Title insurance., the official text

An act to amend Sections 12401.1 and 12401.7 of, and to repeal and add Section 12401.9 of, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL'S DIGEST

Existing law requires a title insurer, underwritten title company, or controlled escrow company to file with the Insurance Commissioner its schedules of rates, all regularly issued forms of title policies to which those rates apply, and every modification to those forms and title policies that it proposes to use in this state. Existing law requires the filings to include the effective date and the character and extent of coverages and services contemplated. Existing law prohibits a title insurer, underwritten title company, or controlled escrow company from using a rate prior to the effective date or prior to having the filing publicly displayed for less than 30 days in the office of the company in the county to where the rate applies. Existing law requires the schedule of rates to be printed or typed in type not smaller than 10 point, and requires that full copies are kept at all times available to the public and prominently displayed in a public place in every office of a title insurer, an underwritten title company, and a controlled escrow company in the county where the rates apply.
This bill would require only a title insurer to file with the commissioner its schedules of rates, all regularly issued forms of title policies to which those rates apply, and every modification to those forms and title policies that it proposes to use in this state. The bill would require a title insurer to also file its schedule of escrow rates if the title insurer conducts escrow services. The bill would additionally modify the documents controlled escrow companies and underwritten title companies are required to file. The bill would authorize the commissioner to object to a new or modified rate and prohibit that rate from becoming effective unless the commissioner’s objection is resolved.
The bill would remove the requirement that the schedule of rates be printed and modify the requirement that they be publicly available by instead requiring the schedule of rates to be made publicly available by means of a clear and conspicuous link posted on the internet website of the title insurer, underwritten title company, or controlled escrow company that has filed the rate schedule, for so long as those rates remain effective. The bill would additionally require an underwritten title company to maintain a complete copy of each title insurer’s rate schedule that the underwritten title company has used for issuing title policies for a minimum of 7 years. The bill would require a notice to be posted in the applicable office that a specified rate schedule would be readily accessible for public viewing in the office of a title insurer, underwritten title company, or controlled escrow company, upon request and as specified.

The people of the State of California do enact as follows:

SECTION 1.
Section 12401.1 of the Insurance Code is amended to read:
12401.1.
(a) A title insurer shall file with the commissioner its schedules of rates for all regularly issued forms of title policies and endorsements to the policy that it proposes to use in this state.
(1) A schedule of rates filed by a title insurer shall list the entire charge to the public for each type of title policy included within the schedule, without a separate statement of the portion of the charge, if any, based upon work performed by an underwritten title company.
(2) If the title insurer conducts escrow services, it shall also file with the commissioner its schedule of escrow rates and other services. The title insurer may file these separately.
(3) A rate filing shall include its effective date, which shall be not earlier than 30 days after its receipt by the commissioner, and shall indicate the character and extent of the coverages and services contemplated.
(4) (A) A title insurer shall also file with the commissioner every regularly issued form of title policy and endorsement to the policy, which shall not be issued until the rate for the form, if any, has become effective pursuant to Section 12401.7.
(B) A title insurer may issue, without a separate filing, any form of title policy and endorsement already filed with the commissioner by an advisory organization established pursuant to this chapter of which the title insurer is a member, provided a rate for that policy or endorsement has been filed by the title insurer and has become effective pursuant to Section 12401.7.
(b) (1) An underwritten title company or controlled escrow company shall file with the commissioner their schedule of escrow rates and other services. A filing by an underwritten title company or controlled escrow company shall include its effective date, which shall be no earlier than 30 days after its receipt by the commissioner, and shall indicate the character and extent of the services contemplated.
(2) An underwritten title company shall not be required to file the title insurance rates or forms established by a title insurer. An underwritten title company shall only charge for title insurance in compliance with the title insurer’s currently effective rate schedule.
(c) A filing by a title insurer, an underwritten title company, or a controlled escrow company shall specify any new or modified rate and include both a redline and clean version of the entire rate schedule that includes that rate. A filing of a modified form shall also include both a redline and clean version of that form. The commissioner may object to a new or modified rate if it does not meet the criteria set forth in Section 12401.3. If the commissioner objects, the rate shall not be effective unless the objection of the commissioner is resolved.
(d) Nothing in this section shall limit the authority of the commissioner to conduct a review of the existing rates of a title insurer, an underwritten title company, or a controlled escrow company pursuant to Article 6.7 (commencing with Section 12414.13) and Article 6.9 (commencing with Section 12414.20) of this chapter.

SEC. 2.
Section 12401.7 of the Insurance Code is amended to read:
12401.7.
(a) (1) A title insurer, underwritten title company, or controlled escrow company shall not use a rate in the business of title insurance prior to its effective date nor prior to the filing with respect to the rate having been made publicly available for at least 30 days.
(2) For purposes of this section, rates are considered publicly available if they are directly accessible to the public through a clear and conspicuous link to the filing on the internet website of the title insurer, underwritten title company, or controlled escrow company that filed the rate schedule in compliance with Section 12401.9.
(b) A rate increase shall not apply to title policies or services that have been contracted prior to the effective date of the increased rate.

SEC. 3.
Section 12401.9 of the Insurance Code is repealed.

SEC. 4.
Section 12401.9 is added to the Insurance Code, to read:
12401.9.
(a) The schedules of rates that are required to be filed with the commissioner under Section 12401.1 shall be made publicly available by means of a clear and conspicuous link posted on the internet website of the title insurer, underwritten title company, or controlled escrow company that has filed the rate schedule, for so long as those rates remain effective.
(b) An underwritten title company shall also post on its internet website a clear and conspicuous link to the schedule of title insurance rates of each title insurer it uses for the issuance of title policies, for so long as those rates remain effective. An underwritten title company shall additionally maintain a complete copy of each title insurer’s rate schedule that the underwritten title company has used for issuing title policies for a minimum of seven years.
(c) (1) Upon request, a rate schedule required to be posted on an internet website shall be made readily accessible for public viewing in each office of the title insurer, underwritten title company, or controlled escrow company, either in printed form or by displaying an electronic version.
(2) A title insurer, underwritten title company, or controlled escrow company subject to this section shall clearly and conspicuously display in each office, in printed type not smaller than 28 point, a notice indicating that, pursuant to California law, applicable rate schedules will be made immediately available upon request.