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Appendix 1MARTIN O'MALLEY, Governor Ch. 683Chapter 683(House Bill 866)AN ACT concerningTitle Insurance – Closing or Settlement Protection Practices – StudyFOR the purpose of requiring certain domestic title insurers to establish and maintaina certain reserve for certain losses arising from closing or settlement protection;authorizing the amount in reserve to be released in certain amounts undercertain circumstances; authorizing a domestic title insurer to withdraw theentire reserve under certain circumstances; requiring a certain notice to includecertain information about certain closing or settlement protection; authorizing amethod to cure a certain failure to obtain a certain notice; requiring a titleinsurer to provide certain closing or settlement protection to a certain protectedparty in a certain transaction; requiring the closing or settlement protection toindemnify certain persons against certain actions and failures in connectionwith certain transactions; limiting the extent of a certain indemnification;prohibiting the indemnification from being provided for certain losses orimpairments; requiring certain title insurers to file for approval by theMaryland Insurance Commissioner of a certain premium; establishing aminimum amount of the premium; providing that the premium may not besubject to a certain agreement; authorizing a title insurer to provide a certainstatement of coverage; prohibiting a title insurer from providing certain othercoverage for a certain indemnification; requiring certain title insurers to file acertain initial premium on or before a certain date; providing for the applicationof this Act; providing for the effective dates of this Act; the Maryland InsuranceCommissioner to study closing or settlement protection practices of the titleinsurance industry and to make certain recommendations; requiring theCommissioner to consider certain matters in conducting the study; authorizingthe Commissioner to consult with certain persons and entities in conducting thestudy; requiring the Commissioner to report certain findings andrecommendations to certain committees of the General Assembly on or before acertain date; and generally relating to title insurance protection a study ofclosing and settlement protection practices of the title insurance industry.BY adding toArticle – InsuranceSection 5–207 and 22–104Annotated Code of Maryland(2011 Replacement Volume)BY repealing and reenacting, with amendments,Article – Insurance– 1 –
Appendix 1Ch. 6832012 LAWS OF MARYLANDSection 22–102Annotated Code of Maryland(2011 Replacement Volume)SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OFMARYLAND, That the Laws of Maryland read as follows:(a)The Maryland Insurance Commissioner shall:(1) study closing or settlement protection practices of the titleinsurance industry, including mechanisms for, and associated costs of, compensatingconsumers, title insurers, mortgage lenders, and other parties for monetary losses thatresult from the theft, misappropriation, or misuse of funds held in escrow by a titleinsurance producer in connection with a real estate transaction; and(2) make recommendations for changes to the closing and settlementprotection practices of the title insurance industry in the State.(b)In conducting the study, the Commissioner shall consider:(1) title insurance producer defalcations reported to the MarylandInsurance Administration by title insurers;(2) title insurance producer defalcations discovered by theAdministration as a result of a complaint received by the Administration;(3) the extent to which any regulations relating to the on–site reviewby title insurers of their appointed title insurance producers have addressed theproblem of title insurance producer defalcations;(4) the availability and affordability of fidelity bonds, escrow bonds,reinsurance, or other coverage to protect title insurers against the theft,misappropriation, or misuse of closing or settlement funds by its appointed titleinsurance producers, other agents, or employees;(5) the manner in which closing or settlement protection is beingaddressed by other states, the National Association of Insurance Commissioners, andthe National Coalition of Insurance Legislators; and(6) any other relevant matter, as determined by the Commissioner.(c) In conducting the study, the Commissioner may consult with any personor entity that the Commissioner determines appropriate, including representatives of:(1) the title insurance industry;– 2 –
Page 2 and 3: Report of the Study ofClosing or Se
Page 4 and 5: TABLE OF CONTENTSI. EXECUTIVE SUMMA
Page 6 and 7: Although in a minority of states an
Page 8 and 9: or misuse of closing or settlement
Page 10 and 11: (4) Division of Consumer Protection
Page 12 and 13: title insurance producer or agency
Page 14 and 15: As part of its Insurer Survey, the
Page 16 and 17: or dishonest practices, the underwr
Page 18 and 19: eported having a least one escrow a
Page 20 and 21: ond also may be purchased by an und
Page 22 and 23: 4. Other Protection Available to Un
Page 24 and 25: 1. Preventive MeasuresProducer Lice
Page 26 and 27: lender’s funds or documents. The
Page 28 and 29: In the event of the insolvency of a
Page 30 and 31: insurance task force. The informati
Page 32 and 33: in excess of 20 cents in claims on
Page 34 and 35: create an environment vulnerable to
Page 38 and 39: Appendix 1MARTIN O'MALLEY, Governor
Page 44 and 45: AppendixAppendix22MARTIN O’MALLEY
Page 46 and 47: Appendix 2c. If you answered “No
Page 48 and 49: Appendix 2Certification of Informat
Page 50 and 51: Appendix 2QUESTION #3Schedule BStat
Page 52 and 53: Appendix 3
Page 54 and 55: Appendix 3SURVEYTitle Insurance - C
Page 56 and 57: Appendix 3a. Does your title insura
Page 58 and 59: Appendix 3QUESTION # 2Schedule ADor
Page 60: Appendix 3QUESTION # 10Schedule CMi

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