103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4555

 

Introduced 1/31/2024, by Rep. Ann M. Williams

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 155/3  from Ch. 73, par. 1403
215 ILCS 155/12  from Ch. 73, par. 1412
215 ILCS 155/15.2 new
215 ILCS 155/16  from Ch. 73, par. 1416
215 ILCS 155/16.2 new
215 ILCS 155/17.2 new

    Amends the Title Insurance Act. Provides that no person, firm, partnership, association, corporation, or other legal entity shall act as or hold itself out to be a title insurance agent without first procuring a certificate of authority from the Secretary of Financial and Professional Regulation (rather than unless duly registered by a title insurance company with the Secretary). Provides that a certificate of authority shall remain in effect unless revoked or suspended by the Secretary or voluntarily surrendered by the holder, or when the holder of the certificate of authority is no longer authorized as a title insurance agent of a title insurance company. Provides that every applicant that is not duly registered as a title insurance agent on the effective date of the amendatory Act shall comply with specified requirements. Sets forth provisions concerning applications for a certificate of authority and makes changes concerning the powers of the Secretary. Provides that the Secretary shall maintain a database of title insurance agents in good standing on a publicly accessible website that any person may use to verify the authority of a particular title insurance agent. Sets forth duties applicable to transactions involving residential real property for title insurance companies, title insurance agents, and independent escrowees. Makes other changes. Effective immediately.


LRB103 37017 RPS 67132 b

 

 

A BILL FOR

 

HB4555LRB103 37017 RPS 67132 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Title Insurance Act is amended by changing
5Sections 3, 12, and 16 and by adding Sections 15.2, 16.2, and
617.2 as follows:
 
7    (215 ILCS 155/3)  (from Ch. 73, par. 1403)
8    Sec. 3. As used in this Act, the words and phrases
9following shall have the following meanings unless the context
10requires otherwise:
11    (1) "Title insurance business" or "business of title
12insurance" means:
13        (A) Issuing as insurer or offering to issue as insurer
14    title insurance; and
15        (B) Transacting or proposing to transact one or more
16    of the following activities when conducted or performed in
17    contemplation of or in conjunction with the issuance of
18    title insurance;
19            (i) soliciting or negotiating the issuance of
20        title insurance;
21            (ii) guaranteeing, warranting, or otherwise
22        insuring the correctness of title searches for all
23        instruments affecting titles to real property, any

 

 

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1        interest in real property, cooperative units and
2        proprietary leases, and for all liens or charges
3        affecting the same;
4            (iii) handling of escrows, settlements, or
5        closings;
6            (iv) executing title insurance policies;
7            (v) effecting contracts of reinsurance;
8            (vi) abstracting, searching, or examining titles;
9        or
10            (vii) issuing insured closing letters or closing
11        protection letters;
12        (C) Guaranteeing, warranting, or insuring searches or
13    examinations of title to real property or any interest in
14    real property, with the exception of preparing an
15    attorney's opinion of title; or
16        (D) Guaranteeing or warranting the status of title as
17    to ownership of or liens on real property and personal
18    property by any person other than the principals to the
19    transaction; or
20        (E) Doing or proposing to do any business
21    substantially equivalent to any of the activities listed
22    in this subsection, provided that the preparation of an
23    attorney's opinion of title pursuant to paragraph (1)(C)
24    is not intended to be within the definition of "title
25    insurance business" or "business of title insurance".
26    (1.5) "Title insurance" means insuring, guaranteeing,

 

 

HB4555- 3 -LRB103 37017 RPS 67132 b

1warranting, or indemnifying owners of real or personal
2property or the holders of liens or encumbrances thereon or
3others interested therein against loss or damage suffered by
4reason of liens, encumbrances upon, defects in, or the
5unmarketability of the title to the property; the invalidity
6or unenforceability of any liens or encumbrances thereon; or
7doing any business in substance equivalent to any of the
8foregoing. "Warranting" for purpose of this provision shall
9not include any warranty contained in instruments of
10encumbrance or conveyance. Title insurance is a single line
11form of insurance, also known as monoline. An attorney's
12opinion of title pursuant to paragraph (1)(C) is not intended
13to be within the definition of "title insurance".
14    (2) "Title insurance company" means any domestic company
15organized under the laws of this State for the purpose of
16conducting the business of title insurance and any title
17insurance company organized under the laws of another State,
18the District of Columbia or foreign government and authorized
19to transact the business of title insurance in this State.
20    (3) "Title insurance agent" means a person, firm,
21partnership, association, corporation, or other legal entity
22that is the holder of a certificate of authority provided
23pursuant to Section 16 and that is authorized registered by a
24title insurance company to solicit title insurance, collect
25title insurance premiums and endorsement charges, perform core
26title services, and, if authorized by a title insurance

 

 

HB4555- 4 -LRB103 37017 RPS 67132 b

1company, and authorized by such company to determine
2insurability of title in accordance with generally acceptable
3underwriting rules and standards in reliance on either the
4public records or a search package prepared from a title
5plant, or both, and authorized by such title insurance company
6in addition to do any of the following: act as an escrow agent
7pursuant to Sections subsections (f), (g), and (h) of Section
816, 16.1, and 16.2 of this Act. "Title , solicit title
9insurance, collect premiums, or issue title insurance
10commitments, policies, and endorsements of the title insurance
11company; provided, however, the term "title insurance agent"
12does shall not include officers and salaried employees of any
13title insurance company.
14    (4) "Producer of title business" is any person, firm,
15partnership, association, corporation or other legal entity
16engaged in this State in the trade, business, occupation or
17profession of (i) buying or selling interests in real
18property, (ii) making loans secured by interests in real
19property, or (iii) acting as broker, agent, attorney, or
20representative of natural persons or other legal entities that
21buy or sell interests in real property or that lend money with
22such interests as security.
23    (5) "Associate" is any firm, association, partnership,
24corporation or other legal entity organized for profit in
25which a producer of title business is a director, officer, or
26partner thereof, or owner of a financial interest, as defined

 

 

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1herein, in such entity; any legal entity that controls, is
2controlled by, or is under common control with a producer of
3title business; and any natural person or legal entity with
4whom a producer of title business has any agreement,
5arrangement, or understanding or pursues any course of conduct
6the purpose of which is to evade the provisions of this Act.
7    (6) "Financial interest" is any ownership interest, legal
8or beneficial, except ownership of publicly traded stock.
9    (7) "Refer" means to place or cause to be placed, or to
10exercise any power or influence over the placing of title
11business, whether or not the consent or approval of any other
12person is sought or obtained with respect to the referral.
13    (8) "Escrow Agent" means any title insurance company or
14any title insurance agent, including independent contractors
15of either, acting on behalf of a title insurance company,
16which receives deposits, in trust, of funds or documents, or
17both, for the purpose of effecting the sale, transfer,
18encumbrance or lease of real property to be held by such escrow
19agent until title to the real property that is the subject of
20the escrow is in a prescribed condition. An escrow agent
21conducting closings shall be subject to the provisions of
22Sections paragraphs (1) through (4) of subsection (e) of
23Section 16, 16.1, and 16.2 of this Act.
24    (9) "Independent Escrowee" means any firm, person,
25partnership, association, corporation or other legal entity,
26other than a title insurance company or a title insurance

 

 

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1agent, which receives deposits, in trust, of funds or
2documents, or both, for the purpose of effecting the sale,
3transfer, encumbrance or lease of real property to be held by
4such escrowee until title to the real property that is the
5subject of the escrow is in a prescribed condition. Federal
6and State chartered banks, savings and loan associations,
7credit unions, mortgage bankers, banks or trust companies
8authorized to do business under the Illinois Corporate
9Fiduciary Act, licensees under the Consumer Installment Loan
10Act, real estate brokers licensed pursuant to the Real Estate
11License Act of 2000, as such Acts are now or hereafter amended,
12and licensed attorneys when engaged in the attorney-client
13relationship are exempt from the escrow provisions of this
14Act. "Independent Escrowee" does not include employees or
15independent contractors of a title insurance company or title
16insurance agent authorized by a title insurance company to
17perform closing, escrow, or settlement services.
18    (10) "Single risk" means the insured amount of any title
19insurance policy, except that where 2 or more title insurance
20policies are issued simultaneously covering different estates
21in the same real property, "single risk" means the sum of the
22insured amounts of all such title insurance policies. Any
23title insurance policy insuring a mortgage interest, a claim
24payment under which reduces the insured amount of a fee or
25leasehold title insurance policy, shall be excluded in
26computing the amount of a single risk to the extent that the

 

 

HB4555- 7 -LRB103 37017 RPS 67132 b

1insured amount of the mortgage title insurance policy does not
2exceed the insured amount of the fee or leasehold title
3insurance policy.
4    (11) "Department" means the Department of Financial and
5Professional Regulation.
6    (12) "Secretary" means the Secretary of Financial and
7Professional Regulation.
8    (13) "Insured closing letter" or "closing protection
9letter" means an indemnification or undertaking to a party to
10a real property transaction, from a principal such as a title
11insurance company, setting forth in writing the extent of the
12principal's responsibility for intentional misconduct or
13errors in closing the real property transaction on the part of
14a settlement agent, such as a title insurance agent or other
15settlement service provider, or an indemnification or
16undertaking given by a title insurance company or an
17independent escrowee setting forth in writing the extent of
18the title insurance company's or independent escrowee's
19responsibility to a party to a real property transaction which
20indemnifies the party against the intentional misconduct or
21errors in closing the real property transaction on the part of
22the title insurance company or independent escrowee and
23includes protection afforded pursuant to subsections (p), (q),
24and (r) (f), (g), and (h) of Section 16, Section 16.1,
25subsection (h) of Section 17, and Section 17.1 of this Act even
26if such protection is afforded by contract.

 

 

HB4555- 8 -LRB103 37017 RPS 67132 b

1    (14) "Residential real property" means a building or
2buildings consisting of one to 4 residential units or a
3residential condominium unit where at least one of the
4residential units or condominium units is occupied or intended
5to be occupied as a residence by the purchaser or borrower, or
6in the event that the purchaser or borrower is the trustee of a
7trust, by a beneficiary of that trust.
8    (15) "Financial institution" means any bank subject to the
9Illinois Banking Act, any savings and loan association subject
10to the Illinois Savings and Loan Act of 1985, any savings bank
11subject to the Savings Bank Act, any credit union subject to
12the Illinois Credit Union Act, and any federally chartered
13commercial bank, savings and loan association, savings bank,
14or credit union organized and operated in this State pursuant
15to the laws of the United States.
16    (16) "Core title services" means the performance of the
17following services, for which liability shall arise, and that
18is separate from and is not duplicative of any other
19professional service, including, without limitation, the
20practice of law and the performance of services as a real
21estate licensee:
22        (A) review and evaluation of title, tax, judgment,
23    lien, and other searches or search products, private title
24    plant records, records of grantor-grantee and other
25    indices, public records and other records, and any other
26    information and materials which are relevant to a

 

 

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1    particular property and transaction to determine
2    insurability of title to the property;
3        (B) issuing or causing to be issued the title
4    commitments on behalf of a title insurance company,
5    including the determination of the conditions under which
6    the title insurance company will issue the title insurance
7    policies required in a particular transaction;
8        (C) determination as to whether, in accordance with
9    applicable law and the title insurance company's
10    underwriting requirements, principles, or guidelines,
11    underwriting objections stated on the title insurance
12    commitments may be cleared and the circumstances under
13    which the objections will be waived or insured before
14    issuance of the title insurance policies; and
15        (D) issuing or causing to be issued the title
16    insurance policies required in a particular transaction
17    when all conditions for the issuance have been satisfied.
18    (17) "Title search" means any abstract of title, tract,
19tax, judgment, or lien searches, limited purpose searches,
20other searches and search products, private title plant
21records, records of grantor-grantee and other indices, public
22records and other records, property inspections, records
23related to the status of title to land, and other information
24and materials that are relevant to a particular residential
25real property and transactions relating to that residential
26real property.

 

 

HB4555- 10 -LRB103 37017 RPS 67132 b

1(Source: P.A. 100-485, eff. 9-8-17.)
 
2    (215 ILCS 155/12)  (from Ch. 73, par. 1412)
3    Sec. 12. Examinations; compliance.
4    (a) The Secretary or the Secretary's his authorized
5representative shall have the power and authority, and it
6shall be his duty, to cause to be visited and examined annually
7any title insurance company doing business under this Act, and
8to verify and compel compliance with the provisions of law
9governing it.
10    (b) The Secretary or the Secretary's his authorized
11representative agent shall have power and authority to visit
12and examine the records specifically pertaining to the
13services provided under this Act of any title insurance agent,
14but not including files pertaining to the title insurance
15agent's practice of law, if applicable, and to verify and
16compel compliance with the provisions of this Act compel
17compliance with the provisions of this Act and shall, only
18upon the showing of good cause, require any title insurance
19company to take all legal means to obtain the appropriate
20records of its registered agents and make them available for
21examination at a time and place designated by the Secretary.
22Expenses incurred in the course of such examinations will be
23the responsibility of the title insurance company. In the
24event that a present or former registered agent or its
25successor refuses or is unable to cooperate with a title

 

 

HB4555- 11 -LRB103 37017 RPS 67132 b

1insurance company in furnishing the records requested by the
2Secretary or his or her authorized agent, then the Secretary
3or his or her authorized agent shall have the power and
4authority to obtain those records directly from the registered
5agent.
6    (c) The Secretary or the Secretary's authorized
7representative shall have the power and authority to visit and
8examine the records specifically pertaining to the services
9provided under this Act of any independent escrowee and to
10verify and compel compliance with the provisions of this Act.
11(Source: P.A. 94-893, eff. 6-20-06.)
 
12    (215 ILCS 155/15.2 new)
13    Sec. 15.2. Title insurance company duties.
14    (a) This Section applies only to transactions involving
15residential real property.
16    (b) In the conduct of its title insurance business, every
17title insurance company shall:
18        (1) Post and publish its current rates and charges
19    associated with its title insurance business with a clear
20    and complete description thereof, including, without
21    limitation, title insurance premiums, endorsements to
22    policies, fees for services as an escrow agent, and all
23    other services and products it provides, conspicuously in
24    its offices and on its websites, social media, and
25    digital, electronic, online, and other platforms and

 

 

HB4555- 12 -LRB103 37017 RPS 67132 b

1    places that are intended to be visited or viewed by the
2    public. Title insurance companies must also provide their
3    registered title insurance agents with the posted and
4    published rates and charges. A title insurance company
5    must not make a charge that exceeds its published rates
6    and charges. This subsection (b) does not apply to special
7    risk title insurance and endorsement premiums, general
8    advertising, and marketing in media not controlled by the
9    title insurance company, but any such advertising shall
10    contain information, such as an Internet web address or a
11    hyperlink, to a website where the published rates and
12    charges can be viewed by the public.
13        (2) Require all of its title insurance agents to
14    perform, at a minimum in each transaction, all core title
15    services as a condition to that title insurance agent's
16    compensation as set forth in the agency contract, and may
17    not interfere with, assume in whole or in part, or prevent
18    the title insurance agent's performance of any core title
19    service.
20        (3) Agree upon the terms of the agency in writing with
21    its title insurance agents; the terms shall include that
22    the title insurance agent must perform, at a minimum, all
23    core title services as a condition of the title insurance
24    agent's compensation for each title insurance product and
25    endorsement issued and the compensation that the title
26    insurance agent shall receive for the performance of such

 

 

HB4555- 13 -LRB103 37017 RPS 67132 b

1    core title services. Compensation to the title insurance
2    agent for the performance of core title services shall be
3    as stated in the written agency contract.
4        (4) Share title insurance premiums and endorsement
5    charges only with its title insurance agent performing the
6    core title services in a transaction.
7        (5) Agree in writing with any title insurance agent to
8    which the title insurance company provides products or
9    services that are not core title services but are related
10    to the title insurance agent's performance of core title
11    services and are included in the cost of the title
12    insurance premiums and endorsements, such as, if
13    applicable, title searches, underwriting research
14    assistance, quality control, document recording, retention
15    of title documentation, commitment and policy typing, or
16    other products and services to the title insurance agent.
17    The written agreement must set forth, at a minimum, a
18    description of the products and services to be provided
19    and the compensation to be paid for such products and
20    services. Such compensation must be commensurate with the
21    actual value of the products and services.
22        (6) Retain any remedy or right of action against its
23    title insurance agent as provided in any law, rule, or
24    regulation for the title insurance agent's failure to
25    perform its obligations under the written agency contract,
26    underwriting requirements, or otherwise as provided by

 

 

HB4555- 14 -LRB103 37017 RPS 67132 b

1    law.
2    (c) In any residential real property transaction in which
3a title insurance company acts as an escrow agent pursuant to
4any provision in this Act:
5        (1) A title insurance company's current rates and
6    charges for its products and services rendered as an
7    escrow agent must be included in the posting and
8    publication provided for in subsection (b).
9        (2) A title insurance company shall disburse all title
10    insurance premiums and endorsement charges as directed by
11    the title insurance agent performing core title services
12    under Section 16.2 at the time of settlement or closing.
13    The disbursements shall be in accordance with the written
14    agency or other contracts between the title insurance
15    agent and the title insurance company acting as the escrow
16    agent in the transaction and the distributions shall be
17    clearly and unambiguously disclosed on any applicable
18    closing disclosure or settlement statement and delivered
19    to the parties to the transaction at the time of closing or
20    settlement.
21        (3) A title insurance company shall not share or allow
22    to be shared, either directly or indirectly, any of its
23    compensation for its service as an escrow agent or other
24    products or services with any title insurance agent except
25    as provided in this Section. Any payment that is contrary
26    to this paragraph (3) is a prohibited inducement or

 

 

HB4555- 15 -LRB103 37017 RPS 67132 b

1    compensation for a referral in violation of Section 24.
2    (d) Nothing in this Section shall be construed to restrict
3or impair a title insurance company's right or ability to
4determine and promulgate its underwriting requirements,
5principles, and conditions for insuring any risk that would be
6covered in a policy of insurance or an endorsement to a policy,
7or to educate, instruct, or inform its title insurance agents
8as to its underwriting requirements generally or in a
9particular transaction or otherwise. Nothing in this Section
10shall be construed to restrict or impair a title insurance
11company's right or ability to determine and charge special
12risk title insurance and endorsement premiums that are
13different from the posted or published rates and premiums, or
14to waive or vary from its title insurance underwriting
15requirements, principles, and conditions for insuring any risk
16that would be covered in a policy of insurance or an
17endorsement to a policy in any given case as it, in its sole
18discretion, may decide. Special risk title insurance and
19endorsement premiums shall not be shared with any other party.
 
20    (215 ILCS 155/16)  (from Ch. 73, par. 1416)
21    Sec. 16. Title insurance agents.
22    (a) No person, firm, partnership, association,
23corporation, or other legal entity shall act as or hold itself
24out to be a title insurance agent without first procuring a
25certificate of authority from the Secretary. A certificate of

 

 

HB4555- 16 -LRB103 37017 RPS 67132 b

1authority shall remain in effect unless revoked or suspended
2by the Secretary, voluntarily surrendered by the holder, or
3the holder of the certificate of authority is no longer
4authorized as a title insurance agent of a title insurance
5company unless duly registered by a title insurance company
6with the Secretary.
7    (b) Each application for a certificate of authority
8registration shall be made on a form specified by the
9Secretary and prepared by each title insurance company which
10the agent represents. The title insurance company shall retain
11the copy of the application and forward a copy to the
12Secretary.
13    (c) Every applicant for a certificate of authority
14registration, except a firm, partnership, association, limited
15liability company, or corporation, must be 18 years or more of
16age. Included in every application for a certificate of
17authority registration of a title insurance agent, including a
18firm, partnership, association, limited liability company, or
19corporation, shall be an affidavit of the applicant title
20insurance agent, signed and notarized in front of a notary
21public, affirming that the applicant and every owner, officer,
22director, principal, member, or manager of the applicant has
23never been convicted or pled guilty to any felony or
24misdemeanor involving a crime of theft or dishonesty or
25otherwise accurately disclosing any such felony or misdemeanor
26involving a crime of theft or dishonesty, and that the

 

 

HB4555- 17 -LRB103 37017 RPS 67132 b

1applicant and every owner, officer, director, principal,
2member, or manager of the applicant has never been adjudicated
3by any tribunal to be civilly liable to any party based on a
4finding involving theft or dishonesty. No person who has had a
5conviction or pled guilty to any felony or misdemeanor or who
6has been adjudicated by any tribunal to be civilly liable to
7any party based on a finding involving theft or dishonesty may
8qualify for a certificate of authority be registered by a
9title insurance company without a written notification to the
10Secretary disclosing the conviction or plea, and no such
11person may serve as an owner, officer, director, principal, or
12manager of any registered title insurance agent without the
13written permission of the Secretary.
14    (d) Every individual applicant that is not duly registered
15as a title insurance agent on the effective date of this
16amendatory Act of the 103rd General Assembly shall:
17Registration shall be made annually by a filing with the
18Secretary; supplemental registrations for new title insurance
19agents to be added between annual filings shall be made from
20time to time in the manner provided by the Secretary;
21registrations shall remain in effect unless revoked or
22suspended by the Secretary or voluntarily withdrawn by the
23registrant or the title insurance company.
24        (1) Successfully complete a 4-year course of study in
25    a high school or secondary school approved by the state in
26    which the school is located, or possess a State of

 

 

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1    Illinois High School Diploma, which shall be verified
2    under oath by the applicant.
3        (2) Pass an examination that is designed to determine
4    the competency of the applicant to conduct the business of
5    a title agent and knowledge of basic real property law and
6    title insurance procedures. The applicant shall file with
7    its application satisfactory proof that the applicant has
8    passed the competency examination. The Department shall
9    have the authority to adopt administrative rules to
10    approve testing providers, establish the testing
11    procedures, including, but not limited to, the
12    requirements for passing the examination, and the content
13    of the examination that shall, at a minimum, determine the
14    competency of an applicant in the following subject
15    matters and any other subject matter which the Secretary
16    may determine to be basic and essential to the competent
17    conduct of the business of a title insurance agent, which
18    must include, at a minimum:
19            (i) the Title Insurance Act and its requirements;
20            (ii) Illinois real property law, including, but
21        not limited to, forms of ownership, conveyancing,
22        testate or intestate succession of title, taxes,
23        judgments, liens, surveys;
24            (iii) basic knowledge of the federal Real Estate
25        Settlement Procedures Act;
26            (iv) core title services; and

 

 

HB4555- 19 -LRB103 37017 RPS 67132 b

1            (v) title examinations and methods, title
2        objections, policy and endorsement forms, waivers of
3        policy exceptions, and escrow procedures.
4    Any applicant that is a firm, partnership, association,
5corporation, or other legal entity shall fulfill the
6examination requirement of paragraph (2) of this subsection
7(d) by an officer of the entity that owns an equity interest in
8the entity and that has managerial authority in the entity.
9    (e) The requirements of subsection (d) do not apply to
10applicants who are admitted to practice law by the Supreme
11Court of Illinois and who are in active standing or to
12applicants that have earned the Illinois Land Title
13Association's "Illinois Title Professional" designation.
14    (f) The Secretary shall issue a certificate of authority
15to conduct business as a title insurance agent upon
16determination that an applicant has passed the required
17examination and is otherwise in compliance with this Act and
18all applicable laws. The certificate of authority provided for
19in this Section shall be renewed every 2 years upon the payment
20of a certificate of authority renewal fee in an amount
21determined by the Secretary pursuant to the rulemaking
22authority under subsection (s).
23    (g) Any title insurance agent who is registered on the
24effective date of this amendatory Act of the 103rd General
25Assembly may continue to conduct the business of title
26insurance as a title insurance agent for a period of one year

 

 

HB4555- 20 -LRB103 37017 RPS 67132 b

1after the effective date of this amendatory Act of the 103rd
2General Assembly and shall be issued a certificate of
3authority upon the filing by a title insurance company with
4the Secretary a written agency agreement that complies with
5this Act within 90 days after the effective date of this
6amendatory Act of the 103rd General Assembly.
7    (h) A title insurance company shall annually file with the
8Secretary a list of all title insurance agents authorized to
9conduct the business of title insurance as an agent of the
10title insurance company. Supplemental filings for new title
11insurance agents to be added between annual filings shall be
12made from time to time in the manner provided by the Secretary.
13A title insurance company shall immediately notify the
14Secretary of any title insurance agent whose agency has been
15terminated, and shall immediately file with the Secretary any
16new title insurance agency agreement that replaces an
17agreement already on file or that has been revised or amended
18in any way.
19    (i) The Secretary shall maintain a database of title
20insurance agents in good standing on a publicly accessible
21website that any person may use to verify the authority of a
22particular title insurance agent.
23    (j) (e) Funds deposited in connection with any escrows,
24settlements, or closings shall be deposited into in a separate
25fiduciary trust account or accounts in a bank or other
26financial institution insured by an agency of the federal

 

 

HB4555- 21 -LRB103 37017 RPS 67132 b

1government unless the instructions provide otherwise. The
2funds shall be the property of the person or persons entitled
3thereto under the provisions of the escrow, settlement, or
4closing and shall be segregated by escrow, settlement, or
5closing in the records of the escrow agent. The funds shall not
6be subject to any debts of the escrowee and shall be used only
7in accordance with the terms of the individual escrow,
8settlement, or closing under which the funds were accepted.
9    Interest received on funds deposited with the escrow agent
10in connection with any escrow, settlement, or closing shall be
11paid to the depositing party unless the instructions provide
12otherwise.
13    The escrow agent shall maintain separate records of all
14receipts and disbursements of escrow, settlement, or closing
15funds.
16    The escrow agent shall comply with any rules adopted by
17the Secretary pertaining to escrow, settlement, or closing
18transactions.
19    (k) A title insurance agent shall not act as an escrow
20agent in a residential real property transaction unless the
21title insurance agent files with the Secretary and the
22Secretary approves cash or bonds of the United States, this
23State, or any body politic of this State in the amounts
24specified in subsection (l). The deposit is not to be
25otherwise pledged or subject to distribution among creditors,
26owners of equity, or stockholders until all claims of escrow

 

 

HB4555- 22 -LRB103 37017 RPS 67132 b

1depositors have been paid in full or discharged, reinsured, or
2otherwise assumed by a title insurance company authorized to
3do business under this Act. The cash, bonds, and securities so
4deposited may be exchanged for other such securities. No such
5cash, bond, or security shall be sold or transferred by the
6Secretary except on order of the circuit court or as provided
7in subsection (o). The company shall be permitted to receive
8from the Secretary the interest on the deposit as long as the
9company depositing such securities remains solvent.
10    (l) The deposit required under subsection (k) must have a
11then-current value of $500,000. For title insurance agents
12that act as an escrow agent exclusively for transactions
13involving residential real property in counties having
14populations of fewer than 500,000, the deposit required under
15subsection (k) must have a then-current value of $250,000. All
16deposits shall be held for the benefit of any named party to a
17written escrow it accepted. The deposit is not to be otherwise
18pledged or subject to distribution among creditors or
19stockholders.
20    (m) The Secretary may provide for custody of the deposits
21by any trust company or bank located in this State and
22qualified to do business under the Corporate Fiduciary Act.
23The compensation, if any, of such custodian shall be paid by
24the depositing company. When the required deposits have been
25made by a title insurance agent that intends to act as an
26escrow agent in any residential real property transaction, the

 

 

HB4555- 23 -LRB103 37017 RPS 67132 b

1Secretary shall certify that the title insurance agent has
2complied with the provisions of this Section and is authorized
3to transact the business of a title insurance agent acting as
4an escrow agent in residential real property transactions.
5    (n) Before doing business in the State of Illinois in a
6residential real property transaction, an escrow agent must
7file with and have approved by the Secretary proof of a
8fidelity bond in the minimum amount of $1,000,000 per
9occurrence, errors and omissions insurance in the minimum
10amount of $1,000,000 per occurrence, and cybercrime insurance
11coverage in the minimum amount of $500,000 per occurrence. The
12insurance policies required shall be issued by insurers that
13are authorized to conduct such insurance business in the State
14of Illinois. The title insurance agent may not conduct title
15insurance business as an escrow agent unless the deposit,
16fidelity bond, errors and omissions insurance, and cybercrime
17insurance coverage required by this Section are continuously
18maintained.
19    (o) The Secretary may revoke the certificate of authority
20of a title insurance agent acting as an escrow agent that fails
21to maintain the deposit, fidelity bond, errors and omissions
22insurance, or cybercrime insurance coverage required by this
23Section. The Secretary shall give notice of that revocation to
24such title insurance agent as provided by this Act, and,
25during the time of the revocation, the title insurance agent
26may not conduct any title insurance business as an escrow

 

 

HB4555- 24 -LRB103 37017 RPS 67132 b

1agent. A revocation shall not be set aside until the title
2insurance agent has filed with and has been approved by the
3Secretary in accordance with the requirements of this Section
4and the title insurance agent is otherwise in compliance with
5this Act, or until the title insurance agent ceases to do
6business as an escrow agent.
7    (p) (f) A title insurance agent shall not act as an escrow
8agent in a nonresidential real property transaction where the
9amount of settlement funds on deposit with the escrow agent is
10less than $2,000,000 or in a residential real property
11transaction unless the title insurance agent, title insurance
12company, or another authorized title insurance agent has
13committed for the issuance of title insurance in that
14transaction and the title insurance agent is authorized to act
15as an escrow agent on behalf of the title insurance company for
16which the commitment for title insurance has been issued. The
17authorization under the preceding sentence shall be given
18either (1) by an agency contract with the title insurance
19company which contract, in compliance with the requirements
20set forth in subsection (q) (g) of this Section, authorizes
21the title insurance agent to act as an escrow agent on behalf
22of the title insurance company or (2) by a closing protection
23letter in compliance with the requirements set forth in
24Section 16.1 of this Act, issued by the title insurance
25company to the seller, buyer, borrower, and lender. A closing
26protection letter shall not be issued by a title insurance

 

 

HB4555- 25 -LRB103 37017 RPS 67132 b

1agent. The provisions of this subsection (f) shall not apply
2to the authority of a title insurance agent to act as an escrow
3agent under subsection (g) of Section 17 of this Act.
4    (q) (g) If an agency contract between the title insurance
5company and the title insurance agent is the source of the
6authority under subsection (p) (f) of this Section for a title
7insurance agent to act as escrow agent for a real property
8transaction, then the agency contract shall provide for no
9less protection from the title insurance company to all
10parties to the real property transaction than the title
11insurance company would have provided to those parties had the
12title insurance company issued a closing protection letter in
13conformity with Section 16.1 of this Act.
14    (r) (h) A title insurance company shall be liable for the
15acts or omissions of its title insurance agent as an escrow
16agent if the title insurance company has authorized the title
17insurance agent under subsections (p) and (q) (f) and (g) of
18this Section 16 and only to the extent of the liability
19undertaken by the title insurance company in the agency
20agreement or closing protection letter. The liability, if any,
21of the title insurance agent to the title insurance company
22for acts and omissions of the title insurance agent as an
23escrow agent shall not be limited or otherwise modified
24because the title insurance company has provided closing
25protection to a party or parties to a real property
26transaction escrow, settlement, or closing. The escrow agent

 

 

HB4555- 26 -LRB103 37017 RPS 67132 b

1shall not charge a fee for protection provided by a title
2insurance company to parties to real property transactions
3under subsections (p) and (q) (f) and (g) of this Section 16
4and Section 16.1, but shall collect from the parties the fee
5charged by the title insurance company and shall promptly
6remit the fee to the title insurance company. The title
7insurance company may charge the parties a reasonable fee for
8protection provided pursuant to subsections (p) and (q) (f)
9and (g) of this Section 16 and Section 16.1 and shall not pay
10any portion of the fee to the escrow agent. The payment of any
11portion of the fee to the escrow agent by the title insurance
12company, shall be deemed a prohibited inducement or
13compensation in violation of Section 24 of this Act.
14    (s) (i) The Secretary shall adopt and amend such rules as
15may be required for the proper administration and enforcement
16of this Section 16 consistent with the federal Real Estate
17Settlement Procedures Act and Section 24 of this Act,
18including the proper administration of the licensing and
19examination of applicants, the retention of third-party
20licensing and competency examination entities if the Secretary
21deems such retention to be reasonable, necessary, and proper,
22and application, licensing, and renewal fees sufficient to
23offset the costs of the implementation, administration, and
24enforcement of the provisions of this Section. The Department
25shall adopt such rules as the Secretary deems necessary
26promptly after the effective date of this amendatory Act of

 

 

HB4555- 27 -LRB103 37017 RPS 67132 b

1the 103rd General Assembly.
2    (t) Notwithstanding any other provision of this amendatory
3Act of the 103rd General Assembly, the examination
4requirements of paragraph (2) of subsection (d) shall take
5effect on the date that final rules for implementation of
6provisions described in subsection (s) take effect.
7(Source: P.A. 98-398, eff. 1-1-14; 98-832, eff. 1-1-15;
899-104, eff. 1-1-16.)
 
9    (215 ILCS 155/16.2 new)
10    Sec. 16.2. Title insurance agent duties.
11    (a) This Section shall apply only to transactions
12involving residential real property.
13    (b) In the conduct of its title insurance business, every
14title insurance agent shall:
15        (1) Post and publish the current rates and charges of
16    each of its title insurance company principals, as
17    provided by the title insurance company, conspicuously in
18    its offices and on its websites, social media, and
19    digital, electronic, online, and other platforms and
20    places that are intended to be visited or viewed by the
21    public. A title insurance agent shall not make a charge
22    that exceeds the published rates and charges. This
23    subsection (b) does not apply to special risk title
24    insurance and endorsements premiums, general advertising,
25    and marketing in media not controlled by the title

 

 

HB4555- 28 -LRB103 37017 RPS 67132 b

1    insurance agent, but any such advertising shall contain
2    information, such as an Internet web address or a
3    hyperlink, to a website where such published rates and
4    charges can be viewed by the public.
5        (2) Agree upon the terms of the agency in writing with
6    each title insurance company for which it is a registered
7    agent; the terms shall include that the title insurance
8    agent must perform, at a minimum, all core title services
9    as a condition of the title insurance agent's compensation
10    for each title insurance product and endorsement issued,
11    and the compensation that the title insurance agent shall
12    receive for the performance of such core title services.
13    Compensation received by the title insurance agent for the
14    performance of core title services shall not exceed that
15    which is stated in the written agency contract.
16        (3) Enter into an agreement in writing with any escrow
17    agent or title insurance agent that provides products or
18    services that are not core title services but that are
19    related to the title insurance agent's performance of core
20    title services and are included in the title insurance and
21    endorsements premiums, such as, if applicable, title
22    searches, underwriting research assistance, quality
23    control, document recording, retention of title
24    documentation, commitment and policy typing, or other
25    products and services to the title insurance agent; the
26    agreement shall set forth, at a minimum, a description of

 

 

HB4555- 29 -LRB103 37017 RPS 67132 b

1    the product and services to be provided, the compensation
2    to be paid for such products and services, and the
3    conditions for which the products and services are
4    necessary. Such compensation shall be commensurate with
5    the actual value of such products and services.
6        (4) Perform, at a minimum, all core title services as
7    a condition of its compensation as set forth in the agency
8    agreement.
9        (5) Direct the escrow agent or independent escrowee as
10    to the disbursement at the time of settlement or closing
11    of title insurance premiums and endorsement charges to the
12    title insurance company in accordance with its agency
13    contract and to the escrow agent in accordance with its
14    written agreement. All such disbursements shall be clearly
15    and unambiguously disclosed on any applicable closing
16    disclosure and settlement statement and delivered to the
17    parties to the transaction at the time of closing or
18    settlement.
19        (6) Not share or allow to be shared, either directly
20    or indirectly, any of its compensation for any products or
21    services charged directly to a party in the transaction
22    with any other title insurance agent except as provided in
23    this Section. Any payment that is contrary to this
24    paragraph (6) is a prohibited inducement or compensation
25    for a referral in violation of Section 24.
26    (c) In any transaction in which a title insurance agent

 

 

HB4555- 30 -LRB103 37017 RPS 67132 b

1acts as an escrow agent pursuant to Sections 16, 16.1, and 16.2
2of this Act or any other provision in this Act:
3        (1) The title insurance agent's current rates and
4    charges for its products and services rendered as an
5    escrow agent shall be included in the posting and
6    publication provided for in subsection (b). An escrow
7    agent shall not make any charge that exceeds its published
8    rates and charges.
9        (2) The escrow agent shall disburse all title
10    insurance premiums and endorsement charges as directed by
11    the title insurance agent performing core title services
12    at the time of settlement or closing of the transaction.
13    The disbursement shall include payment for any products or
14    services that are not core title services but that are
15    related to the title insurance agent's performance of core
16    title services and are included in the cost of the title
17    insurance premiums and endorsements, such as, if
18    applicable, title searches, underwriting research
19    assistance, quality control, document recording, retention
20    of title documentation, commitment and policy typing, or
21    other products and services to the title insurance agent
22    that were supplied to the title insurance agent by an
23    escrow agent or other title insurance agent. The
24    disbursements shall be in accordance with the written
25    agency or other agreement between the title insurance
26    agent and escrow agent or other title insurance agent in

 

 

HB4555- 31 -LRB103 37017 RPS 67132 b

1    the transaction and the distributions shall be clearly and
2    unambiguously disclosed on any applicable closing
3    disclosure or settlement statement and delivered to the
4    parties to the transaction at the time of closing or
5    settlement.
6        (3) The escrow agent shall not share or allow to be
7    shared, either directly or indirectly, any of its
8    compensation for its service as an escrow agent or other
9    products or services charged directly to a party in the
10    transaction with any other title insurance agent except as
11    provided in this Section. Any payment that is contrary to
12    this paragraph (3) is a prohibited inducement or
13    compensation for a referral in violation of Section 24.
 
14    (215 ILCS 155/17.2 new)
15    Sec. 17.2. Independent escrowee duties.
16    (a) This Section shall apply only to transactions
17involving residential real property.
18    (b) In the conduct of its escrow, settlement, or closing
19business, and its operation as an escrow, settlement, or
20closing agent as provided in Section 17, every independent
21escrowee shall:
22        (1) Post and publish the current rates and charges
23    associated with its performance of the services and
24    obligations as an independent escrowee and all other
25    services and products it provides with a clear and

 

 

HB4555- 32 -LRB103 37017 RPS 67132 b

1    complete description thereof conspicuously in its offices
2    and on its websites, social media, and digital,
3    electronic, online, and other platforms and places that
4    are intended to be visited or viewed by the public. An
5    independent escrowee shall not make a charge that exceeds
6    the published rates and charges. This paragraph (1) shall
7    not apply to general advertising and marketing in media
8    not controlled by the independent escrowee, but any such
9    advertising shall contain information, such as an Internet
10    web address or a hyperlink, to a website where such
11    published rates and charges can be viewed by the public.
12        (2) Disburse all title insurance premiums and
13    endorsement charges as directed by the title insurance
14    agent performing core title services under subsection (c)
15    of Section 16.2 at the time of settlement or closing. All
16    such disbursements shall be clearly and unambiguously
17    disclosed on any applicable closing disclosure or
18    settlement statement and delivered to the parties to the
19    transaction at the time of closing or settlement.
20    (c) An independent escrowee shall not share or allow to be
21shared any of its compensation for its escrow and settlement
22services with any title insurance company or title insurance
23agent except as provided in this Section. Any payment that is
24contrary to this subsection (c) is a prohibited inducement or
25compensation for a referral in violation of Section 24.
 
26    Section 99. Effective date. This Act takes effect upon

 

 

HB4555- 33 -LRB103 37017 RPS 67132 b

1becoming law.