Bulletin: CA2020003

Date:
August 24, 2020
To:
All California Issuing Offices
RE:
RATES AND/OR FORMS UPDATE - CA Rate Filing

Dear Associates:

Although obtaining a full copy of a Trust is always preferred, California Probate Code Section 18100.5 (Code) alternatively permits the use of a Certification of Trust (Certification). The Code specifically allows for Stewart Title Guaranty Company’s (STG) “reliance” on the truthfulness of the matters stated therein by relying upon the Trustee(s) to bind the trust. STG requires a completed Certification. Waivers or modifications to the Certification require prior written approval of an STG Underwriter.

STG has amended the California Certification (See attached form) based upon a recent review of the Code and its claims and litigation experience. The significant changes to the Certification are as follows:

(1) Referring to the Trustee(s) as the “currently active” Trustee(s), to conform to the actual language of the Code;

(2) Requesting information regarding all “currently active” Trustee(s) and requiring that all “currently active” Trustee(s) sign the Certification. If the Certification is not signed by all “currently active” Trustees, an explanation is required. Acceptance of the Certification without signatures from all “currently active” Trustee(s) requires review and approval of a STG Underwriter.

(3) Pending liens or judgments against the Trust and its Settlors; and

(4) Pending or filed lawsuits against the Trust and its Settlors or any similar lawsuits settled in the preceding three years. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter. Stewart Title Guaranty Company is filing an amended Schedule of Charges and Forms for Title Insurance in the State of California ("Manual"). This Manual is pending California Department of Insurance approval, anticipated to become effective on September 21, 2020; please post as required. Attached are the links for your convenience. (Click here to view a copy of the “Redline” and the “Accepted” versions).

The following is an overview of the proposed STGC Rate Manual changes. However, to best understand the changes and which apply to you, the Manual itself should be read thoroughly and carefully in its entirety.

  1. Section 1.12 Disaster - this discount provision is being updated to include the availability of the discount if the individuals elect to purchase a replacement property following a disaster rather than remodeling or rebuilding the damaged or destroyed structure.
  2. Section 1.26 Special Discounts for Residential - this discount provision is being updated to include first responders and to afford buyers a discount on the lender’s premium in seller-paid counties.
  3. Section 2.10 U.S. ALTA Policy - this section is being added to include pricing for the issuance of U.S. ALTA policies.
  4. Section 2.13 REO Properties - Owner’s Policy following a Foreclosure, Trustee’s Sale or Deed in Lieu - this section is being redrafted to clarify which rate applies to which policy and includes a 10% increase in the charge commensurate with the increased liability of REO transactions.
  5. Section 2.17 Binders - this section is being updated to clarify how to properly calculate the charge for a binder, i.e., the process will “return” to the practice of charging a “binder fee” in addition to the calculated policy amount and the charge for the policy. In addition, there is a new section permitting a binder for the owner’s insurance on an all-cash deal which permits the Binder Holder to still get the concurrent rate for a loan taken out within 6 months of the purchase.
  6. Section 3.15 ALTA Residential Limited Coverage Junior Loan Policy - this section is being updated to set limitations and costs related to these limited, inexpensive policies and to explain any charges for updates, when available.
  7. Section 3.19 Centralized Processing Loan and Refinance Rate (CPLR) For Issuance of an ALTA Short Form Residential Loan Policy - this section is being overhauled and expanded from a Company home office product to have available a significantly discounted rate for qualified residential refinance or loan transactions processed through a centralized processing unit.
  8. Section 7 Commitment for Title Insurance - this section is being updated to clarify how to properly calculate the charge for a commitment, i.e., the process will “return” to the practice of charging a “commitment fee” in addition to the calculated policy amount and the charge for the policy. In addition, there is some clarity on expired commitments. Note: Please take notice of the Section 7 Commitments that were added to the rate manual in January 2019. Please make sure your teams are aware of and charge consistent with the rate manual when issuing commitments.
  9. Section 9.15 Condition of Title Guarantee (CTG) - this section is being updated to increase the charges for the product as well as set alternate charges and liability limitation for a CTG based upon known or obvious extra hazardous risks.
  10. Section 10 Endorsements - some new ALTA and STG endorsements were added, a few charges have been increased while others decreased, and some endorsements were updated to show the actual charge rather than a reference to a section of the rate manual. In addition, the footnote has been updated to provide clarification.
  11. Section 11.3 Basic Rate - the charges for the non-commercial rates have been increased to be more consistent with the residential charges in Section 11.2 that were increased early in 2019. These changes do not affect non-residential transaction title rates priced pursuant to Major Transactions section 2.20.

If you have any questions about this bulletin, any pricing concerns, or any other bulletin please contact a member of your Stewart Title Guaranty Company’s California Underwriting Team.

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.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None