H.B. 411

1

TITLE AND ESCROW COMMISSION ACT
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: R. Curt Webb
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Title and Escrow Commission Act.
10 Highlighted Provisions:
11 This bill:
12 . defines terms;
13 . provides for the issuance of letters of warnings and citations;
14 . provides that letters of warnings do not constitute notice of agency action or
15 administrative proceedings;
16 . requires the commissioner to establish procedures related to complaints;
17 . provides for rulemaking by the Title and Escrow Commission, with the concurrence
18 of the commissioner, related to standards of conduct, fines, and administrative
19 procedures;
20 . addresses reporting requirements;
21 . addresses when the commission may hold hearings;
22 . addresses duties of the commission; and
23 . makes technical changes.
24 Monies Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None

28 Utah Code Sections Affected:
29 AMENDS:
30 31A-2-402, as last amended by Laws of Utah 2007, Chapter 325
31 31A-2-404, as last amended by Laws of Utah 2007, Chapter 325
32 ENACTS:
33 31A-2-406, Utah Code Annotated 1953
34
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 31A-2-402 is amended to read:
37 31A-2-402. Definitions.
38 As used in this part:
39 (1) "Citation" means a notice of agency action issued by the commissioner to a title
40 licensee that includes a statement of:
41 (a) the factual basis of a violation by the title licensee of a standard of conduct
42 identified in rules made under Subsection 31A-2-404 (2)(a)(vi);
43 (b) the amount of the fine imposed as a result of the violation described in Subsection
44 (1)(a);
45 (c) the date by which the fine must be paid without additional penalty if the title
46 licensee does not contest the citation;
47 (d) the date by which the title licensee must do the following if the title licensee
48 contests the citation:
49 (i) resolve the fine by negotiation or stipulated agreement with the commissioner; or
50 (ii) appear at an adjudicative hearing; and
51 (e) any possible further action by the commissioner for failure to pay the fine.
52 [(1)] (2) "Commission" means the Title and Escrow Commission created in Section
53 31A-2-403 .
54 [(2)] (3) "Concurrence" means the entities given a concurring role must jointly agree
55 for the action to be taken.
56 [(3)] (4) "Dual licensed title licensee" means a title licensee who holds:
57 (a) a producer license as a title licensee; and
58 (b) a license or certificate under:

59 (i) Title 61, Chapter 2, Division of Real Estate [Division];
60 (ii) Title 61, Chapter 2b, Real Estate Appraiser Licensing and Certification Act; or
61 (iii) Title 61, Chapter 2c, Utah Residential Mortgage Practices Act.
62 (5) "Letter of warning" means a letter issued by the commissioner to a title licensee
63 that states that:
64 (a) the commissioner has received a complaint against the title licensee;
65 (b) the facts alleged in the complaint, if true, would constitute a violation of a standard
66 of conduct identified in rules made under Subsection 31A-2-404 (2)(a)(vi); and
67 (c) the commissioner has decided:
68 (i) not to take action on the complaint at the time, but may take action on the complaint
69 in the future; and
70 (ii) to maintain the complaint in the records of the department.
71 [(4)] (6) "Real Estate Commission" means the Real Estate Commission created in
72 Section 61-2-5.5 .
73 [(5)] (7) "Title licensee" means a person licensed under this title as:
74 (a) an agency with a title insurance line of authority;
75 (b) a producer with:
76 (i) a general title insurance line of authority; or
77 (ii) a specific category of authority for title insurance; or
78 (c) a title insurance adjuster.
79 Section 2. Section 31A-2-404 is amended to read:
80 31A-2-404. Duties of the commissioner and Title and Escrow Commission.
81 (1) Notwithstanding the other provisions of this chapter, to the extent provided in this
82 part, the commissioner shall administer and enforce the provisions in this title related to:
83 (a) title insurance; and
84 (b) escrow conducted by a title licensee or title insurer.
85 (2) The commission shall:
86 (a) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
87 and subject to Subsection (3), make rules for the administration of the provisions in this title
88 related to title insurance including rules related to:
89 (i) rating standards and rating methods for title agencies and producers as provided in

90 Section 31A-19a-209 ;
91 (ii) the licensing for a title licensee including the licensing requirements of Sections
92 31A-23a-203 and 31A-23a-204 ;
93 (iii) continuing education requirements of Section 31A-23a-202 ;
94 (iv) examination procedures, after consultation with the department and the
95 department's test administrator when required by Section 31A-23a-204 ; [and]
96 (v) standards of conduct for a title licensee; and
97 (vi) with the concurrence of the commission:
98 (A) identifying the one or more standards of conduct enforceable through a citation;
99 (B) establishing a fine schedule for a violation of a standard of conduct identified under
100 Subsection (2)(a)(vi)(A); and
101 (C) establishing an adjudicative process for a citation in accordance with Title 63,
102 Chapter 46b, Administrative Procedures Act;
103 (b) concur in the issuance and renewal of licenses in accordance with Section
104 31A-23a-105 or 31A-26-203 ;
105 (c) in accordance with Section 31A-3-103 , establish, with the concurrence of the
106 department, all fees imposed by this title on a title licensee;
107 (d) in accordance with Section 31A-23a-415 determine, after consulting with the
108 commissioner, the assessment on a title insurer as defined in Section 31A-23a-415 ;
109 (e) conduct all administrative hearings not delegated by the commission to an
110 administrative law judge related to the:
111 (i) licensing or renewing the license of [any] an applicant;
112 (ii) conduct of any title licensee; or
113 (iii) approval of continuing education programs required by Section 31A-23a-202 ;
114 (f) with the concurrence of the commissioner, approve assets that can be included in a
115 reserve fund required by Section 31A-23a-204 ;
116 (g) with the concurrence of the commissioner, approve continuing education programs
117 required by Section 31A-23a-202 ;
118 (h) with the concurrence of the commissioner, impose [penalties] a penalty:
119 (i) under this title related to:
120 (A) title insurance; or

121 (B) escrow conducted by a title licensee;
122 (ii) after investigation by the department in accordance with Part 3, Procedures and
123 Enforcement; [and]
124 (iii) that [are] is enforced by the commissioner; and
125 (iv) for a violation for which a citation is not issued under Section 31A-2-406 ;
126 (i) advise the commissioner on the administration and enforcement of any [matters]
127 matter affecting the title insurance industry, including the prioritizing of enforcement efforts
128 under this title;
129 (j) advise the commissioner on [matters] a matter affecting the department's budget
130 related to title insurance; and
131 (k) perform other duties as provided in this title.
132 (3) The commission may make a rule under this title only if at the time the commission
133 files its proposed rule and rule analysis with the Division of Administrative Rules in
134 accordance with Section 63-46a-4 , the commission provides the Real Estate Commission that
135 same information.
136 (4) (a) The commissioner shall [annually] report the information described in
137 Subsection (4)(b) in writing [to]:
138 (i) quarterly to the commission; and
139 (ii) annually to the Business and Labor Interim Committee.
140 (b) The information required to be reported under this Subsection (4):
141 (i) may not identify a person; and
142 (ii) shall include:
143 (A) the number of complaints the department receives with regard to transactions
144 involving title insurance or a title licensee during [the calendar year] the time period
145 immediately proceeding the report that is applicable to the report;
146 (B) the type of complaints described in Subsection (4)(b)(ii)(A); and
147 (C) for each complaint described in Subsection (4)(b)(ii)(A):
148 (I) any action taken by the department with regard to the complaint; and
149 (II) the time-period beginning the day on which a complaint is made and ending the
150 day on which the department determines it will take no further action with regard to the
151 complaint.

152 (5) The commissioner shall establish a process for timely informing a complainant of:
153 (a) the receipt of a complaint;
154 (b) the completion of the commissioner's activities related to the complaint; and
155 (c) the result of the complaint if it is a matter of public record.
156 Section 3. Section 31A-2-406 is enacted to read:
157 31A-2-406. Letters of warning and citations.
158 (1) In performing the commissioner's enforcement duties under Section 31A-2-404 , in
159 addition to other enforcement authority granted by this title, the commission may issue:
160 (a) a letter of warning; or
161 (b) a citation.
162 (2) A title licensee against whom a citation is issued under this section may:
163 (a) pay the fine listed in a citation;
164 (b) seek to resolve the fine through negotiation or a stipulated agreement with the
165 commissioner; or
166 (c) appear at an adjudicative hearing at the time specified in the citation.
167 (3) Notwithstanding Title 63, Chapter 46b, Administrative Procedures Act, a letter of
168 warning does not constitute a notice of agency action or an administrative proceeding.
169 (4) The commissioner shall regularly update the commission on:
170 (a) trends in and results from the issuance of letters of warning and citations; and
171 (b) enforcement actions against title licensees that are resolved by stipulated
172 agreement.




Legislative Review Note
as of 2-4-08 1:56 PM

Office of Legislative Research and General Counsel