SB2947 EngrossedLRB098 19574 RPM 54764 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
5Section 16 as follows:
 
6    (215 ILCS 155/16)  (from Ch. 73, par. 1416)
7    Sec. 16. Title insurance agents.
8    (a) No person, firm, partnership, association, corporation
9or other legal entity shall act as or hold itself out to be a
10title insurance agent unless duly registered by a title
11insurance company with the Secretary.
12    (b) Each application for registration shall be made on a
13form specified by the Secretary and prepared in duplicate by
14each title insurance company which the agent represents. The
15title insurance company shall retain the copy of the
16application and forward the original to the Secretary with the
17appropriate fee.
18    (c) Every applicant for registration, except a firm,
19partnership, association, limited liability company, or
20corporation, must be 18 years or more of age. Included in every
21application for registration of a title insurance agent,
22including a firm, partnership, association, limited liability
23company, or corporation, shall be an affidavit of the applicant

 

 

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1title insurance agent, signed and notarized in front of a
2notary public, affirming that the applicant and every owner,
3officer, director, principal, member, or manager of the
4applicant has never been convicted or pled guilty to any felony
5or misdemeanor involving a crime of theft or dishonesty or
6otherwise accurately disclosing any such felony or misdemeanor
7involving a crime of theft or dishonesty. No person who has had
8a conviction or pled guilty to any felony or misdemeanor
9involving theft or dishonesty may be registered by a title
10insurance company without a separate written notification to
11the Secretary disclosing the conviction or plea, and no such
12person may serve as an owner, officer, director, principal, or
13manager of any registered title insurance agent without the
14written permission of the Secretary.
15    (d) Registration shall be made annually by a filing with
16the Secretary; supplemental registrations for new title
17insurance agents to be added between annual filings shall be
18made from time to time in the manner provided by the Secretary;
19registrations shall remain in effect unless revoked or
20suspended by the Secretary or voluntarily withdrawn by the
21registrant or the title insurance company.
22    (e) Funds deposited in connection with any escrows,
23settlements, or closings shall be deposited in a separate
24fiduciary trust account or accounts in a bank or other
25financial institution insured by an agency of the federal
26government unless the instructions provide otherwise. The

 

 

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1funds shall be the property of the person or persons entitled
2thereto under the provisions of the escrow, settlement, or
3closing and shall be segregated by escrow, settlement, or
4closing in the records of the escrow agent. The funds shall not
5be subject to any debts of the escrowee and shall be used only
6in accordance with the terms of the individual escrow,
7settlement, or closing under which the funds were accepted.
8    Interest received on funds deposited with the escrow agent
9in connection with any escrow, settlement, or closing shall be
10paid to the depositing party unless the instructions provide
11otherwise.
12    The escrow agent shall maintain separate records of all
13receipts and disbursements of escrow, settlement, or closing
14funds.
15    The escrow agent shall comply with any rules adopted by the
16Secretary pertaining to escrow, settlement, or closing
17transactions.
18    (f) A title insurance agent shall not act as an escrow
19agent in a nonresidential real property transaction where the
20amount of settlement funds on deposit with the escrow agent is
21less than $2,000,000 or in a residential real property
22transaction unless the title insurance agent, title insurance
23company, or another authorized title insurance agent has
24committed for the issuance of title insurance in that
25transaction and the title insurance agent is authorized to act
26as an escrow agent on behalf of the title insurance company for

 

 

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1which the commitment for title insurance has been issued. The
2authorization under the preceding sentence shall be given
3either (1) by an agency contract with the title insurance
4company which contract, in compliance with the requirements set
5forth in subsection (g) of this Section, authorizes the title
6insurance agent to act as an escrow agent on behalf of the
7title insurance company or (2) by a closing protection letter
8in compliance with the requirements set forth in Section 16.1
9of this Act, issued by the title insurance company to the
10seller, buyer, borrower, and lender. A closing protection
11letter shall not be issued by a title insurance agent. The
12provisions of this subsection (f) shall not apply to the
13authority of a title insurance agent to act as an escrow agent
14under subsection (g) of Section 17 of this Act.
15    (g) If an agency contract between the title insurance
16company and the title insurance agent is the source of the
17authority under subsection (f) of this Section for a title
18insurance agent to act as escrow agent for a real property
19transaction, then the agency contract shall provide for no less
20protection from the title insurance company to all parties to
21the real property transaction than the title insurance company
22would have provided to those parties had the title insurance
23company issued a closing protection letter in conformity with
24Section 16.1 of this Act.
25    (h) A title insurance company shall be liable for the acts
26or omissions of its title insurance agent as an escrow agent if

 

 

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1the title insurance company has authorized the title insurance
2agent under subsections (f) and (g) of this Section 16 and only
3to the extent of the liability undertaken by the title
4insurance company in the agency agreement or closing protection
5letter. The liability, if any, of the title insurance agent to
6the title insurance company for acts and omissions of the title
7insurance agent as an escrow agent shall not be limited or
8otherwise modified because the title insurance company has
9provided closing protection to a party or parties to a real
10property transaction escrow, settlement, or closing. The
11escrow agent shall not charge a fee for protection provided by
12a title insurance company to parties to real property
13transactions under subsections (f) and (g) of this Section 16
14and Section 16.1, but shall collect from the parties the fee
15charged by the title insurance company and shall promptly remit
16the fee to the title insurance company. The title insurance
17company may charge the parties a reasonable fee for protection
18provided pursuant to subsections (f) and (g) of this Section 16
19and Section 16.1 and shall not pay any portion of the fee to
20the escrow agent. The payment of any portion of the fee to the
21escrow agent by the title insurance company, shall be deemed a
22prohibited inducement or compensation in violation of Section
2324 of this Act.
24    (i) The Secretary shall adopt and amend such rules as may
25be required for the proper administration and enforcement of
26this Section 16 consistent with the federal Real Estate

 

 

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1Settlement Procedures Act and Section 24 of this Act.
2(Source: P.A. 98-398, eff. 1-1-14.)