HB 643

A bill to be entitled
2An act relating to title insurance; amending s.
3626.2815, F.S.; specifying continuing education
4requirements for title insurance agents; authorizing
5the Department of Financial Services to contract with
6a private entity for services related to continuing
7education for title insurance agents; amending s.
8626.841, F.S.; providing a definition for the term
9"agent in charge of a title insurance agency";
10amending s. 626.8417, F.S.; requiring that certain
11attorney-owned entities that engage in business as a
12title insurance agency, other than the active practice
13of law, must be licensed as a title insurance agency
14with a designated agent in charge; amending s.
15626.8418, F.S.; deleting specified financial security
16and bond requirements relating to an applicant for
17licensure as a title insurance agency; amending s.
18626.8419, F.S.; increasing the amount of a fidelity
19bond that a title insurance agency must file with the
20department and limiting the amount of the deductible
21applicable to such bond; creating s. 626.8422, F.S.;
22specifying requirements that apply to title insurance
23agencies relating to the designation of an agent in
24charge at specified locations; providing a penalty for
25failing to designate an agent in charge under certain
26circumstances; amending s. 626.8437, F.S.; specifying
27additional grounds to deny, suspend, revoke, or refuse
28to renew or continue the license or appointment of a
29title insurance agent or agency; amending s. 626.8473,
30F.S.; requiring an attorney serving as a title or real
31estate settlement agent to deposit and maintain
32certain funds in a separate trust account and permit
33the account to be audited by the applicable title
34insurer, unless prohibited by the rules of The Florida
35Bar; amending s. 627.777, F.S.; providing procedures
36and requirements relating to the approval or
37disapproval of title insurance forms by the
38department; creating s. 627.7815, F.S.; specifying
39requirements for submission of a document or
40information to the department in order for a person to
41claim that the document is a trade secret; requiring
42each page or portion to be labeled as a trade secret
43and be separated from non-trade secret material;
44requiring the submitting party to include an affidavit
45certifying certain information about the documents
46claimed to be trade secrets; providing that certain
47data submitted by a title insurance agent or title
48insurer is presumed to be a trade secret whether or
49not so designated; amending s. 627.782, F.S.;
50requiring title insurance agencies and certain
51insurers to submit specified information to the
52department to assist in the analysis of title
53insurance premium rates, title search costs, and the
54condition of the title insurance industry; creating s.
55627.7985, F.S.; authorizing the department to adopt
56specified rules relating to title insurance; providing
57penalties for willful violation of any such rule;
58creating s. 689.263, F.S.; specifying requirements
59that a title insurance agent or agency must meet in
60order to distribute funds relating to certain real
61estate sales or purchases; providing an effective
64Be It Enacted by the Legislature of the State of Florida:
66     Section 1.  Paragraph (d) of subsection (3) of section
67626.2815, Florida Statutes, is amended, paragraph (l) is added
68to that subsection, and subsection (8) is added to that section,
69to read:
70     626.2815  Continuing education required; application;
71exceptions; requirements; penalties.-
72     (3)
73     (d)  Any person who holds a license as a customer
74representative, limited customer representative, title agent,
75motor vehicle physical damage and mechanical breakdown insurance
76agent, crop or hail and multiple-peril crop insurance agent, or
77as an industrial fire insurance or burglary insurance agent and
78who is not a licensed life or health insurance agent, must shall
79be required to complete 10 hours of continuing education courses
80every 2 years.
81     (l)  Any person who holds a license as a title insurance
82agent must complete a minimum of 10 hours of continuing
83education courses every 2 years in title insurance and escrow
84management specific to this state and approved by the
85department, which shall include at least 3 hours of continuing
86education on the subject matter of ethics, rules, or compliance
87with state and federal regulations relating to title insurance
88and closing services.
89     (8)  The department may contract with a private entity for
90services related to the administration, review, or approval of a
91continuing education program for title insurance agents. The
92contract shall be procured as one for a contractual service
93pursuant to s. 287.057.
94     Section 2.  Section 626.841, Florida Statutes, is amended
95to read:
96     626.841  Definitions.-The term:
97     (1)  "Agent in charge of a title insurance agency" means an
98attorney or a licensed and appointed title insurance agent who
99is designated as agent in charge pursuant to s. 626.8422.
100     (2)  "Title insurance agency" means an insurance agency
101under which title insurance agents and other employees determine
102insurability in accordance with underwriting rules and standards
103prescribed by the title insurer represented by the agency, and
104issue and countersign commitments, endorsements, or policies of
105title insurance, on behalf of the appointing title insurer. The
106term does not include a title insurer.
107     (3)(1)  "Title insurance agent" means a person appointed in
108writing by a title insurer to issue and countersign commitments
109or policies of title insurance on in its behalf.
110     Section 3.  Paragraph (c) of subsection (4) of section
111626.8417, Florida Statutes, is amended to read:
112     626.8417  Title insurance agent licensure; exemptions.-
113     (4)
114     (c)  If one or more an attorney or attorneys own a
115corporation or other legal entity that which is doing business
116as a title insurance agency other than an entity engaged in the
117active practice of law, the agency must be licensed and
118appointed as a title insurance agency with an agent in charge
119designated for the agency.
120     Section 4.  Section 626.8418, Florida Statutes, is amended
121to read:
122     626.8418  Application for title insurance agency license.-
123Before Prior to doing business in this state as a title
124insurance agency, a title insurance agency must meet all of the
125following requirements:
126     (1)  The applicant must file with the department an
127application for a license as a title insurance agency, on
128printed forms furnished by the department, that includes all of
129the following:
130     (1)(a)  The name of each majority owner, partner, officer,
131and director of the agency.
132     (2)(b)  The residence address of each person required to be
133listed under subsection (1) paragraph (a).
134     (3)(c)  The name of the agency and its principal business
136     (4)(d)  The location of each agency office and the name
137under which each agency office conducts or will conduct
139     (5)(e)  The name of each agent to be in full-time charge of
140an agency office and specification of which office.
141     (6)(f)  Such additional information as the department
142requires by rule to ascertain the trustworthiness and competence
143of persons required to be listed on the application and to
144ascertain that such persons meet the requirements of this code.
145     (2)  The applicant must have deposited with the department
146securities of the type eligible for deposit under s. 625.52 and
147having at all times a market value of not less than $35,000. In
148place of such deposit, the title insurance agency may post a
149surety bond of like amount payable to the department for the
150benefit of any appointing insurer damaged by a violation by the
151title insurance agency of its contract with the appointing
152insurer. If a properly documented claim is timely filed with the
153department by a damaged title insurer, the department may remit
154an appropriate amount of the deposit or the proceeds that are
155received from the surety in payment of the claim. The required
156deposit or bond must be made by the title insurance agency, and
157a title insurer may not provide the deposit or bond directly or
158indirectly on behalf of the title insurance agency. The deposit
159or bond must secure the performance by the title insurance
160agency of its duties and responsibilities under the issuing
161agency contracts with each title insurer for which it is
162appointed. The agency may exchange or substitute other
163securities of like quality and value for securities on deposit,
164may receive the interest and other income accruing on such
165securities, and may inspect the deposit at all reasonable times.
166Such deposit or bond must remain unimpaired as long as the title
167insurance agency continues in business in this state and until 1
168year after termination of all title insurance agency
169appointments held by the title insurance agency. The title
170insurance agency is entitled to the return of the deposit or
171bond together with accrued interest after such year has passed,
172if no claim has been made against the deposit or bond. If a
173surety bond is unavailable generally, the department may adopt
174rules for alternative methods to comply with this subsection.
175With respect to such alternative methods for compliance, the
176department must be guided by the past business performance and
177good reputation and character of the proposed title insurance
178agency. A surety bond is deemed to be unavailable generally if
179the prevailing annual premium exceeds 25 percent of the
180principal amount of the bond.
181     Section 5.  Paragraph (a) of subsection (1) of section
182626.8419, Florida Statutes, is amended to read:
183     626.8419  Appointment of title insurance agency.-
184     (1)  The title insurer engaging or employing the title
185insurance agency must file with the department, on printed forms
186furnished by the department, an application certifying that the
187proposed title insurance agency meets all of the following
189     (a)  The agency must have obtained a fidelity bond in an
190amount, not less than $250,000, with a deductible not exceeding
1911 percent of the bond amount $50,000, acceptable to the insurer
192appointing the agency. If a fidelity bond is unavailable
193generally, the department must adopt rules for alternative
194methods to comply with this paragraph.
195     Section 6.  Section 626.8422, Florida Statutes, is created
196to read:
197     626.8422  Agent in charge.-
198     (1)  Each location within this state of a title insurance
199agency or branch office of a title insurance agency that is
200regularly open to the public for closing services, as defined in
201s. 627.7711, and at which disbursement of escrow funds or policy
202issuance services are regularly performed must have a separate
203agent in charge designated by the title insurance agency. The
204failure of a title insurance agency to designate an agent in
205charge, on a form prescribed by the department, within 10
206working days after an agency begins business at a location or
207makes a change of the agent in charge, is a violation of this
208chapter, punishable as provided in s. 626.844.
209     (2)  The agent in charge shall perform the activities
210described in subsection (1) at the location where he or she is
211the designated agent in charge.
212     (3)  An agency shall designate an attorney duly admitted to
213practice law in this state and in good standing with The Florida
214Bar or a title insurance agent licensed in this state as agent
215in charge for each location of the agency or insurer as
216described in subsection (1). In the case of multiple locations
217where the activities as described in subsection (1) are
218performed, the agency shall designate a separate agent in charge
219for each location.
220     Section 7.  Subsections (11) and (12) are added to section
221626.8437, Florida Statutes, to read:
222     626.8437  Grounds for denial, suspension, revocation, or
223refusal to renew license or appointment.-The department shall
224deny, suspend, revoke, or refuse to renew or continue the
225license or appointment of any title insurance agent or agency,
226and it shall suspend or revoke the eligibility to hold a license
227or appointment of such person, if it finds that as to the
228applicant, licensee, appointee, or any principal thereof, any
229one or more of the following grounds exist:
230     (11)  Failure to timely submit data as required by the
232     (12)  If a licensee, being charged with an insurance or
233financial-related felony, a crime involving moral turpitude, or
234a crime punishable by imprisonment of 1 year or more under the
235law of any state, territory, or country.
236     Section 8.  Subsection (8) is added to section 626.8473,
237Florida Statutes, to read:
238     626.8473  Escrow; trust fund.-
239     (8)  An attorney shall deposit and maintain all funds
240received in connection with transactions in which the attorney
241is serving as a title or real estate settlement agent into a
242separate trust account that is maintained exclusively for funds
243received in connection with such transactions and permit the
244account to be audited by its title insurers, unless maintaining
245funds in the separate account for a particular client would
246violate applicable rules of The Florida Bar.
247     Section 9.  Section 627.777, Florida Statutes, is amended
248to read:
249     627.777  Approval of forms.-
250     (1)  A title insurer may not issue or agree to issue any
251form of title insurance commitment, title insurance policy,
252other contract of title insurance, or related form until it is
253filed with and approved by the office. The office may not
254disapprove a title guarantee or policy form on the ground that
255it has on it a blank form for an attorney's opinion on the
257     (2)  If the form filed for approval is a form certified and
258adopted by the American Land Title Association at the time of
259filing, the department shall approve or disapprove the form
260within 180 days after receipt. If the form is not a form
261certified by the American Land Title Association at the time of
262filing, the department shall approve or disapprove the form
263within 1 year after receipt.
264     (3)  When the department approves any form, it shall
265determine if the current rate in effect applies or if the
266coverages require the adoption of a rule pursuant to s. 627.782.
267     (4)  The department may revoke approval of any form after
268providing 180 days' notice to the title insurer if the basis for
269revocation is that the American Land Title Association has
270decertified a previously approved form.
271     (5)  An insurer may not achieve a competitive advantage
272over any other insurer, agency, or agent as to rates or forms.
273If a form or rate is approved for an insurer, the department
274shall expeditiously approve the forms of other insurers who
275apply for approval if those forms contain identical coverages,
276rates, or deviations which have been approved under s. 627.783.
277     Section 10.  Section 627.7815, Florida Statutes, is created
278to read:
279     627.7815  Trade secret documents.-If any person who is
280required to submit a document or other information to the
281department pursuant to this part or by rule or order of the
282department claims that such submission contains a trade secret,
283such person may file with the department a notice of trade
284secret. Failure to do so constitutes a waiver of any claim by
285the person that the requested document or information is a trade
287     (1)  Each page of such document or specific portion of a
288document claimed to be a trade secret must be clearly marked
289"trade secret."
290     (2)  All material marked "trade secret" must be separated
291from all non-trade-secret material, such as being submitted in a
292separate envelope clearly marked "trade secret."
293     (3)  When submitting a notice of trade secret to the
294department, the submitting party must include an affidavit
295certifying under oath to the truth of the following statements
296concerning all information and documents that are claimed to be
297trade secrets:
298     (a)  [I consider/My company considers] this information a
299trade secret that has value and provides an advantage or an
300opportunity to obtain an advantage over those who do not know or
301use it.
302     (b)  [I have/My company has] taken measures to prevent the
303disclosure of the information to anyone other than those who
304have been selected to have access for limited purposes, and [I
305intend/my company intends] to continue to take such measures.
306     (c)  The information is not, and has not been, reasonably
307obtainable without [my/our] consent by other persons by use of
308legitimate means.
309     (d)  The information is not publicly available elsewhere.
310     (4)  Any data submitted by a title insurance agent or title
311insurer pursuant to s. 627.782 are presumed to be a trade secret
312under this section whether or not so designated.
313     Section 11.  Subsection (8) of section 627.782, Florida
314Statutes, is amended to read:
315     627.782  Adoption of rates.-
316     (8)  Each title insurance agency licensed to do business in
317this state and each insurer engaging in direct, retail, or
318affiliated business in this state shall maintain and submit
319information, including revenue, loss, and expense data, as the
320department determines necessary to assist in the analysis of
321title insurance premium rates, title search costs, and the
322condition of the title insurance industry in this state. This
323information must be transmitted to the department annually by
324March 31 of the year after the reporting year. The department
325shall adopt rules to assist in the collection and analysis of
326the data from the title insurance industry. The commission may,
327by rule, require licensees under this part to annually submit
328statistical information, including loss and expense data, as the
329department determines to be necessary to analyze premium rates,
330retention rates, and the condition of the title insurance
332     Section 12.  Section 627.7985, Florida Statutes, is created
333to read:
334     627.7985  Rules as to title insurance.-
335     (1)  In addition to the authority to adopt rules relating
336to title insurance authorized elsewhere in the Florida Insurance
337Code, the department may adopt rules that:
338     (a)  Define the license and appointment requirements for
339title insurance agents and agencies.
340     (b)  Establish penalty guidelines for enforcing the
341requirements of the Florida Insurance Code.
342     (c)  Describe the fiduciary responsibilities and duties of
343title insurers, title insurance agents, and title insurance
344agencies, including, but not limited to, responsibilities and
345duties related to escrow accounts.
346     (d)  Identify the responsibilities, duties, and
347designations of the agent in charge of the title insurance
349     (e)  Enable the collection and analysis of information
350relating to the title insurance business submitted by title
351insurers, title insurance agents, and title insurance agencies.
352     (f)  Set reasonable requirements for the timely recording
353of documents and the delivery of final title insurance policies.
354     (g)  Set reasonable requirements for the timely
355disbursement of escrow funds unless a written escrow agreement
356specifies a longer holding period.
357     (h)  Establish rules for the protection, calculation, and
358timely remittance of premiums that are owed to title insurers.
359     (i)  Prohibit the markup of the cost of any third-party
360goods and services that do not add value.
361     (2)  In addition to any other penalty provided for under
362the Florida Insurance Code for a violation of a rule, a title
363insurer or title insurance agent or agency is subject to
364suspension or revocation of a certificate of authority or
365license, as may be applicable, for the willful violation of any
367     Section 13.  Section 689.263, Florida Statutes, is created
368to read:
369     689.263  Sale of residential property; settlement statement
370requirements.-A title insurance agent or title insurance agency
371may not disburse funds pursuant to a completed purchase and sale
372transaction or refinance transaction subject to the Real Estate
373Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. ss. 2601 et
374seq., as amended, without requiring a statement of settlement
375costs meeting the following requirements:
376     (1)  The settlement statement must be executed by the
377buyer, borrower, seller, if any, and settlement agent as defined
378by RESPA.
379     (2)  If a title insurance premium is to be disbursed, the
380title insurer and the title insurance agent or title insurance
381agency, if any, must be disclosed.
382     Section 14.  This act shall take effect July 1, 2012.

CODING: Words stricken are deletions; words underlined are additions.