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7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to title insurance producers.
10 Highlighted Provisions:
11 This bill:
12 ▸ modifies the requirements for a title insurance producer when doing an escrow
13 involving the transfer of real property from the School and Institutional Trust Lands
14 Administration; and
15 ▸ makes technical and conforming changes.
16 Money Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 None
20 Utah Code Sections Affected:
21 AMENDS:
22 31A-23a-406, as last amended by Laws of Utah 2018, Chapter 319
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24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 31A-23a-406 is amended to read:
26 31A-23a-406. Title insurance producer's business.
27 (1) An individual title insurance producer or agency title insurance producer may do
28 escrow involving real property transactions if all of the following exist:
29 (a) the individual title insurance producer or agency title insurance producer is licensed
30 with:
31 (i) the title line of authority; and
32 (ii) the escrow subline of authority;
33 (b) the individual title insurance producer or agency title insurance producer is
34 appointed by a title insurer authorized to do business in the state;
35 (c) except as provided in Subsection (3), the individual title insurance producer or
36 agency title insurance producer issues one or more of the following as part of the transaction:
37 (i) an owner's policy of title insurance;
38 (ii) a lender's policy of title insurance; or
39 (iii) if the transaction does not involve a transfer of ownership, an endorsement to an
40 owner's or a lender's policy of title insurance;
41 (d) money deposited with the individual title insurance producer or agency title
42 insurance producer in connection with any escrow:
43 (i) is deposited:
44 (A) in a federally insured financial institution; and
45 (B) in a trust account that is separate from all other trust account money that is not
46 related to real estate transactions;
47 (ii) is the property of the one or more persons entitled to the money under the
48 provisions of the escrow; and
49 (iii) is segregated escrow by escrow in the records of the individual title insurance
50 producer or agency title insurance producer;
51 (e) earnings on money held in escrow may be paid out of the escrow account to any
52 person in accordance with the conditions of the escrow;
53 (f) the escrow does not require the individual title insurance producer or agency title
54 insurance producer to hold:
55 (i) construction money; or
56 (ii) money held for exchange under Section 1031, Internal Revenue Code; and
57 (g) the individual title insurance producer or agency title insurance producer shall
58 maintain a physical office in Utah staffed by a person with an escrow subline of authority who
59 processes the escrow.
60 (2) Notwithstanding Subsection (1), an individual title insurance producer or agency
61 title insurance producer may engage in the escrow business if:
62 (a) the escrow involves:
63 (i) a mobile home;
64 (ii) a grazing right;
65 (iii) a water right; or
66 (iv) other personal property authorized by the commissioner; and
67 (b) the individual title insurance producer or agency title insurance producer complies
68 with this section except for Subsection (1)(c).
69 (3) (a) Subsection (1)(c) does not apply if the transaction is for the transfer of real
70 property from the School and Institutional Trust Lands Administration.
71 (b) This subsection does not prohibit an individual title insurance producer or agency
72 title insurance producer from issuing a policy described in Subsection (1)(c) as part of a
73 transaction described in Subsection (3)(a).
74 [
75 (a) is not subject to any debts of the individual title insurance producer or agency title
76 insurance producer;
77 (b) may only be used to fulfill the terms of the individual escrow under which the
78 money is accepted; and
79 (c) may not be used until the conditions of the escrow are met.
80 [
81 insurance producer or agency title insurance producer in accordance with an escrow shall be
82 maintained in a manner that will:
83 (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
84 and
85 (b) otherwise comply with the general duties and responsibilities of a fiduciary or
86 bailee.
87 [
88 drawn, executed, or dated, or money otherwise disbursed unless the segregated escrow account
89 from which money is to be disbursed contains a sufficient credit balance consisting of collected
90 and cleared money at the time the check is drawn, executed, or dated, or money is otherwise
91 disbursed.
92 (b) As used in this Subsection [
93 cleared," and may be disbursed as follows:
94 (i) cash may be disbursed on the same day the cash is deposited;
95 (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited; and
96 (iii) the proceeds of one or more of the following financial instruments may be
97 disbursed on the same day the financial instruments are deposited if received from a single
98 party to the real estate transaction and if the aggregate of the financial instruments for the real
99 estate transaction is less than $10,000:
100 (A) a cashier's check, certified check, or official check that is drawn on an existing
101 account at a federally insured financial institution;
102 (B) a check drawn on the trust account of a principal broker or associate broker
103 licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the individual
104 title insurance producer or agency title insurance producer has reasonable and prudent grounds
105 to believe sufficient money will be available from the trust account on which the check is
106 drawn at the time of disbursement of proceeds from the individual title insurance producer or
107 agency title insurance producer's escrow account;
108 (C) a personal check not to exceed $500 per closing; or
109 (D) a check drawn on the escrow account of another individual title insurance producer
110 or agency title insurance producer, if the individual title insurance producer or agency title
111 insurance producer in the escrow transaction has reasonable and prudent grounds to believe
112 that sufficient money will be available for withdrawal from the account upon which the check
113 is drawn at the time of disbursement of money from the escrow account of the individual title
114 insurance producer or agency title insurance producer in the escrow transaction.
115 (c) A check or deposit not described in Subsection [
116 (i) within the time limits provided under the Expedited Funds Availability Act, 12
117 U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
118 (ii) upon notification from the financial institution to which the money has been
119 deposited that final settlement has occurred on the deposited financial instrument.
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121 maintain a record of a receipt or disbursement of escrow money.
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123 comply with:
124 (a) Section 31A-23a-409;
125 (b) Title 46, Chapter 1, Notaries Public Reform Act; and
126 (c) any rules adopted by the Title and Escrow Commission, subject to Section
127 31A-2-404, that govern escrows.
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129 conducts a search for real estate located in the state, the individual title insurance producer or
130 agency title insurance producer shall conduct a reasonable search of the public records.