.) is requiring that for all closings occurring on or after September 2, 2014, there be a surcharge in the amount of three dollars and twenty-eight cents ($3.28) on each title insurance policy issued in the state of Florida. The surcharge shall be paid by the party responsible for paying the title insurance premium. The surcharge does not apply to policies issued at the simultaneous rate, meaning that it applies to only one policy per transaction.
The surcharge is not considered premium, and, therefore, is not subject to the agency split. The surcharge should be shown separately in the 1300 series of the HUD 1 closing statement. When remitting premium to Stewart Title, please include a separate check payable to Stewart Title Guaranty Company in the total amount of the surcharges collected in the billing cycle. In the alternative, you may remit a check in the amount of $3.28 for each transaction. Please describe the check as being for “National and K.E.L. Title Surcharge Payment” and include a list of your file numbers.
The reason for the policy surcharge is that in the past five years title insurers known as National Title Insurance Company and K.E.L. Title Insurance Group went into receivership administered by the Florida Department of Financial Services. Section 627.7865, Florida Statutes, provides that each title insurer licensed to do business in the state of Florida shall be assessed based on its Florida market share to pay all unpaid claims on real property in this state of a title insurer which is liquidated. Further, pursuant to Section 631.401, Florida Statutes, which was adopted in 2011, it is required that O.I.R. shall order a policy surcharge so that title insurers may recoup their assessment. In the case of National Title, the receiver has determined there is a shortfall (the amount by which claims and administrative expenses exceeds policy reserves) in the amount of $212,478.00, and in the case of K.E.L., the amount is $2,023,870.00. Therefore, there has been a title insurer assessment and policy surcharge in that amount.
Stewart Title will notify you promptly when the surcharge should be terminated.
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.
- Bulletins Replaced:
- FL2013002 Policy Surcharge
- Related Bulletins:
- Underwriting Manual:
- Exceptions Manual: