First Substitute H.B. 265

Representative Thomas Hatch proposes to substitute the following bill:

1 TITLE INSURANCE AMENDMENTS
2 1998 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Thomas Hatch
5 AN ACT RELATING TO INSURANCE; PERMITTING INSURANCE COMMISSIONER TO
6 ASSESS TITLE INSURERS TO PAY FOR COSTS RELATED TO REGULATION OF
7 TITLE INSURANCE; PROVIDING AN EFFECTIVE DATE; AND PROVIDING A REPEAL
8 DATE.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 ENACTS:
11 31A-23-315, Utah Code Annotated 1953
12 63-55b-3101, Utah Code Annotated 1953
13 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 31A-23-315 is enacted to read:
15 31A-23-315. Taxation of title insurers.
16 (1) For purposes of this section:
17 (a) "Premium" is as defined in Subsection 59-9-101(3).
18 (b) "Title insurer" means a person:
19 (i) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or
20 surety, any contract or policy of title insurance;
21 (ii) transacting or proposing to transact any phase of title insurance, including:
22 (A) soliciting;
23 (B) negotiating preliminary to execution;
24 (C) executing of a contract of title insurance;
25 (D) insuring; and

1 (E) transacting matters subsequent to the execution of the contract and arising out of the
2 contract.
3 (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
4 personal property located in Utah, an owner of real or personal property, the holders of liens or
5 encumbrances on that property, or others interested in the property against loss or damage suffered
6 by reason of:
7 (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
8 property; or
9 (ii) invalidity or unenforceability of any liens or encumbrances on the property.
10 (2) (a) Beginning on July 1, 1998, the insurance commissioner may assess each title
11 insurer an annual assessment determined in accordance with this Subsection (2) to be used for the
12 purposes described in Subsection (3).
13 (b) The assessment described in Subsection (2)(a) shall be calculated by multiplying:
14 (i) the percentage of total premiums for title insurance on Utah risks that are premiums of
15 the title insurer; and
16 (ii) the total of costs and expenses determined under Subsection (2)(c).
17 (c) Notwithstanding Section 31A-3-103 and in accordance with Title 63, Chapter 46a,
18 Utah Administrative Rulemaking Act, the department by rule shall establish the amount of costs
19 and expenses described under Subsection (3) that will be covered by the assessment, except the
20 costs or expenses to be covered by the assessment may not exceed $85,000.
21 (3) (a) All money received by the state under this section shall be deposited in the General
22 Fund as a dedicated credit of the department.
23 (b) The money may be expended by the department only to pay for any cost or expense
24 incurred by the department in the administration, investigation, and enforcement of the provisions
25 of Title 31A, Chapter 23, Parts III and IV, related to the marketing of title insurance.
26 (4) The assessment imposed by this section shall be in addition to any premium
27 assessment imposed under Subsection 59-9-101(3).
28 Section 2. Section 63-55b-3101 is enacted to read:
29 63-55b-3101. Repeal date.
30 Section 31A-23-315 is repealed July 1, 2001.
31 Section 3. Effective date.

- 2 -

1 If approved by two-thirds of all the members elected to each house, this act takes effect
2 upon approval by the governor, or the day following the constitutional time limit of Utah
3 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto, the
4 date of veto override.

- 3 -