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Public Act 098-0832
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| SB2947 Enrolled | LRB098 19574 RPM 54764 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Title Insurance Act is amended by changing |
Section 16 as follows:
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(215 ILCS 155/16) (from Ch. 73, par. 1416)
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Sec. 16. Title insurance agents.
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(a) No person, firm, partnership, association, corporation |
or other
legal entity shall act as or hold itself out to be a |
title insurance agent
unless duly registered by a title |
insurance company with the Secretary.
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(b) Each application for registration shall be made on a |
form specified
by the Secretary and prepared in duplicate by |
each title insurance company
which the agent represents. The |
title insurance company shall retain the
copy of the |
application and forward the original to the Secretary with the
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appropriate fee.
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(c) Every applicant for registration, except a firm, |
partnership,
association, limited liability company, or |
corporation, must be 18 years or more of age. Included in every |
application for registration of a title insurance agent, |
including a firm, partnership,
association, limited liability |
company, or corporation, shall be an affidavit of the applicant |
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title insurance agent, signed and notarized in front
of a |
notary public, affirming that the applicant and every owner, |
officer, director, principal, member, or
manager of the |
applicant has never been convicted or pled guilty to any felony |
or misdemeanor involving a crime of
theft or dishonesty or |
otherwise accurately disclosing any such felony or misdemeanor |
involving a crime of
theft or dishonesty. No person who has had |
a conviction or pled guilty to any felony or
misdemeanor |
involving theft or dishonesty may be registered by a title |
insurance company without a separate written notification to |
the Secretary disclosing the conviction or plea, and no such
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person may serve as an owner, officer, director, principal, or |
manager of any registered title insurance
agent without the |
written permission of the Secretary.
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(d) Registration shall be made annually by a filing with |
the Secretary;
supplemental registrations for new title |
insurance agents to be added
between annual filings shall be |
made from time to time in the manner
provided by the Secretary; |
registrations shall remain in effect unless
revoked or |
suspended by the Secretary or
voluntarily withdrawn by the
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registrant or the title insurance company.
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(e) Funds deposited in connection with any escrows, |
settlements, or closings shall be deposited in a separate |
fiduciary trust account or accounts in a bank or other |
financial institution insured by an agency of the federal |
government unless the instructions provide otherwise. The |
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funds shall be the property of the person or persons entitled |
thereto under the provisions of the escrow, settlement, or |
closing and shall be segregated by escrow, settlement, or |
closing in the records of the escrow agent. The funds shall not |
be subject to any debts of the escrowee and shall be used only |
in accordance with the terms of the individual escrow, |
settlement, or closing under which the funds were accepted. |
Interest received on funds deposited with the escrow agent |
in connection with any escrow, settlement, or closing shall be |
paid to the depositing party unless the instructions provide |
otherwise. |
The escrow agent shall maintain separate records of all |
receipts and disbursements of escrow, settlement, or closing |
funds. |
The escrow agent shall comply with any rules adopted by the |
Secretary pertaining to escrow, settlement, or closing |
transactions. |
(f) A title insurance agent shall not act as an escrow |
agent in a nonresidential real property transaction where the |
amount of settlement funds on deposit with the escrow agent is |
less than $2,000,000 or in a residential real property |
transaction unless the title insurance agent, title insurance |
company, or another authorized title insurance agent has |
committed for the issuance of title insurance in that |
transaction and the title insurance agent is authorized to act |
as an escrow agent on behalf of the title insurance company for |
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which the commitment for title insurance has been issued. The |
authorization under the preceding sentence shall be given |
either (1) by an agency contract with the title insurance |
company which contract, in compliance with the requirements set |
forth in subsection (g) of this Section, authorizes the title |
insurance agent to act as an escrow agent on behalf of the |
title insurance company or (2) by a closing protection letter |
in compliance with the requirements set forth in Section 16.1 |
of this Act, issued by the title insurance company to the |
seller, buyer, borrower, and lender. A closing protection |
letter shall not be issued by a title insurance agent. The |
provisions of this subsection (f) shall not apply to the |
authority of a title insurance agent to act as an escrow agent |
under subsection (g) of Section 17 of this Act. |
(g) If an agency contract between the title insurance |
company and the title insurance agent is the source of the |
authority under subsection (f) of this Section for a title |
insurance agent to act as escrow agent for a real property |
transaction, then the agency contract shall provide for no less |
protection from the title insurance company to all parties to |
the real property transaction than the title insurance company |
would have provided to those parties had the title insurance |
company issued a closing protection letter in conformity with |
Section 16.1 of this Act. |
(h) A title insurance company shall be liable for the acts |
or omissions of its title insurance agent as an escrow agent if |
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the title insurance company has authorized the title insurance |
agent under subsections (f) and (g) of this Section 16 and only |
to the extent of the liability undertaken by the title |
insurance company in the agency agreement or closing protection |
letter. The liability, if any, of the title insurance agent to |
the title insurance company for acts and omissions of the title |
insurance agent as an escrow agent shall not be limited or |
otherwise modified because the title insurance company has |
provided closing protection to a party or parties to a real |
property transaction escrow, settlement, or closing. The |
escrow agent shall not charge a fee for protection provided by |
a title insurance company to parties to real property |
transactions under subsections (f) and (g) of this Section 16 |
and Section 16.1, but shall collect from the parties the fee |
charged by the title insurance company and shall promptly remit |
the fee to the title insurance company. The title insurance |
company may charge the parties a reasonable fee for protection |
provided pursuant to subsections (f) and (g) of this Section 16 |
and Section 16.1 and shall not pay any portion of the fee to |
the escrow agent. The payment of any portion of the fee to the |
escrow agent by the title insurance company, shall be deemed a |
prohibited inducement or compensation in violation of Section |
24 of this Act. |
(i) The Secretary shall adopt and amend such rules as may |
be required for the proper administration and enforcement of |
this Section 16 consistent with the federal Real Estate |