Illinois General Assembly - Full Text of Public Act 098-0387
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Public Act 098-0387


 

Public Act 0387 98TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 098-0387
 
HB1335 EnrolledLRB098 06252 RPM 39633 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
Sections 3 and 26 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 by such
title insurance company in addition to do any of the following:
act as an escrow agent pursuant to subsections (f), (g), and
(h) of Section 16 of this Act, solicit title insurance, collect
premiums, or issue title insurance commitments, policies, and
endorsements of the title insurance company; 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 property transaction, from a principal such as a title
insurance company, setting forth in writing the extent of the
principal's responsibility for intentional misconduct or
errors in closing the real property transaction on the part of
a settlement agent, such as a title insurance agent or other
settlement service provider, and includes protection afforded
pursuant to subsections (f), (g), and (h) of Section 16 and
Section 16.1 of this Act even if such protection is afforded by
contract.
    (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.
    (15) "Financial institution" means any bank subject to the
Illinois Banking Act, any savings and loan association subject
to the Illinois Savings and Loan Act of 1985, any savings bank
subject to the Savings Bank Act, any credit union subject to
the Illinois Credit Union Act, and any federally chartered
commercial bank, savings and loan association, savings bank, or
credit union organized and operated in this State pursuant to
the laws of the United States.
(Source: P.A. 95-570, eff. 8-31-07; 96-1454, eff. 1-1-11.)
 
    (215 ILCS 155/26)
    Sec. 26. Settlement funds.
    (a) A title insurance company, title insurance agent, or
independent escrowee shall not make disbursements in
connection with any escrows, settlements, or closings out of a
fiduciary trust account or accounts unless the funds in the
aggregate amount of $50,000 or greater received from any single
party to the transaction are good funds as defined in
paragraphs (2), (6), or (7) of subsection (c) of this Section;
or are collected funds as defined in subsection (d) of this
Section.
    For the purposes of this subsection (a), where funds in the
aggregate amount of $50,000 or greater are received from any
purchaser of residential real property, as defined in paragraph
(14) of Section 3 of this Act, the aggregate amount may consist
of good funds of less than $50,000 per paragraph, as defined in
paragraphs (3) and (5) of subsection (c) of this Section and of
up to $5,000 in good funds, as defined in paragraph (4) of
subsection (c) of this Section.
    (a-5) In addition to the good funds disbursement
authorization set forth in subsection (a) of this Section, a
title insurance company, title insurance agent, or independent
escrowee is authorized to make disbursements in connection with
any escrows, settlements, or closings out of a fiduciary trust
account or accounts where the funds in the aggregate amount of
$50,000 or greater are received from any single party to the
transaction if:
        (1) the funds are transferred by a cashier's check,
    teller's check, or certified check, as defined in the
    Uniform Commercial Code, that is drawn on or issued by a
    financial institution, as defined in this Act;
        (2) the title insurance company, title insurance
    agent, or independent escrowee and the financial
    institution, as defined in this Act, are known to each
    other and agree to the use of cashier's checks, teller's
    checks, or certified checks as good funds under item (3) of
    subsection (c) of this Section; and
        (3) the cashier's check, teller's check, or certified
    check is delivered to the title insurance company, title
    insurance agent, or independent escrowee in sufficient
    time for the check to be deposited into the title insurance
    company's, title insurance agent's, or independent
    escrowee's fiduciary trust account prior to disbursement
    from the fiduciary trust account of the title insurance
    company, title insurance agent, or independent escrowee.
    The provisions of this subsection (a-5) are inoperative on
and after January 1, 2015.
    (b) A title insurance company or title insurance agent
shall not make disbursements in connection with any escrows,
settlements, or closings out of a fiduciary trust account or
accounts unless the funds in the amount of less than $50,000
received from any single party to the transaction are collected
funds or good funds as defined in subsection (c) of this
Section.
    (c) "Good funds" means funds in one of the following forms:
        (1) lawful money of the United States;
        (2) wired funds unconditionally held by and credited to
    the fiduciary trust account of the title insurance company,
    the title insurance agent, or independent escrowee;
        (3) cashier's checks, certified checks, bank money
    orders, official bank checks, or teller's checks drawn on
    or issued by a financial institution chartered under the
    laws of any state or the United States and unconditionally
    held by the title insurance company, title insurance agent,
    or independent escrowee;
        (4) a personal check or checks in an aggregate amount
    not exceeding $5,000 per closing, provided that the title
    insurance company, title insurance agent, or independent
    escrowee has reasonable grounds to believe that sufficient
    funds are available for withdrawal in the account upon
    which the check is drawn at the time of disbursement;
        (5) a check drawn on the trust account of any lawyer or
    real estate broker licensed under the laws of any state,
    provided that the title insurance company, title insurance
    agent, or independent escrowee has reasonable grounds to
    believe that sufficient funds are available for withdrawal
    in the account upon which the check is drawn at the time of
    disbursement;
        (6) a check issued by this State, the United States, or
    a political subdivision of this State or the United States;
    or
        (7) a check drawn on the fiduciary trust account of a
    title insurance company or title insurance agent, provided
    that the title insurance company, title insurance agent, or
    independent escrowee has reasonable grounds to believe
    that sufficient funds are available for withdrawal in the
    account upon which the check is drawn at the time of
    disbursement.
    (d) "Collected funds" means funds deposited, finally
settled, and credited to the title insurance company, title
insurance agent, or independent escrowee's fiduciary trust
account.
    (e) A purchaser, a seller, or a lender is each considered a
single party to the transaction for the purposes of this
Section, regardless of the number of people or entities making
up the purchaser, seller, or lender.
(Source: P.A. 96-645, eff. 1-1-10; 96-1457, eff. 1-1-11.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/16/2013