Florida Senate - 2012                              CS for SB 826
       By the Committee on Banking and Insurance; and Senator Bennett
       597-02428-12                                           2012826c1
    1                        A bill to be entitled                      
    2         An act relating to title insurance claims; creating s.
    3         627.7832, F.S.; providing that after a specified time,
    4         a title insurer must pay the claim or pay an
    5         additional percentage above the initial amount insured
    6         to reimburse the policyholder for certain expenses
    7         until the claim is cured; providing conditions for
    8         certain payments; providing an exception for
    9         additional policy limits; creating s. 627.7844, F.S.;
   10         providing conditions and amounts for the simultaneous
   11         issue of an owner’s title insurance policy in
   12         additional to the loan title insurance policy;
   13         providing criteria for the supplemental coverage;
   14         establishing the premium for such coverage and
   15         providing for a waiver of coverage; amending s.
   16         627.7845, F.S.; specifying that a title insurer’s
   17         determination of insurability must be based on the
   18         evaluation of a reasonable title search beginning with
   19         a root of title; providing an effective date.
   21  Be It Enacted by the Legislature of the State of Florida:
   23         Section 1. Section 627.7832, Florida Statutes, is created
   24  to read:
   25         627.7832Claims payment.—
   26         (1) A title insurer has the right to cure each claim made.
   27  However, after 90 days without a cure the insurer must tender
   28  payment of full policy limits to the insured or pay up to an
   29  additional 25 percent above the initial amount insured to
   30  reimburse the insured for the payment of any attorney fees,
   31  moving expenses, property taxes, architect fees, engineering
   32  fees, permitting fees, or mortgage interest until the cure is
   33  finalized.
   34         (2) The additional 25 percent applies only if the insurer’s
   35  failure to establish title directly impacts the payments listed
   36  in subsection (1).
   37         (3) If a complete loss of title occurs, full policy limits
   38  must be paid regardless of market values.
   40  This section does not apply to additional policy limits issued
   41  pursuant to s. 627.7844.
   42         Section 2. Section 627.7844, Florida Statutes, is created
   43  to read:
   44         627.7844Supplemental coverage.—
   45         (1) If the current owner of real property borrows money
   46  secured by an interest in such real property and a loan title
   47  insurance policy is issued at original title insurance rates
   48  established pursuant to s. 627.782, less any agreed rebates in
   49  connection therewith, the title agency, title insurer, or
   50  attorney-agent providing the loan title insurance policy must
   51  simultaneously issue an owner’s title insurance policy in the
   52  amount of the loan title insurance policy, or such greater
   53  amount as may be requested by the property owner.
   54         (2)(a) If the property owner provides a copy of one or more
   55  owner’s title insurance policies currently insuring the owner’s
   56  interest in the real property, the coverage of the new owner’s
   57  policy to be issued shall be supplemental to the existing owners
   58  policy, and the policy limits of the new owner’s policy must be
   59  fully available if the aggregate insured losses suffered by the
   60  insured exceed the amount insured collectively by the prior
   61  policy. Actual payment or recovery from the prior insurer is not
   62  a condition precedent for recovery under the new owner’s policy.
   63         (b) This supplemental coverage may be accomplished through
   64  an endorsement of the existing owner’s policy or the issuance of
   65  a new owner’s policy containing language establishing coverage
   66  as being supplemental to the prior policies.
   67         (c) The new owner’s and loan policies shall reflect policy
   68  exceptions and limitations based on the current state of title
   69  to the property, and may include exceptions that did not appear
   70  in the prior owner’s policy.
   71         (3) The premium for the simultaneous issuance of the new
   72  owner’s policy must be the minimum simultaneous issue rate
   73  established pursuant to s. 627.782.
   74         (4) The owner of the real property shall waive in writing
   75  the right to purchase any additional owner’s coverage.
   76         Section 3. Subsection (1) of section 627.7845, Florida
   77  Statutes, is amended to read:
   78         627.7845 Determination of insurability required;
   79  preservation of evidence of title search and examination.—
   80         (1) A title insurer may not issue a title insurance
   81  commitment, endorsement, or title insurance policy until the
   82  title insurer has caused to be made a determination of
   83  insurability based upon the evaluation of a reasonable title
   84  search beginning with a root of title, as defined in s.
   85  712.01(2) or a search of the records of a Uniform Commercial
   86  Code filing office, as applicable, has examined such other
   87  information as may be necessary, and has caused to be made a
   88  determination of insurability of title or the existence,
   89  attachments, perfection, and priority of a Uniform Commercial
   90  Code security interest, including endorsement coverages, in
   91  accordance with sound underwriting practices.
   92         Section 4. This act shall take effect July 1, 2012.