Public Act 095-0570
 		





HB1319 Enrolled
LRB095 07310 KBJ 27449 b






    AN ACT concerning insurance.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:

 
    Section 5. The Title Insurance Act is amended  by changing 
Section 3 and by adding Section 18.1 as follows:
 



    (215 ILCS 155/3)  (from Ch. 73, par. 1403)


    Sec. 3. As used in this Act, the words and phrases 
following shall
have the following meanings unless the context 
requires otherwise:

    (1) "Title insurance business" or "business of title 
insurance" means:


        (A) Issuing as insurer or offering to issue as insurer 
    title insurance;
and


        (B) Transacting or proposing to transact one or more of 
    the following
activities when
conducted or performed in 
    contemplation of or in conjunction with the issuance
of 
    title insurance;


            (i) soliciting or negotiating the issuance of 
        title insurance;


            (ii) guaranteeing, warranting, or otherwise 
        insuring the correctness of
title
searches for all 
        instruments affecting titles to real property, any 
        interest in
real property, cooperative units and 
        proprietary leases, and for all liens or
charges 
        affecting the same;


            (iii) handling of escrows, settlements, or 
        closings;


            (iv) executing title insurance policies;


            (v) effecting contracts of reinsurance;


            (vi) abstracting, searching, or examining titles; 
        or


            (vii) issuing insured closing letters or closing 
        protection letters;


        (C) Guaranteeing, warranting, or insuring searches or 
    examinations of
title to real property or any interest in 
    real property, with the exception of
preparing an 
    attorney's opinion of title; or


        (D) Guaranteeing or warranting the status of title as 
    to ownership of or
liens on real property and personal 
    property by any person other than the
principals to the 
    transaction; or


        (E) Doing or proposing to do any business substantially 
    equivalent to any
of the activities listed in this 
    subsection,
provided that the preparation of an attorney's 
    opinion
of title pursuant to paragraph (1)(C) is not 
    intended to be within the
definition of "title insurance 
    business" or "business of title insurance".

    (1.5) "Title insurance" means insuring, guaranteeing, 
warranting, or
indemnifying owners of real or personal property 
or the holders of liens or
encumbrances thereon or others 
interested therein against loss or damage
suffered by reason of 
liens, encumbrances upon, defects in, or the
unmarketability of 
the title to the property; the invalidity or
unenforceability 
of any liens or encumbrances thereon; or doing any business in

substance equivalent to any of the foregoing.
"Warranting" for 
purpose of this provision shall not
include any warranty 
contained in instruments of encumbrance or conveyance.
Title 
insurance is a single line form of insurance, also known as 
monoline. An attorney's opinion of title pursuant to paragraph 
(1)(C) is not intended to
be within the definition of "title 
insurance".

    (2) "Title insurance company" means any domestic company 
organized under
the laws of this State for the purpose of 
conducting the business of
title insurance and any title 
insurance
company organized under the laws of another State, 
the District of Columbia
or foreign government and authorized 
to transact the business of
title insurance in this State.

    (3) "Title insurance agent" means a person, firm, 
partnership,
association, corporation or other legal entity 
registered by a title
insurance company and authorized by such 
company to determine insurability
of title in accordance with 
generally acceptable underwriting rules and
standards in 
reliance on either the public records or a search package

prepared from a title plant, or both, and authorized in 
addition to do any
of the following:  act as an escrow agent, 
solicit title insurance, collect
premiums, issue title 
reports, binders or commitments to insure and
policies in its 
behalf, provided, however, the term "title insurance agent"

shall not include officers and salaried employees of any title 
insurance
company.

    (4) "Producer of title business" is any person, firm, 
partnership,
association, corporation or other legal entity 
engaged in this State in the
trade, business, occupation or 
profession of (i) buying or selling
interests in real property, 
(ii) making loans secured by interests in real
property, or 
(iii) acting as broker, agent, attorney, or representative of

natural persons or other legal entities that buy or sell 
interests in real
property or that lend money with such 
interests as security.

    (5) "Associate" is any firm, association, partnership, 
corporation or
other legal entity organized for profit in which 
a producer of title
business is a director, officer, or partner 
thereof, or owner of a
financial interest, as defined herein, 
in such entity; any legal entity
that controls, is controlled 
by, or is under common control with a producer
of title 
business; and any natural person or legal entity with whom a

producer of title business has any agreement, arrangement, or 
understanding
or pursues any course of conduct the purpose of 
which is to evade the
provisions of this Act.

    (6) "Financial interest" is any ownership interest, legal 
or beneficial,
except ownership of publicly traded stock.

    (7) "Refer" means to place or cause to be placed, or to 
exercise any
power or influence over the placing of title 
business, whether or not the
consent or approval of any other 
person is sought or obtained with respect
to the referral.

    (8) "Escrow Agent" means any title insurance company or any 
title
insurance agent, including independent contractors of 
either, acting on behalf of a title insurance company which

receives deposits, in trust, of funds or documents, or both, 
for the purpose
of effecting the sale, transfer, encumbrance or 
lease of real property to
be held by such escrow agent until 
title to the real property that is the
subject of the escrow is 
in a prescribed condition. An escrow agent conducting closings 
shall be subject to the provisions of paragraphs (1) through 
(4) of subsection (e) of Section 16 of this Act.


    (9) "Independent Escrowee" means any firm, person, 
partnership,
association, corporation or other
legal entity, 
other than a title insurance company or a title insurance

agent, which receives deposits, in trust, of funds or 
documents, or both, for
the purpose of effecting the sale, 
transfer, encumbrance or lease of real
property to be held by 
such escrowee until title to the real property that
is the 
subject of the escrow is in a prescribed condition.  Federal and

State chartered banks, savings and loan associations, credit 
unions,
mortgage bankers, banks or trust companies authorized 
to do business under
the Illinois Corporate Fiduciary Act, 
licensees under the Consumer
Installment Loan Act, real estate 
brokers licensed pursuant to the Real
Estate License Act of 
2000, as such Acts are now or hereafter amended, and
licensed 
attorneys when engaged in the attorney-client relationship are

exempt from the escrow provisions of this Act. "Independent 
Escrowee" does not include employees or independent 
contractors of a title insurance company or title insurance 
agent authorized by a title insurance company to perform 
closing, escrow, or settlement services.


    (10) "Single risk" means the insured amount of any title 
insurance
policy, except that where 2 or more title insurance 
policies are issued
simultaneously covering different estates 
in the same real property, "single
risk" means the sum of the 
insured amounts of all such title insurance
policies.  Any title 
insurance policy insuring a mortgage interest, a claim
payment 
under which reduces the insured amount of a fee or leasehold 
title
insurance policy, shall be excluded in computing the 
amount of a single
risk to the extent that the insured amount 
of the mortgage title insurance
policy does not exceed the 
insured amount of the fee or leasehold title
insurance policy.

    (11) "Department" means the Department of Financial and 
Professional Regulation.

    (12) "Secretary" means the Secretary

of Financial and 
Professional Regulation.

    (13) "Insured closing letter" or "closing protection 
letter" means
an indemnification or undertaking to a party to a 
real estate transaction, from
a principal such as a title 
insurance company or similar entity, setting forth
in writing 
the extent of the principal's responsibility for intentional

misconduct or errors in closing the real estate transaction on 
the part of a
settlement agent, such as a title insurance agent 
or other settlement service
provider.

    (14) "Residential real property" means a building or 
buildings consisting of one to 4 residential units or a 
residential condominium unit where at least one of the 
residential units or condominium units is occupied or intended 
to be occupied as a residence by the purchaser or borrower, or 
in the event that the purchaser or borrower is the trustee of a 
trust, by a beneficiary of that trust.

(Source: P.A. 94-893, eff. 6-20-06.)

 
    (215 ILCS 155/18.1  new)
    Sec. 18.1. Choice of title insurance company. It is  
declared to be the public policy of this State that parties to 
a contract for the sale of residential real property who are 
obligated to provide and pay for title insurance have the right 
to choose the title insurance company and title insurance agent 
that will provide such title insurance.  No lender or producer 
of title business, as the term is defined in this Act, shall, 
as a condition of making a loan, providing services of any 
kind, including, but not limited to, services as a broker, 
agent, lender, attorney, or otherwise, require a party to a 
contract for the sale of residential real property who is 
obligated by that contract to furnish and pay for title 
insurance at their expense, to procure title insurance from a 
title insurance company or title insurance agent other than a 
title insurance company or title insurance agent that is chosen 
by the party paying for the title insurance.
 

    Section 99. Effective date. This Act takes effect upon 
becoming law.